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Shadow IT Discovery: Risks, Benefits & Costs

Reco Security Experts
December 6, 2023
July 9, 2024
5 mins

Organizations are increasingly dependent on applications and software, ranging from shadow apps to SaaS applications, to ensure their operations run smoothly. However, to achieve productivity and convenience, employees can sometimes resort to using unauthorized and potentially risky apps. This contributes to the emergence of so-called "shadow IT."

This article explores the world of shadow IT, and identifies the underlying reasons for its prevalence. It discusses the advantages and drawbacks associated with it, various security concerns as well as effective methods for shadow IT discovery and management. By proactively addressing shadow IT, your organization can strengthen security, remain compliant, and cultivate a more productive and efficient workplace.

What is Shadow IT and Why Does it Occur?

Shadow IT, also known as "stealth IT" or "rogue IT," refers to the use of unauthorized hardware, software, applications, and data within an organization. Shadow identities, data, and apps are typically adopted without the knowledge or approval of the IT department. This makes them risky for security and compliance.

Shadow IT operates in the shadows, hence the name, and covers a wide range of technologies. These technologies range from cloud-based applications to personal laptops and mobile devices that are used for work-related tasks. Several factors contribute to its prevalence within organizations:

Technology Advancements

The rapid pace of technological advancements often outpaces the IT department's ability to keep up. Employees may resort to unauthorized tools to bridge this technology gap.

User Autonomy

End-users often have specific preferences for software and tools they believe will enhance their productivity. When they perceive that the IT department's offerings are inadequate, they may turn to shadow IT to meet their needs.

Agile Work Environments

The rise of remote work and flexible working arrangements means that employees need access to a variety of tools to perform their tasks efficiently. Shadow IT can help them adapt to these dynamic work environments.

Lack of Awareness

Sometimes, employees may not even realize they are engaging in such risky activities as the boundaries between personal and professional technology blur.

Why Do Employees Use Shadow IT?

The use of shadow IT can offer several benefits to employees, which drive its adoption:

  • Productivity Gains: Employees often believe that shadow IT applications and tools can help them complete tasks more efficiently, leading to higher productivity.
  • User-Friendly Interfaces: Unauthorized applications are sometimes chosen because they offer a more intuitive and user-friendly interface compared to the organization's approved tools.
  • Task Specificity: Shadow IT solutions are often selected because they are tailored to specific tasks, making them more efficient and effective.
  • Flexibility: Employees appreciate the freedom to choose their tools, giving them a sense of control over their work environment.

Shadow IT Benefits

While shadow IT may pose challenges to an organization's IT management, it's important to acknowledge that it can offer some benefits as well:

Benefit Description
Innovation Shadow IT can foster innovation by encouraging employees to explore and implement new technologies and using productivity apps can lead to increased efficiency.
Agility In dynamic work environments, shadow IT can help organizations quickly adapt to changing needs, as employees have the flexibility to experiment with tools that suit their requirements.
Employee Empowerment Allowing employees to choose their tools can empower them and make them feel more invested in their work.

This table summarizes the positive aspects of shadow IT, emphasizing how it can contribute to innovation, agility, and employee empowerment within an organization.

Shadow IT Costs

Despite the perceived benefits, shadow IT comes with its costs and challenges. The use of unauthorized tools can expose sensitive company data and lead to security vulnerabilities. It can also lead to noncompliance with industry regulations and organizational policies, resulting in potential fines and legal consequences.

On the other hand, managing multiple unauthorized tools can lead to integration and compatibility issues, resulting in wasted time and resources. Additionally, when something goes wrong with a shadow IT tool, users often don't find proper support or resources to address the issue.

Security Risks of Shadow IT

Security risks associated with shadow IT are a major concern for organizations. Here are some of the key security threats to be aware of:

  • Data Leaks or Sensitive Data Exposure: Unauthorized applications may not have the necessary security controls in place, potentially leading to data breaches or leaks. Sensitive company information may be exposed to unauthorized parties, leading to reputational damage and legal consequences.
  • Configuration Management: The lack of control over shadow IT tools makes it difficult to ensure consistent configuration management. This can lead to vulnerabilities that are easily exploited by malicious actors.
  • Malware: Shadow IT applications may contain malware, and the organizations may not have the proper defenses in place to detect and mitigate these threats.
  • Vulnerabilities: Unpatched or outdated shadow IT tools can create security vulnerabilities that can be exploited by attackers.

How to Discover and Manage Unauthorized IT Usage?

Effectively discovering and managing shadow IT is essential for ensuring the security and compliance of your organization's digital environment. By adopting a comprehensive approach, you and your IT team can mitigate the risks associated with unauthorized technology.

Identify Stakeholders

Shadow IT discovery begins with identifying the key stakeholders within your organization. These stakeholders may include IT staff, management, and end-users. Effective communication and collaboration among these groups are crucial for understanding the motivations behind shadow IT usage and formulating effective strategies to address it.

Deploy Specialized Tools

Implement specialized shadow IT discovery tools and data protection solutions. These tools are designed to identify and monitor the use of unauthorized applications, services, and devices within your organization. They provide comprehensive visibility into your technology landscape, allowing you to track and analyze user behavior and software usage in real time.

Educate Employees

Raising awareness among your employees about the risks associated with shadow IT is a fundamental step. Many employees may not fully grasp the potential security risks and compliance implications of using unauthorized tools. Providing comprehensive education and guidelines for using approved tools and services is essential to foster a culture of responsible technology usage. Workshops, training sessions, and clear documentation can help in achieving this goal.

Conduct Regular Audits

Regularly auditing your organization's technology landscape is a systematic process of reviewing and assessing the software, applications, and devices in use across the organization. Audits should be conducted at regular intervals to identify any unauthorized technology usage, track changes over time, and ensure that the discovered data aligns with your organization's IT policies and procedures.

Evaluate and Approve

Encouraging employees to propose and evaluate new tools and applications through an established process is a strategic approach. By involving them in the evaluation and approval of tools, you can empower them to bring potential shadow IT solutions into the light for proper assessment. This approach ensures that employees feel heard and can influence technology decisions while maintaining your security measures and compliance standards. It's also vital to have clear criteria and procedures for evaluating and approving tools.

Implement Strong Policies

Establishing clear and robust IT usage policies and guidelines is essential. These policies should outline the acceptable use of technology within your organization, addressing the use of both authorized and unauthorized tools. Additionally, the policies should specify consequences for violations and measures to be taken in the event of shadow IT discovery. By consistently enforcing these policies, you can create a framework that discourages shadow IT and promotes responsible technology usage. Regular policy reviews and updates are crucial to adapting to changing technology landscapes.

Benefits of Shadow IT Discovery

Discovering and managing shadow IT within your organization can have numerous benefits, which include:

  • Enhanced Security: By identifying and addressing unauthorized tools and services, you can significantly reduce security risks and data breaches.
  • Compliance: Shadow IT discovery helps ensure that your organization complies with industry regulations and internal policies.
  • Cost Savings: By eliminating redundant tools and ensuring the proper use of licensed software, organizations can save money.
  • Improved Productivity: Focusing on authorized and efficient tools can enhance employee productivity and reduce downtime caused by security incidents.
  • Better Integration: Authorized tools can be integrated more effectively with existing systems and workflows.

Shadow IT Discovery Tools

Discovering and managing shadow IT requires specialized tools and solutions designed to identify unauthorized applications and services. Some popular tools include:

Tool Offering
SaaS Security Posture Management (SSPM) SaaS Security Posture Management (SSPM) is an automated SaaS security solution designed to oversee and mitigate security threats within software-as-a-service (SaaS) applications.
Cloud Access Security Brokers (CASBs) These tools offer visibility and control over data in cloud applications and cloud services.
Endpoint Detection and Response (EDR) EDR solutions can detect and mitigate threats on individual endpoints, including unauthorized software.
Network Traffic Analysis (NTA) NTA solutions can monitor network traffic to identify unusual or unauthorized activities.
User and Entity Behavior Analytics (UEBA) UEBA tools analyze user behavior to detect anomalies that may indicate shadow IT usage.
Mobile Device Management (MDM) MDM solutions can help manage and secure mobile devices, reducing the risk of shadow IT.


Shadow IT is a continuous challenge organizations face in today's technology-driven world. While it may offer certain benefits, the security risks and compliance issues cannot be ignored. Embracing shadow IT discovery is a critical step for organizations to secure their digital assets, maintain compliance, and foster a productive work environment.

By implementing a structured shadow IT discovery process, identifying key stakeholders, deploying specialized tools, and educating employees, organizations can effectively manage and mitigate the risks associated with shadow IT. The benefits of such an approach extend beyond security and compliance, leading to cost savings, improved productivity, and better integration of technology solutions.

In the end, embracing shadow IT discovery isn't about stifling innovation or employee autonomy. It's about striking a balance between empowering employees to choose the tools that enhance their productivity and ensuring that those tools align with the organization's security and compliance requirements. In doing so, organizations can navigate the complex landscape of modern technology while protecting their data and assets.

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