Photo: iStock

By Dave Warner, Systems Engineer at Cenetric

If shadow IT sounds a little ominous, that’s because it is. Shadow IT is the outside-the-lines software, hardware and apps your employees use without your IT staff knowing about it, approving it, or making sure it’s safe for them to use.

And if you don’t have an IT staff, shadow IT could be an even bigger problem because there aren’t even any rules to break, so employees just do what they need or want to do — potentially at the peril of your business.

There are a number of reasons your employees might make tech choices about software and hardware on their own:

• They feel constrained by IT rules and that they don’t have the tools they need to work the way they want.
• They prefer or are more familiar with a different tool than the one your company is providing.
• They feel the process of getting hardware or software through IT (or management if there’s no IT staff) doesn’t move fast enough.

The COVID pandemic drove significant growth in shadow IT as companies scrambled to make working from home happen, and the “consumerization” of tech gives employees more confidence in adopting tools on their own. Together, they’ve created an IT mess: Gartner predicts 75% of employees could be seeking out or even creating their own tech without IT knowing by 2027.

Photo: iStock

The dangers of shadow IT

Nobody wants to slow down progress or hold employees back from doing their best work, of course. While productivity and efficiency are the advantages of letting employees implement solutions on their own, there are some big drawbacks of shadow IT.

Budget

When employees sign up for SaaS solutions or purchase hardware on their own, your budget can get out of whack fast. You could be spending thousands more on tech than you realize because it’s scattered among departments and hiding in mysterious line items.

You could even be overspending by duplicating subscriptions or missing out on the discounts you’d get for purchasing multiple licenses as a group. You (or your IT team) should be tracking tech purchases and use closely to keep spending under control.

Security

Data security is perhaps the biggest challenge of shadow IT. When you or your IT staff aren’t aware of where company data is being stored or how it’s being handled, your company could be exposed to major risks.

IBM’s 2024 Cost of Data Breach study revealed that 35% of data breaches involved shadow data (data that’s stored in unmanaged places). The study also found that shadow data increased the cost of a data breach by 16% and that 40% of breaches were caused when data was stored across more than one environment. (Not to mention, working across environments can lead to out-of-date or conflicting data and outputs.)

Enforcing how your employees work with data is equally important. With AI tools so readily available, it might be tempting for employees to use them in ways that accidentally expose intellectual property or confidential data to others. Establishing a strong AI policy is a must as part of your IT best practices.

Depending on your industry, there might be dozens of laws and regulations that govern how you handle data. When you aren’t strict with how your employees store and use data, you could expose your company to regulatory fines, lawsuits and data breaches that cost you far more than taking the time to create rules and structure for handling data safely.

Loss of control

Similar to lax security, shadow IT means you don’t have control over your tech and data if you lose an employee.

Even if an employee leaves under the best of circumstances, they might forget about key data they’ve stored in an online tool or the important passwords they’ve saved in their browser. If a team member is laid off or leaves on their own under unpleasant circumstances (or even passes away), not knowing how to recover vital data could affect key functions of your business.

When to get help from pros to prevent shadow IT mishaps

Remember, in medium-sized companies that have an IT staff member or team, employees often implement tech on their own just to avoid hassles. And in smaller companies, they often do it because there isn’t any policy or guidance telling them not to.

While we’re all for being scrappy and agile, we also know the importance of strong IT governance. It’s not just for major enterprises — every company needs it.

From setting up business continuity, disaster response and cyber incident response plans to creating a Bring-Your-Own-Device policy, there’s a lot to consider and manage. But a managed services provider is just what you need to help guide you.

Let Cenetric help you set up your IT infrastructure for success

Working with experts who’ve done and seen it all can help you strike the right balance between productivity and protection. The Cenetric team works with companies large and small in Kansas City and beyond to set the right policies and build a strong, safe infrastructure.

Whether you have a small IT group or none at all, Cenetric has experts who know how to tackle any issue. Tell us about your challenges and we’ll get to work.