What is shadow IT? And how IT asset management can help curb it

Ever since the global COVID-19 pandemic, more and more organisations have been implementing the use of remote or hybrid work approaches. Following this, companies across the world have unknowingly relaxed or loosened their security. 'How’s that?' you might ask. Well, have any of your coworkers, fellow employees, or even yourself, ever taken a work device back home? The answer is likely a yes. Accessing organisational data from unauthorised devices, logging into personal email, banking, or social media accounts on a company device, or even installing unauthorised leisure apps such as Netflix or Spotify onto the same company assets, are all considered to be forms of shadow IT.

The term shadow IT might sound a bit ominous, but it is rightfully named so. Shadow IT refers to the use of software, hardware, or any other organisational IT assets on an organisation’s internal network without the knowledge or approval of the IT department.

End users, or employees, often unknowingly partake in shadow IT because they are trying to find shortcuts or save time during their work. They find that software available online, though unauthorised, might be best suited for quick access and sharing of files. Applications such as WhatsApp, Dropbox, and Google Drive are some examples.

The use of personal email addresses and accounts in company devices, the use of personal devices to share or access work files, is how shadow IT most commonly takes place in an organisation.

When employees from your company take your company devices home, are you aware of what they use them for? Is there a system in place to track and ensure that your organisation’s IT assets are only used for what they are meant for? The realistic answer, for most companies, is that they are unprepared.

Around 80 percent of end users use shadow IT, 83 percent of IT staff confess to using unauthorised software, and only 8 percent of all enterprises actually know the scope of shadow IT within their business – Research Statistics, Cisco

Consequences of shadow IT

The use of shadow IT leaves an organisation susceptible to various risks. Cyberattacks, the loss or leaks of sensitive data, and the loss, theft, or damage to IT assets themselves are all potential consequences of shadow IT. Here is a short discussion on the consequences of shadow IT:

• Mismanaged data and cybersecurity risks: The use of unapproved software or personal devices to handle company data puts it at risk. The reason for this greater risk is that these unauthorised methods and applications have not been tested or cleared by the IT department in terms of their security and safety. Handling the same data on already approved software and safely deemed methods would be ideal for the best protection of the data.
  
  This also means that the organisational data handled through these methods is more prone to potential cyberattacks or threats.
  
  
• Compliance breach: This risk of losing or leaking data, along with many other drawbacks of the use of shadow IT, can very easily mean a breach of compliance law. Which results in the company having to face harsh repercussions.
  

• High costs: Removal or renewal of organisational assets that have been affected by shadow IT use is a task that requires additional resources to be allocated. This, coupled with the fact that any breach in compliance regulations will lead to the company owing hefty fines, leads to a sharp increase in company expenditure.

“Gartner studies have found that shadow IT is 30 to 40 percent of IT spending in large enterprises, and our research at Everest Group finds it comprises 50 percent or more” - CIO Article on Shadow IT

How IT asset management software can help curb or reduce the risk of shadow IT

Although the use of shadow IT can seem like a frightening thing to manage, with the right tools in place a company can find the right ways to identify and address the problems. Here are a few ways in which IT asset management software can help:

• Real-time visibility and valuable insights: The most valuable thing your company can gain from using IT asset management tools, at least in terms of managing shadow IT, is real-time visibility, control, and access to invaluable analytics and insights.
  
  Importantly, IT asset management tools can also verify if the devices of an organisation have the right security software installed, or if the necessary firewalls are in place.
  
  When such tools are put into place, they give you an idea of where all your IT assets are, along with how and by whom they are being used. Multiple metrics are constantly being tracked, and with such data, insightful reports can be generated from IT asset management software.
  
  With these insights, a company can work towards tracking down and managing the use of unauthorised applications and personal devices to log into organisational software and even hold higher standards in terms of holding end users accountable.
  

• Compliance with regulations: IT asset management software can help ensure that your organisation’s IT assets stay up to date on their licenses, stay updated and remain within their security and safety standards. Overall, such tools help keep your IT assets compliant with current standards. When most of the IT assets are tracked and compliant, it reduces the chance for shadow IT to emerge within your organisation.
  
  At the same time, all employees need to stay updated on their required level of security training. This will make sure that the end users themselves are well aware of shadow IT and its consequences, further reducing the likelihood of the use of such practices.
  

In conclusion, shadow IT is a widespread problem that organisations need to be well-equipped to manage and deal with. IT asset management software is one such way in which a company can track, identify, and work towards curbing the use of shadow IT within its scope of operations.