Shadow IT: How to mitigate the risks and maximise the benefits

Shadow IT is a growing concern for today’s SMEs, who need to not only be able to leverage data to make business-critical decisions, but safeguard that data and make sure it complies with security protocols. When a business’s data is decentralised and vulnerable – which can be a by-product of shadow IT processes – then it’s not only being wasted; it can be actively harmful.

But is Shadow IT all bad? Or is there a way that SMEs can use shadow IT to drive innovation and empower the workforce without compromising on security? Let’s take a look at what exactly shadow IT is, and then talk about how SMEs can maximise its benefits and minimise its risks.

What is shadow IT?

Shadow IT is the use of devices and software that have not been authorised by a business’s IT department: think non-company laptops or VOIP tools. Remote working led to a sharp rise in shadow IT, as many workers grew accustomed to using personal devices, collaboration tools and productivity apps from their homes. Now, those personal routines and preferences have carried over to the office.

Examples of shadow IT include:

• P2P file-sharing tools such as Dropbox
• Slack and Trello
• Skype
• Excel macros
• Bluetooth-based tools like AirDrop
• Messaging apps such as WhatsApp, Snapchat and Facebook Messenger
• Google Drive
• Personal email services
• Personal hard drives, laptops and smartphones

Today’s businesses are grappling with how to mitigate the harmful aspects of shadow IT while still offering the freedom the workforce desires. After all, one-size-fits-all tech solutions are starting to fade into the shadows of the old world. The new SME is agile and flexible, and the new workforce wants technology that’s tailored to their personal needs.

Why do people use shadow IT?

Most workers use non-sanctioned devices or apps with the best of intentions. They are generally looking for more efficient, more effective methods of working, without having to wait for IT approval. In other words, they’re finding ways to address their own unique pain points by using bespoke solutions. This is often done to address a gap between what IT is giving employees, and what’s actually easiest and most effective.

There’s no doubt that shadow IT can be a powerful driver of productivity. After all, instead of having one unwieldy, centralised department that’s responsible for rolling out company-wide solutions, employees can use whatever works best for them at that moment. Unfortunately, using unauthorised tools can have some serious drawbacks as well.

What are the risks of shadow IT?

By circumnavigating the purview of a central IT department, workers using non-sanctioned tools and systems are creating an alternate world of data – one that might be more vulnerable to cyber-attacks. In fact, a Forbes study shows that 21% of companies have experienced a cyber event due to the usage of unsanctioned IT resources. The same study shows that 46% of surveyed executives say that shadow IT makes it impossible to protect their data and systems at all times.

But security is just one of the risks of shadow IT. By not having all their data in a centralised location, SMEs will struggle to provide their workers with trustworthy, real-time information. They may also run into problems with version control, phishing scams, regulatory compliance and the permanent loss of data. For example, what happens to mission-critical data that’s been stored on personal devices once those workers leave the company? Perhaps even more worrying, if customer data is compromised, it could permanently damage your business’s reputation.

When thinking about the potential pitfalls of shadow IT, it’s easy to see why so many organisations have banned the use of unapproved third-party apps.

Five tips for leveraging the power of shadow IT while minimising the risks

1. Teach. Leverage on-demand training platforms to turn the team into Trailblazers who understand the importance of cyber-security and data compliance. Make sure that your teams have a clear understanding of the difference between public, private and confidential data. Once data is defined and grouped, employees can be instructed as to where this data can be used. For example, perhaps it’s fine for employees to use personal apps to record private data, such as their own notes, but business data must be limited to sanctioned devices and channels.

2. Connect. Solve pain points by connecting processes and offering easy, sanctioned ways to back up and store data, access file-sharing tools, connect on social media and utilise video conferencing. When business processes are connected, the data generated from these tools and activities can be properly secured in a centralised platform, so SMEs can use it to fuel business intelligence. Ultimately, good data management and peak productivity are intertwined.

3. Communicate. Have a company-wide brainstorming session. Find out what each worker’s pain points are and how they currently address them. See if it’s possible to integrate the consumer technology products that they rely on in a more secure way, or if you can create low-code or no-code apps that can offer similar benefits.

4. Transform. If you’re still using on-site legacy systems that aren’t connected to the cloud, then consider whether your business might benefit from digital transformation. Digital transformation can help companies reduce IT complexity, enable better and more secure collaboration, unlock new business models, optimise their data governance and future-proof their business.

5. Excavate. Dig through existing shadow IT and centralise any mission-critical information you find so that it can be properly secured and leveraged. Eliminate anything that could potentially compromise the security of the business or put the company at competitive risk. Make sure any response is proportional: remember, team members are using these tools because they help them do their job better, not because they’re trying to compromise the organisation’s security.

Are you ready to move your SME out of the shadows?

Shadow IT poses some security risks, but it also shines a spotlight on tools and processes that may not be efficient, at least for some segments of the workforce. The prime benefits of shadow IT include agility, employee satisfaction and productivity. It’s important that your business is able to unlock these benefits for its employees – even if you try to lock down on shadow IT.

Getting rid of all shadow IT is nearly impossible, and if it were possible, it might be stifling and counter-productive for many workers. The key to optimising shadow IT is to mitigate the risk and manage it appropriately so that it delivers business value rather than destroys it.

To see more about how you can improve processes and tools to empower the workforce and drive business intelligence, download our free eBook, The Connected Small Business: Your Guide to Faster, Smarter Business Processes.