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Shadow IT refers to websites, services, and applications used by employees without the oversight of the IT department. For the most part, Shadow IT is used by employees legitimately. They need tools to get the job done. Usually, they use these services in an ad-hoc manner and the use of these SaaS cloud apps is short-lived.
The problem is that this approach can result in serious IT security risks (and compliance issues even), called the Shadow IT risks. Since these accounts are created by the employees themselves, using corporate email addresses (and often reusing corporate passwords), they are usually the only ones to know about their existence. Moreover, there are no additional security checks performed on these accounts, such as password hygiene checks, password reuse detection, and password breach verifications. If an employee leaves the company, they usually still have access to these third-party online accounts. On average, companies use hundreds of SaaS apps. Each employee has many individual SaaS accounts. This results in thousands of self-serviced, unmanaged accounts. This is the result of Shadow IT in a typical organization.
According to G2.com 80% of employees admitting the use of cloud applications for business purposes such as productivity, messaging and storage, without the consent or knowledge of IT and Security departments. These Shadow IT functions pose great challenges for preventing data loss, that may also lead to compliance breaches and consequent legal fines from GDPR and other industrial or legal regulation. With individual cloud consumption, redundant applications and undefined business processes arise. Direct expenses and IT support overhead are a direct fallout, potentially reaching up to 40% of regular IT spending, according to Gartner.Shadow IT does have positive effects though, allowing for flexibility and exploration for better services and effectiveness by employees. For this reason, Shadow IT will not go away and should be embraced by using proper controls, communications, and awareness across the organizations.
In big organizations, shadow IT (also known as embedded IT, fake IT, stealth IT, rogue IT, feral IT, or client IT) refers to information technology (IT) systems deployed by departments other than the central IT department, to work around the shortcomings of the central information systems. Shadow IT systems are an important source of innovation, and shadow systems may become prototypes for future central IT solutions. On the other hand, shadow IT solutions increase risks with organizational requirements for control, documentation, security, reliability, etc.
Scirge gives organizations the tools to discover and manage Shadow IT by tracking where and how corporate credentials are used across SaaS, supply-chain, GenAI, and other web applications. It helps discover Shadow SaaS and Shadow AI, and identify risks like password reuse, shared accounts, and phishing, while providing real-time awareness messages, automated workflows, and actionable insights.
