Shadow IT isn’t always malicious—but it is always risky.
It’s the term for any hardware, software, or cloud services solution used by employees without approval from their company’s IT or security team. Think of a marketing team using an unapproved design app or a manager storing sensitive documents on a personal Dropbox. It’s convenient for the user—but potentially dangerous for the business.
In today’s workplace, where remote tools are widely accessible, shadow IT is more common than most organizations realize.
What Is Shadow IT, Really?
At its core, shadow IT represents any technology or service that operates outside the control of your company’s formal systems. It includes tools employees download, browser extensions, unsanctioned mobile apps, and cloud platforms like Google Drive or Trello when not provisioned through official channels.
The reason behind it is simple: employees want to work faster. They adopt tools that make their jobs easier—often unaware they’re sidestepping company policy or exposing the organization to risk.
Why Shadow IT is Problematic
A recent Forbes article raises awareness that shadow IT creates blind spots for security teams. If IT doesn’t know a tool exists, they can’t secure it. When sensitive data is uploaded, shared, or stored in unmanaged apps, your business becomes vulnerable in ways you can’t see or control.
A Zylo article concludes that up to 30–40% of a company’s software spend may be tied to unsanctioned applications. Beyond the security risk, that’s a financial concern—paying for overlapping tools, duplicate subscriptions, or unused licenses that drain your IT budget.
Meanwhile, TechTarget outlines eight specific risks that come with shadow IT, including:
- Data leaks: Unsecured storage services can expose confidential files.
- Compliance violations: Tools that don’t meet industry standards can put you out of regulatory alignment.
- Loss of control: You can’t apply security patches, revoke access, or monitor usage for tools you don’t even know exist.
- Incident response delays: If a breach occurs through shadow IT, the process of detecting and responding can take longer because no one’s watching those systems.
How to Manage Shadow IT Risks
Although it’s tempting to try and lock down everything, a more practical approach is to bring shadow IT into the light and manage it with awareness, policy, and support.
1. Monitor Tool Usage
You can’t secure what you don’t know exists. Conduct regular audits using SaaS management tools or network monitoring solutions to uncover unauthorized apps. Zylo recommends SaaS management platforms that track spending, app usage, and overlap—giving you a clearer view of what’s in use across the company.
2. Understand Why It’s Happening
When employees use unapproved tools, it’s often a sign that official systems aren’t meeting their needs. Shadow IT isn’t just a technical issue; it’s also a user experience issue. Consult with teams to learn why they’ve adopted specific tools and look for ways to offer secure, sanctioned alternatives that support their workflows.
3. Establish Clear Policies—And Communicate Them
Forbes emphasizes the importance of setting clear expectations. Outline which types of tools are approved, steps in the review process, and how employees can request new software. Make it easy for employees to follow the rules, not just penalize them for breaking them.
4. Offer Centralized Procurement and Training
By centralizing the process for acquiring tools gives IT control while still supporting innovation. Provide training so employees understand why compliance and security matter, not just what the rules are.
5. Build a Culture of Shared Responsibility
Managing shadow IT is a team effort. Leadership needs to model secure behaviour, and employees should be empowered to partner with IT rather than work around it.
Shadow IT is rarely about recklessness—it’s about people trying to get their jobs done. But ignoring it puts your organization at serious risk. The key isn’t to eliminate it entirely (which may be unrealistic) but to identify, understand, and manage it with intention.
With the right mix of visibility, policies, and collaboration, small businesses can strike a balance: enabling productivity without sacrificing security.
References
Subhani, A. (2022, December 26). Council Post: The risks of Shadow IT for businesses. Forbes. https://www.forbes.com/councils/forbestechcouncil/2022/12/26/the-risks-of-shadow-it-for-businesses/
Zylo. (2025, January 30). Shadow IT Dangers & Impact on cost and risk for your organization. https://zylo.com/blog/shadow-it-danger/
Kirvan, P. (2024, February 6). 8 dangers of shadow IT and how to manage them. Search CIO. https://www.techtarget.com/searchcio/tip/6-dangers-of-shadow-IT-and-how-to-avoid-them
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