Decoding Shadow IT: Strategies to Reduce Risks and Optimize IT Costs for Business

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Shadow IT: An Invisible Threat for Large Corporations

In a business scenario where every detail matters, there is a little-known story that involves hidden expenses and inadvertent risks. In an increasingly digitalized world, business process’ agility and efficiency has become the key to success. However, a growing phenomenon in large corporations, called Shadow IT, has been an eye opener due to the risks, challenges and high costs it imposes. According to Gartner, Shadow IT represents 30 to 40% of total IT expenses in large companies, a percentage that increased up to 59% due to Covid. Herein, we will explore more of what Shadow IT is, what it implicates and what are the solutions to this threat.

The Invisible Reality of Shadow IT

Shadow IT refers to the use of systems, devices, software, applications and services by a corporate staff without the formal approval from the IT’s department. It includes messaging apps such as WhatsApp and file-sharing apps like Dropbox, or any other resources used without the IT department’s supervision. Even though the users from these apps are just looking for efficiency, it can become a threat and implicate high risks to corporations.

The Invisible Risks of Shadow IT

· Data Security: When employees use unauthorized applications, company data can be exposed to security breaches.

· Non-compliant: The use of unapproved software may violate compliance standards and legal regulations, resulting in fines and penalties.

· Strategic Misalignment: Shadow IT can create information silos, harming the company’s global strategy.

· Waste of Resources: Without visibility, IT expenses can become larger, redundant and inefficient.

The Pandemic and the Rise of Shadow IT

The pandemic sped up the digital transformation and remote jobs, increasing employees’ dependence on digital solutions and growing Shadow IT. Due to the remote staff working in a dispersed manner, IT departments’ control and visibility over the tools used decreased, expanding the implicated risks.

Managing Shadow IT Risk

Business must adopt the following strategies to solve Shadow IT:

  • Education and Awareness: Promote awareness of the risks associated with the use of unauthorized software.
  • IT Policies: Create and disclose IT policies for the use of software and hardware.
  • Monitoring and Auditing Tools: Use tools to monitor and audit the use of software and hardware on their business network.

Your Next Strategic Move

Shadow IT is a hidden risk, but with visible implications. Adopting internal security measurements not only helps in the process of solving the Shadow IT, but also optimizes processes and guarantees information security. It’s a strategic move for visionary companies.

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