Shadow IT is growing at an alarming rate. Employees use unapproved apps and devices to get work done faster. While it might improve productivity in many cases, it also creates serious risks. 

A report found that 41% of employees use unauthorized apps at work. And the number is expected to go over 75% by 2027 [1]. The financial impact is massive. Businesses lose millions to security breaches, compliance fines, and inefficiencies caused by shadow IT. 

But the risks go beyond just money. Data leaks, cyber threats, and operational disruptions are real concerns. If left unchecked, shadow IT can quickly spiral out of control. 

Businesses always wonder why employees take this route. It’s because of convenience, slow IT approvals, and lack of awareness about security. 

The good news is it can be managed. 

In this blog, we’ll explore why shadow IT happens and how businesses can prevent it. 

What is Shadow IT? 

Shadow IT refers to the use of unauthorized apps, software, or devices by employees without the approval of the IT department. 

For example, a remote hire might struggle with accessing large files through the company’s official storage system. To speed up work, they may upload sensitive data to a personal cloud storage service. While it’s a quick fix, it bypasses security protocols and increases the risk of data leaks. 

Shadow IT often happens when employees prioritize convenience over compliance. They don’t know that unintentionally the business is being exposed to cybersecurity threats and compliance issues. 

The Hidden Costs of Unauthorized Technology Adoption 

Contrary to what many believe, Shadow IT is not just about unapproved apps and software. Physical IT assets like personal laptops, USB drives, and external hard drives are often part of the problem. 

Here’s what the businesses often miss when discussing Shadow IT: 

1. Security Risks

Unauthorized devices are often unprotected. They lack the latest security updates, antivirus software, or encryption. A single compromised laptop or USB can lead to a massive data breach. Cybercriminals love unsecured entry points and shadow IT creates plenty of them. 

2. Compliance Violations 

Businesses must follow strict regulations around data protection. Personal devices and unapproved cloud storage often fall outside those boundaries. When sensitive data is stored on unauthorized devices, companies risk hefty fines and legal action. 

3. Operational Inefficiencies 

Shadow IT fragments workflows. Employees using multiple, disconnected tools create data silos. Collaboration suffers. IT teams spend hours troubleshooting issues on systems they don’t manage. This leads to a drop in productivity and waste of resources. 

4. Financial Impact

The financial toll goes beyond compliance fines. Recovering from a data breach is expensive. Legal fees, remediation costs, and reputational damage can drain budgets. Untracked shadow IT also leads to unnecessary software purchases, resulting in duplicate expenses. 

5. Loss of Control 

When IT doesn’t know what devices and apps employees are using, they lose visibility. That makes it nearly impossible to monitor threats or respond to incidents effectively. Businesses can’t protect what they can’t see. 

Shadow IT might seem harmless, but its hidden costs can cripple organizations. Understanding the risks is the first step toward preventing them. In the next section, we’ll explore why employees bypass IT in the first place. 

Top Reasons Why Employees Turn to Shadow IT 

Employees don’t always resort to shadow IT out of malice. More often, it’s a response to inefficient processes or unmet needs. 

Understanding the “why” behind shadow IT is key to solving the problem. Here’s why employees often bypass IT:

1. Slow IT Approvals 

When employees need a new tool or device, waiting for IT approval can feel like a roadblock. Traditional IT procurement processes are often slow and bogged down with red tape. Faced with looming deadlines, employees take matters into their own hands. They download apps, purchase software, or use personal devices to stay productive. 

2. Lack of Suitable Tools 

Employees may feel the existing tools don’t meet their needs. A marketing team might struggle with outdated design software. A developer may lack access to the latest coding tools. Instead of working with what’s available, they turn to external solutions. If IT doesn’t keep pace with industry trends, employees will find their own. 

3. Preference for Familiar Solutions 

Not everyone is tech-savvy. Employees often prefer tools they’re comfortable using — even if they aren’t IT-approved. A designer might prefer Canva over enterprise design software. A project manager might use Trello instead of the company’s official task management tool. Familiarity leads to faster results, and shadow IT becomes a convenient shortcut. 

4. Remote and Hybrid Work Challenges 

Remote employees face unique IT challenges. Company networks may be hard to access, VPNs might lag, and IT support isn’t always readily available. In these cases, employees may resort to personal devices, free cloud storage, or unauthorized messaging apps to collaborate. Without proper remote work solutions, shadow IT becomes inevitable. 

5. Lack of Awareness 

Sometimes, employees simply don’t know they’re engaging in shadow IT. They might assume a free app or a personal laptop is harmless. Without clear policies or regular training, employees won’t recognize the risks. Shadow IT thrives in environments where security education is lacking. 

By addressing the root causes, companies can reduce shadow IT without alienating employees. 

Examples of Shadow IT 

Shadow IT can take many forms, from unauthorized software to unapproved devices. Here are a few real-world scenarios that show how it often happens: 

1. The Marketing Manager’s Design Tool 

A marketing manager needs to create visuals for a last-minute campaign. The approved design software is complex and time-consuming. Instead of waiting for IT to approve an alternative, they download a free online design tool. While it helps them meet deadlines, the tool lacks proper encryption and exposes sensitive brand data to external threats. 

2. The Remote Developer’s Personal Laptop 

A remote developer faces delays in receiving their company-issued laptop. Maybe the processor is not up to date, or there’s a malfunction of sorts. To stay on track with project deadlines, they use their personal laptop to access internal systems. Unlike a managed device, their personal laptop lacks endpoint protection and security updates. This creates a vulnerable entry point for malware and cyberattacks. 

3. The Sales Rep’s External Hard Drive 

A sales representative frequently travels for meetings and struggles with internet connectivity. To ensure access to sales reports and customer data, they transfer files onto a personal external hard drive. If the drive is lost or stolen, confidential client information is at risk. This not only violates data protection policies but could also lead to legal consequences.

These scenarios are common across industries. While employees often act with good intentions, shadow IT introduces serious security and compliance risks. 

In the next section, we’ll explore effective strategies to mitigate these risks while supporting employee productivity. 

How Can You Prevent Shadow IT at Your Business? 

Shadow IT doesn’t have to be a constant battle. With the right strategies, you can reduce unauthorized technology use while empowering employees to work efficiently. Here are seven actionable ways to address shadow IT challenges: 

1. Conduct a Thorough Shadow IT Audit 

Start by identifying what’s currently in use. Many employees may not even realize they’re using unauthorized tools. Use network monitoring and endpoint detection tools to scan for unapproved applications, devices, and cloud services. Analyze firewall logs, DNS requests, and cloud access patterns. 

Once you’ve gathered data, categorize the findings. Are there specific departments or roles where shadow IT is more common? Understanding usage patterns helps you create targeted solutions. The key is always transparency. If need be, involve department heads in the process to foster collaboration instead of blame. 

2. Implement a Simplified Application Request Process 

A slow or complicated approval process drives employees to shadow IT. Implement a procurement platform that makes it easy for employees to request new applications. Offer clear timelines and transparent communication so employees know when they can expect a decision. 

Create a “fast-track” option for non-sensitive tools with minimal security risks. Establish clear criteria for automatic approvals. This way, employees won’t feel the need to bypass IT for simple requests. Additionally, use feedback loops to adjust the process based on employee experiences. 

3. Create a Sanctioned Alternatives Catalog 

Employees often resort to shadow IT because they’re unaware of approved alternatives. Build a catalog of sanctioned tools and map them to popular shadow IT applications. 

For example, if teams frequently use external project management apps, recommend the company-approved equivalent with similar features. 

Include detailed comparisons, benefits, and guidance on how to request access. Make this catalog easily accessible through the company intranet. Regularly update it based on employee feedback to ensure it remains useful and relevant. 

4. Establish Regular Technology Needs Assessments 

Proactively identifying employee needs reduces the reliance on shadow IT. Schedule quarterly or biannual technology needs assessments with department leaders. Ask about pain points and evaluate whether the current tools meet their requirements. 

This collaborative approach allows IT to stay ahead of emerging needs rather than reacting to unauthorized tool usage. Additionally, consider creating an internal feedback channel where employees can suggest tools or report technical frustrations. 

When employees see that IT is responsive and adaptive, they’re more likely to engage with the official approval process. 

5. Design a Graduated Security Approach 

Not all applications pose the same level of risk. Instead of applying a one-size-fits-all security policy, adopt a graduated security approach. Classify applications based on the sensitivity of the data they handle. 

• Low-Risk Apps: Expedite approvals for tools that don’t process sensitive data, like brainstorming or productivity apps. 
• Moderate-Risk Apps: Implement basic security checks and review for compliance. 
• High-Risk Apps: Require a thorough security assessment before approval, especially for apps managing financial, healthcare, or customer data. 

This balanced approach maintains security without creating unnecessary barriers for employees. 

6. Implement a Responsive IT Helpdesk 

One major reason employees turn to shadow IT is frustration with technical issues. A slow, inefficient IT helpdesk often forces employees to find their own solutions. Invest in a responsive IT support system with clear SLAs (Service Level Agreements). 

Offer multiple support channels like live chat, self-service portals, and phone support to meet employee preferences. Additionally, provide a knowledge base with step-by-step guides for common issues. The faster IT resolves issues, the less likely employees will seek out unauthorized workarounds. 

7. Use Automated Discovery and Integration Tools 

Even with proactive measures, some employees may still introduce shadow IT. Automated discovery tools can monitor your network for unauthorized applications and devices. These tools provide real-time visibility into new software usage.

Rather than simply blocking unapproved tools, consider integrating automated workflows. If a low-risk app is detected, the system can generate an approval request for IT review. For high-risk apps, automated alerts can trigger immediate investigation. 

With quick detection and streamlined integration, businesses can maintain security without compromising on much-needed additions. 

Say No to Shadow IT with ZenAdmin! 

Shadow IT may seem like a constant challenge, but with the right approach, it can be managed. By conducting audits, simplifying application requests, offering approved alternatives, and maintaining responsive IT support, companies can reduce unauthorized technology use. 

That’s where Zenadmin comes in. Our platform offers automated IT asset discovery tools, seamless application management, and real-time visibility into your IT ecosystem. 

From streamlining approvals to enhancing security, Zenadmin empowers IT teams to stay in control without stifling productivity. 

With our IT helpdesk, your team can get quick access to software, resolve IT issues, and track status of approval right via your communication channels. 

Take control of shadow IT. Book a demo today!

References 

[1] https://www.gartner.com/en/cybersecurity/role/chief-information-security-officer