The Risks of Shadow IT in an Organisation

Shadow IT in an organisation is a challenging problem and the risks of Shadow IT are very prominent .IT Security team must find the balance among policies, processes and support technologies to get visibility into the data that’s living in the shadow. We will be focusing on risks of Shadow IT, and its rising prevalence associated with an organisation.

Any subdomain or application that has been used without the knowledge or approval of IT will be termed as Shadow IT.  It may have caused because employees of the organisation are unaware about Shadow IT and its risks.

The Risks Of Shadow IT In An Organisation:

  • Risk Of Vendor Or Third Party Risk
  • Legal Risk
  • Financial Risk
  • Reputation Risk
  • Risk of Cloud Technologies

Risk Of Vendor Or Third Party Risk:

Organisation relies upon third party or vendor to perform services on their behalf. They analyze their vendors or third party with questionnaire method or auditing which is not scalable for both vendors as well as organisations. Some vendors may be prone to security flaws or breaches and can be the liability for the organisation. If any of the business units decides to place the sensitive information or documents onto the application of which vendors are hosted and they might experience a breach, the sensitive information may be accessed by unauthorized users or potentially stolen. If the information is Intellectual or trade licenses the organisation loss is unbearable.

Legal Risk:

Everyday risks of Shadow IT in an organisation is growing stronger and stronger. If Business units are required to send the document in a particular format and they end up using an unapproved applications. There is a possibility of  breach and the business units will compromise the compliance followed by the IT team. If the sensitive information is stolen from an organisation, it has the potential for imposing heavy fines.

The survey conducted by Frost & Sullivan showed that of the 36 percent of respondents who were using Dropbox unapproved, 16 percent of those have experienced a security event.

Financial Risk:

Business units purchase unapproved subdomains or applications without disclosing it to IT, which may be already in use and may not be informed to other Business units, this cause multiple purchase.This will have improper usage of funds and will have significant impact on the revenue of that organisation.

Reputation Risk:

The impact of this risk of Shadow IT could be double as that of financial risk .It degrades the brand value and the decrease in loyalty of customer will influence the amount of revenue the organisation.If customer loses the trust in an organisation they will switch to its competitors and organisation has to make significant efforts to gain them back.

 

>> READ MORE:   6 Must-Know Facts About Shadow IT

Risk Of Cloud Technologies:

This has been one of the major driving force behind Shadow IT in an organization.

Surprising Research on Shadow IT: A very surprising discovery was that more IT professionals admitted to using shadow IT than the line of business users were, with 83 percent of IT professionals and only 81 percent of line of business users admitting to using the unapproved applications.

Read More: How to turn Shadow IT Threats into Opportunities

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