Shadow IT: Friend or Foe

By Jon Evans  It promotes innovation, efficiency and productivity but poses serious data security, compliance, finance and brand risks. So is Shadow IT, a help or a hindrance to business operations? Our view: Shadow IT is both friend and foe to businesses looking to undertake digital transformation and can be harnessed to achieve best practice outcomes.

What is Shadow IT?

Shadow IT occurs where company employees use IT devices, software and services that are not sanctioned or controlled by IT departments. Often driven by the need to worker smarter, staff and in some cases company departments will install cloud based applications without IT involvement.

The surge in SAAS applications and employees using personal devices such as smart phones and tablets for work have resulted in the unprecedented growth of Shadow IT. Cisco estimates that on average there are 730 unauthorised cloud services running within an organisation.

Key Risks Arising From Shadow IT.

The issue for most organisations is that these practices result in increased business risk across the following key areas:

1. Data Security: Shadow IT compromises the security of company IT through information leaks. This can occur because of breaches in popular applications due to lax security measures and as workers take confidential information out of the workplace. In addition, unsecured devices can introduce viruses and other threats which further jeopardise security.
2. Compliance Risk – When data is shared externally, the risk of breaching regulations associated with information and privacy is increased.
3. Brand Damage: Data security and compliance breaches have flow on effects to brand reputation and customer confidence.
4. Financial Risk: As business departments purchase duplicate services and IT loses its power to negotiate on bulk, organisations face unnecessary costs. Add to this, the expense associated with restoring systems and repairing brand damage, and these costs spiral out of control.

In addition to business risk, Shadow IT hinders company wide communication through the use of a number of collaboration systems that do not communicate with each other.

Harnessing Shadow IT.

With Shadow IT posing a significant risk to business operations and its incidence continuing to growth exponentially, it is time to bring it out of the shadows and into the light.

While the temptation to completely eradicate Shadow IT is understandable, CIO’s and IT decision makers can drive superior operational performance by channeling Shadow IT to their advantage. Business units and employees that innovate, take ownership of their performance and find solutions to boost efficiency and speed of output make valuable partners.

Decision makers should take the time to understand business requirements, the gaps in their IT infrastructure and employees ideas for enhancing productivity. Identifying how to safely adapt tools and applications into the organisation and making corporate IT systems flexible and easy to use will boost staff engagement and enhance output.

By understanding and embracing Shadow IT, leaders can boost organisational performance and return control and visibility to IT departments.

About Jon Evans

Jon’s rich and varied career in I.T. began in the UK with leading networking hardware vendors Cabletron Systems and 3Com.  During the massive surge in Internet technology a few years later, Jon moved to UUNet as Senior Partner Manager, where he met business partner, Simon Rogan, the owner of Sirocom in the UK – a leading Virtual Network Operator (VNO) in Europe.

Recognising the clear benefits of the VNO service model, Jon set up the Australian arm back in 2006. Azzurri Communications purchased Sirocom in 2007, with the Australian shareholding purchased in 2009. In 2015, the company stepped into its own corporate identity – Enablis, now recognised as one of the fastest growing, leading managed service providers in Australia. Jon’s vision to enable businesses to transform with technology drives the company’s success.