What is Shadow IT?

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What is Shadow IT?

By Allen Bernard, Business Technology Journalist

The problem of unknown and unapproved applications running in your organization will only get worse if you don’t know what to look for or how to stop it.

In its most basic form, the term “Shadow IT” describes the procurement and use of hardware, software, or service technologies such as telecom connectivity, without the knowledge or approval of an organization’s IT department.

While this is a common, everyday occurrence at companies large and small, it is a huge, costly problem for IT and the finance department. In large enterprises, Shadow IT accounts for 30% to 40% of its total technology spending; 83% of employees store company data on unsanctioned cloud services; and, according to Gartner, 33% of cyber attacks will target Shadow IT in 2021. And the problem has only gotten worse since the COVID-19 pandemic began in early 2020 because of the number of people working remotely.

There are two main drivers of Shadow IT: busy IT departments that are spread too thin to deliver the services and applications their organizations need to stay competitive, and easy access to cloud-based applications that can be purchased with a credit card. 80% of workers admit they bypass IT and use unsanctioned cloud services.

Even though the impulse behind Shadow IT may be noble – managers and line of business leaders doing what they can to help their teams meet their goals – the fallout in terms of cyber security incidents, compliance lapses, the accounting and financial impact on IT specifically, as well as the organization at large, can be quite costly.

Shadow IT makes it impossible to understand where technology expenses should be allocated (which has a major impact on yearly budgeting), who is spending the money (and why), what is being purchased, and the business benefit (if any) all of that spending provides.

What is Shadow IT?


Posted on

November 3, 2021

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