Is Shadow IT Putting Your Business Data at Risk?

What is shadow IT?

Shadow IT refers to your employees’ use of software, apps, email, browsers, or devices that aren’t part of your company’s approved technology plan. This tech is outside your IT team’s control and may violate security protocols. It creates a serious cybersecurity risk that could cost your company millions. It also means all the money spent on authorized devices, apps, and software is going to waste. 

What does shadow IT look like in action?

  • Employees sending work documents to their personal emails to use when working remotely
  • Departments deciding independently to adopt a new collaboration app they prefer 
  • Employees saving business data to personal cloud storage that doesn’t have enterprise-level security
  • Workers storing confidential business files in apps on their unsecured mobile devices
  • An IT team that becomes ineffective at controlling security risks because they have no idea what random tech employees are using

It’s chilling to realize your employees may be putting intellectual property and other sensitive data at risk. Though it’s a serious security threat, try to keep in mind that employees don’t do this with malicious intent; they’re simply trying to provide themselves with the tools they need to perform their jobs well.

To solve this problem, you must get a comprehensive look at the scope of your company’s shadow IT and understand why employees are choosing to use this unauthorized technology. 

How to eliminate the threat

Identify the scope of shadow IT within your organization

You can’t protect against unknown threats, so the first step is to shine a light on all the shadowy activity in your business. 

Tracking apps such as Microsoft 365 Cloud App Security can pinpoint what applications are running on your network. Shadow IT accounts for 50% of the tech used in most companies, so don’t be shocked if you see a figure close to that. 

Tracking apps can help you evaluate the security threat level associated with each shadow app so your IT team can take action if needed. These apps can also help you determine which employees are using the shadow tech so you can talk to them about the threats involved and, most importantly, find out why they’ve gone outside of recommended technology solutions.

Understand why employees prefer using shadow IT 

Now that you have a clear understanding of all the errant technology your employees are using, it’s time to identify why they prefer this over the sanctioned options. You can do this by comparing the features of the shadow IT to the software and other tech in your company’s official technology plan. You can also conduct a survey asking employees what they like about the unauthorized programs and what they dislike about the company-approved technology. 

Common reasons employees ditch authorized technology in favor of shadow IT

  1. The user interface is outdated or difficult to use
  2. It lacks the tools and features they need 
  3. It’s painfully slow
  4. There’s no mobile option

Moving forward with a better technology solution

After evaluating the various shadow software and gathering firsthand information from employees, you may find that one or more of the shadow IT options is a better fit for your business. There’s no reason to hold on to antiquated technology that no one wants to use. If the shadow tech has the features your team wants, provides the level of security your business needs, and fits the budget, go for it! 

If none of the currently used shadow IT is appropriate for your business, it’s time to look for better options. Compile a list of the features your team wants most and the security protocols that are non-negotiable. 

Ideally, you want to find a solution that fits as many needed features as possible into one service. If employees have to navigate half a dozen apps to complete a task, they’re going to continue circumventing your company’s software solutions in favor of a more convenient option. 

What security measures do you need to keep your business data secure?


Encryption is a process that makes your data useless to unauthorized users. If a hacker manages to get their hands on an important file, they won’t be able to read the information. Look for a business software provider that offers 256-bit encryption (i.e., the same encryption the U.S. government trusts to protect top secret files). 

Also, keep in mind that your business data needs to be encrypted when in transit (sharing a file) and at rest (in storage). Only 9.4% of cloud service providers encrypt data at rest, which means they aren’t providing secure data storage. 

Hackers are well aware of this vulnerability and will exploit it whenever they can. Just ask Equifax; they learned this lesson the hard way in 2017 when attackers stole the unencrypted stored data of over 145 million people. 

Two-factor authentication

Two-factor authentication is a user authentication method that requires a password and an additional step such as a code sent to a mobile device or an ID card. It’s a much safer method of authenticating a user than password-only logins. 

Most of us are guilty of reusing passwords, and it creates a huge security risk. If an employee is reusing a work password — or, even worse, a work password and work email— any data breach in a secondary site will jeopardize the work account. It’s essentially putting the keys to the castle right in the hacker’s hands. 

Two-factor authentication dramatically reduces this security threat. If an unauthorized user gets hold of an employee’s login credentials, it won’t matter. The second level of authentication isn’t available to them, so they can’t access the account. 

Precise roles and user permissions

Software that allows you to customize the way each employee, client, or vendor can interact with your business files is an essential security feature. Granular roles and permissions let you decide what information a user sees and how they interact with it. 

When evaluating various providers, get a clear idea of the amount of control and customization their roles and user permissions allow. You should easily be able to do things such as add or remove permissions at any time, “view as” each role to ensure it provides the level of access you expected, and dictate whether users are allowed to edit, print, or download documents. 

Strong password enforcement

Two-factor authentication is the best way to authenticate accounts securely, but that doesn’t mean it’s ok to use a simple password. Technology advances rapidly, as do the tricks available to hackers. Ensure your employees’ accounts are as secure as possible by enforcing strong passwords. 

The anatomy of a strong password:

  • No sequential numbers
  • No personal information such as name or date of birth
  • At least 12 characters long
  • No common substitutions such as a dollar sign to replace an “s”
  • Use a mix of uppercase and lowercase letters, numbers, and symbols

What software features do most employees want?

Easy file sharing

Employees need to be able to securely share business files with colleagues, vendors, and clients. For the most convenience and flexibility, your employees should have various file-sharing options such as secure direct links for people who don’t have account access, password-protecting files, and setting expiration dates for access.

Communication tools

Good communication is the foundation of a good business. A technology solution that enables fast, easy communication across teams is a valuable asset that boosts productivity and employee engagement. Set your team up for success with features such as leaving comments on specific files or folders, sending messages within the platform, and assigning tasks. 

File syncing and version control

Automatic file syncing and version control make collaboration a breeze. 

Ever been stuck trying to figure out which version of a project file is the most recent? How about working hard on a document and then realizing it doesn’t reflect the team’s recent additions? At best, those issues are extremely frustrating. At worst, they derail important projects and could lose your company money.

Secure data storage providers such as Onehub make sure this never happens to you or your employees. Files are automatically synced across devices, so an employee can go from their laptop to their phone and still have the correct file information at hand. 

Software integrations

Microsoft Office Online and Google Docs are two standard options for creating and editing files. You can save your employees a ton of time by selecting a software provider integrated with both. That means employees can preview, create, and edit documents without having to leave the platform. If you consider the number of files an employee works with daily, you can see how that time savings add up. 

DocuSign is another great integration to look for. If your company regularly needs clients to sign non-disclosure agreements, contracts, or other important documents, this is a valuable feature to consider. Not only is it faster and easier for your employees, but your clients will also appreciate not having to print, sign, scan, and email the files back. 

The best way to prevent the security threats that come with shadow IT is to provide employees with a robust software option. Onehub provides all the security features your company needs and all the tools your employees want. For the best of both worlds, sign up today for our free 14-day trial