In any enterprise, technology that flies under the radar of the IT department represents a significant, often invisible, threat. This phenomenon is known as Shadow IT: the hardware, software, and SaaS applications used by employees without explicit IT approval or oversight.
It’s a problem that often stems from good intentions—an employee finds a tool that helps them do their job more effectively or a team signs up for a service to improve productivity for their specific workflow. While the intent is to boost efficiency, the result is a collection of untracked applications that creates substantial enterprise risk.
This article will explore the critical nature of Shadow IT Risk and introduce effective strategies for managing it, demonstrating how a centralized credential management application like Passpack illuminates these hidden areas and costs to better secure your organization.
Why Shadow IT Flourishes (Even When It Shouldn’t)
Shadow IT is not a sign of malicious intent nor impending cyberattack; it’s a reality in most modern enterprises today. Its growth is driven by several contributing employee attitudes and behaviors:
- Perceived IT Bottlenecks: Employees may feel that official procurement and approval processes are too slow for their immediate needs.
- Translation: It’s easier to ask for forgiveness than permission.
- Ease of Access: The simplicity of signing up for most SaaS applications means a new tool is just a click away.
- Translation: It’s faster if I just do it myself.
- Desire for Specific Features: Sanctioned tools may lack the specific features an employee or team needs to perform a task efficiently.
- Translation: IT isn’t keeping up with evolving user needs and application updates.
- Remote & Hybrid Work: Blurred lines between personal and professional devices and networks make it easier for unapproved applications to enter the enterprise ecosystem.
- Translation: You can’t tell me what apps I can and cannot have on my own phone.
Unpacking the Risks: What Enterprises Don’t See CAN Hurt Them
The use of unsanctioned applications introduces dangers that can have serious consequences for all organizations.
- Security Vulnerabilities: Every unvetted application increases the enterprise attack surface. These tools may lack proper security protocols, go unpatched, or allow for use of weak credentials, creating new entry points for cyberattacks.
- Data Loss & Leakage: When sensitive company data is stored in unmanaged applications, the risk of data loss is high. There are no guarantees of proper encryption or backup, and when an employee leaves, they may take that data with them, intentionally or not. Further, they may still retain access to apps and data if permissions are not revoked.
- Compliance Violations: Storing or processing data in non-compliant applications can lead to severe regulatory penalties under frameworks like GDPR, HIPAA, and NIST should an unsanctioned app be compromised.
- Wasted IT Spend & Inefficiencies: Shadow IT often leads to redundant software licenses and payments for multiple tools that perform the same function, a challenge known as “tool sprawl.” This also creates data silos that hinder cross-team collaboration when data is stored in unsanctioned apps.
Gaining Control Step 1: Discovery & Visibility
You can’t manage what you can’t see. Therefore, the first step in mitigating Shadow IT Risk is discovery. The goal is to gain as much visibility as possible into the applications being used across the enterprise. Strategies for discovery include:
- Network traffic analysis
- Reviewing proxy and firewall logs
- Conducting employee surveys
Microsoft suggests a combination of these techniques is often required for a complete picture. While Passpack is not an application discovery tool, this foundational step is crucial for identifying where the risks lie.
Gaining Control Step 2: Centralized Credential Management & Oversight
Once all applications are discovered, the next critical step is to gain control. Centralized credential management provides a powerful layer of security and oversight, even if an application isn’t officially sanctioned. By managing the credentials used to access these tools, approved or not, once identified, IT departments can begin to effectively address Shadow IT Risk and regain a vital measure of control.
How Passpack Helps Mitigate Shadow IT Risk
Passpack is designed to provide this exact layer of centralized control, helping businesses manage the credentials for both sanctioned and newly discovered applications. Here’s how:
- Centralized Credential Vault: Even if an app started as a piece of Shadow IT – that is, initially installed without explicit IT approval – its credentials can be stored in Passpack’s secure vault. This immediately brings the application under administrator oversight without disrupting employee workflows.
- Team Oversight & Admin Controls: Passpack provides organizations with clear visibility into which teams and users have credentials for specific services, and offer advanced administrative features to enforce strong password creation and sharing policies and monitor access, even for apps added after initial discovery.
- Secure Sharing & Role-Based Access Control (RBAC): Access to credentials stored in Passpack is governed by the principle of least privilege (PoLP). This ensures that even if employees use a wide variety of tools, access is controlled and securely shared on a need-to-know basis. Users are only authorized to access services connected to their role, and Passpack tracks all user activity for auditing purposes.
- Facilitates Thorough Offboarding: When an employee leaves, the risk of data exfiltration from unsanctioned apps is high. In other words, the organization may not be aware an app or data remains on a departing employee’s device if its credentials were never registered with IT, potentially leaving back doors open. Passpack streamlines the offboarding process by allowing IT to instantly revoke all access associated with a user’s vault regardless of how it came to be there, securing countless loose ends at once.
Beyond Tools: The Importance of Policy and Education
Technology alone is not a complete solution. An effective strategy for managing Shadow IT Risk must also include clear, well-communicated IT policies for application usage and approval. An environment without such transparency encourages users to hide their “secret” productivity enhancers for fear of punishment. And if it turns out an employee-discovered app is a better solution than the sanctioned tool, the organization misses out on those advantages.
Educating employees on the security risks of unvetted tools and fostering a collaborative, trusting relationship between users and IT can transform your team from a source of risk into your first line of defense as well as a source for process improvement.
Illuminating the Shadows for a Secure Enterprise
The proliferation of Shadow IT Risk is a serious challenge for modern enterprises. While discovering unsanctioned applications is the first step, the ultimate goal is control. Centralized credential management with a tool like Passpack provides the crucial oversight needed to secure your organization. Effective risk management isn’t just about eliminating every unapproved tool; it’s about gaining visibility and enforcing security at the point of access, ensuring that no credential is left in the shadows.
Try Passpack Risk-free!
Are you ready to shed light on your enterprise’s security blind spots? Request a personalized demonstration of Passpack’s credential management and sharing features or see the benefits firsthand by activating your FREE 28-day trial of the Passpack Business Plan today.
Frequently Asked Questions (FAQ)
- Can Passpack block employees from using certain apps?
No. Passpack is a credential management solution, not an application blocker. Its strength lies in managing the credentials for known applications, providing security and oversight for tools once they have been discovered, rather than preventing their use outright. - How does Passpack help if IT doesn’t know about an app?
IT must first discover the application through methods like network analysis or employee surveys. Once an app is identified, Passpack becomes the solution for securing its credentials and bringing it under centralized IT oversight. Again, what you don’t know can hurt you. If IT doesn’t know the app exists, there can be no control. - How can we encourage our employees to voluntarily add discovered app credentials to Passpack?
Focus on the benefits for them: ease of access (no more forgotten passwords), secure sharing with teammates, and the security of a centralized vault. Avoid scare tactics and threats of punishment as these only encourage covert use. A clear company policy that mandates the use of Passpack for all work-related credentials in a positive light, combined with education on the risks of not doing so, is also highly effective.