Shadow IT incidents continue to reshape cybersecurity priorities, revealing a complex interplay of risks and responses. Several shadow IT examples are Okta’s breach incident at the end of 2023. Higher education institutions have also faced challenges, with unauthorised systems like UMBC’s grant management software causing vulnerabilities such as SQL injections, highlighting weak oversight and decentralised IT governance.
The IBM Cost of a Data Breach Report (2024) highlighted that breaches involving shadow data increased total costs by 16%. Another problem is that data breaches involving shadow data took an average of 291 days to identify and contain, which is 24.7% longer than those that did not involve shadow data.
Globally, shadow IT now accounts for more than half of daily software usage in many organisations, with sales and marketing teams responsible for 65% of unauthorised SaaS usage.
However, bridging security gaps requires addressing both technological and cultural issues, such as improving visibility into unauthorised tools and understanding the motivations behind their adoption.
So, let’s talk about several shadow IT-related incidents and define the strategies for your future.
Common Categories of Shadow IT
Shadow IT incidents continue to reshape cybersecurity priorities, revealing a complex interplay of risks and responses. For a deeper understanding of what shadow IT entails and its future implications for IT management, kindly read “What is Shadow IT? An Outlook for IT Management in 2025.”
Cloud-Based Services
Shadow IT in cloud-based services often involves employees using unauthorised cloud storage solutions to share files outside the organisation’s sanctioned systems.
For example, an employee might use personal Dropbox or Google Drive accounts instead of approved storage solutions like Microsoft OneDrive. This bypasses controls tied to the company’s active directory, reducing visibility for IT teams.
A real-world study by Cledara (2023) revealed that 65% of unauthorised SaaS usage is in sales and marketing teams. In the Okta case, a sales team used a free-tier cloud storage service to share customer data. This choice exposed sensitive information, leading to a data breach affecting over 1,000 client records.
IBM’s Cost of a Data Breach Report (2024) estimates breaches involving shadow data add 16% to total incident costs, reaching an average of $5.27 million.
Therefore, companies with decentralised IT structures are at higher risk for shadow IT incidents. The lack of centralised oversight correlates with longer detection and containment times, increasing breach costs by nearly $1 million.
To counter this, organisations can integrate monitoring tools that detect unauthorised cloud storage use and ensure all data exchanges are logged and encrypted. Adopting AI for automated detection of unsanctioned services could significantly reduce response times while enhancing data governance.
As SaaS shadow IT management becomes a necessity, understanding how SaaS management eliminates shadow IT and saves costs is crucial. Learn more in “What is SaaS Management? How Does It Kill Shadow IT & Save Budget?”
Productivity Tools
Shadow IT in productivity tools often arises when employees rely on unauthorised apps to manage tasks or collaborate.
Let’s use shadow IT examples; a marketing team might use a free version of Trello to coordinate campaigns instead of a company-sanctioned project management tool. This bypasses integration with the organisation’s active directory, leaving the information technology team unaware of potential vulnerabilities.
A survey by Cledara revealed that 23.6 million shadow IT activities occurred in just 30 days across 200 businesses, with shadow IT usage being widespread and frequently involving productivity and collaboration tools.
A breach involving one such tool resulted in exposed task data for 300 projects, affecting timelines and client relationships. This highlights the connection between unauthorised tools and operational risks.
Analysis indicates that industries relying on real-time collaboration, like finance and education, are particularly vulnerable. Unauthorised productivity tools often lack enterprise-grade security, increasing the likelihood of data breaches.
Companies should establish clear approval processes for new tools to mitigate risks and periodically audit software usage. Additionally, integrating approved tools with existing systems and educating employees on security risks can reduce reliance on shadow IT, improving both compliance and productivity.
Security incident management is vital in addressing breaches caused by unauthorised cloud storage usage and productivity tools. Kindly look deeper into its definition and process in “IT Security Incident Management: Definition, Importance, & Process.”
Communication Platforms
Shadow IT in communication platforms arises when employees use unauthorised apps to share information. For instance, an employee might use WhatsApp or Telegram instead of an organisation-approved tool like Microsoft Teams. These platforms often bypass enterprise-grade security controls, such as active directory integration, making them invisible to information technology teams.
Let’s create a scenario of shadow IT examples in communication platforms: a financial firm experienced a breach when sensitive client data was shared over a non-secured messaging app. The breach led to a $2.3 million regulatory fine, further emphasising the need for robust governance.
And please consider the growing trend: industries with high client interactions, such as healthcare and financial services, are more likely to face risks from unauthorised communication tools. Employees prefer these tools for their convenience, yet their use significantly raises compliance and data protection risks.
Therefore, organisations must educate employees about security implications and ensure communication tools are integrated with monitoring solutions. By implementing automated detection systems and enforcing clear policies, businesses can reduce their exposure to these vulnerabilities.
Implementing robust solutions for security incidents in communication platforms is essential for mitigating risks from unauthorised communication platforms. Kindly explore top tools in “7 Security Incident Management Software in 2024 – In-Depth Review.”
Personal Devices or Software
Shadow IT through personal devices or software occurs when employees use their own smartphones or laptops for work without proper authorization. For instance, an employee might access corporate emails or cloud storage from an unsecured personal device, bypassing active directory policies. This creates significant risks for data integrity and compliance.
The IBM Cost of a Data Breach Report (2024) highlights that breaches involving stolen or compromised credentials, which could potentially be used to access corporate systems from personal devices, took the longest to identify and contain (292 days).
Let’s make a prominent scenario of a healthcare worker who stored patient data on a personal laptop, leading to HIPAA violations and a $1.5 million fine.
Decentralised IT governance and lack of Bring Your Own Device (BYOD) policies correlate strongly with personal device risks. To address this, organisations should enforce endpoint security and implement device management software to control access. Clear guidelines on personal device use and employee training can significantly reduce these risks while maintaining operational flexibility.
Effectively handling security incidents requires an understanding of different management approaches. Learn about them in “Types of Security Incident Management & How to Handle Them.”
How Octobits Helps You Manage Shadow IT?
As you see, unchecked shadow IT introduces risks like data breaches and hidden costs, especially when employees use unauthorised tools or services. Without visibility, your information technology team is blind to potential vulnerabilities in cloud apps or rogue devices.
Octobits consolidates all your IT services into a single dashboard, giving you complete control and visibility over your software ecosystem.
Octobits seamless integration with platforms like Microsoft 365, AWS, and Azure ensures unauthorised tools and cloud storage are identified and managed. Active Directory integration keeps user access centralised and secure, so no device or software slips through the cracks.
As SaaS shadow IT management, Octobits helps you proactively monitor all IT activities, simplify licence management, and consolidate alerts to resolve issues before they escalate. That’s why, you can start using Octobits for free during December 2024.
In Closing
As we talk about various shadow IT examples above, the urgency of addressing both the technological and human factors driving shadow IT adoption.
Strategies like centralised oversight, AI-driven detection tools, and proactive employee training are essential for mitigating these risks. Therefore, Octobits can help you simplify shadow IT management, consolidate IT ecosystems, and enhance security practices.
At the end of the day, success lies in learning from shadow IT examples and adopting tools that provide visibility and control.
References
- Burgess, C. (2021, August 12). Recent shadow IT-related incidents present lessons to CISOs. CSO Online. Retrieved from https://www.csoonline.com/article/571157/recent-shadow-it-related-incidents-present-lessons-to-cisos.html
- Orr, Selma & Bonyadi, Cyrus & Golaszewski, Enis & Sherman, Alan & Peterson, Peter & Forno, Richard & Johns, Sydney & Rodriguez, Jimmy. (2022). Shadow IT in higher education: survey and case study for cybersecurity. Cryptologia. 48. 1-65. 10.1080/01611194.2022.2103754.
- Muncaster, P. (2023, November 30). Okta admits all customer support users impacted by breach. Infosecurity Magazine. Retrieved from https://www.infosecurity-magazine.com/news/okta-all-customer-support-users/
- Cledara. (2023). The state of shadow IT in 2023. Cledara. Retrieved from https://resources.cledara.com/state-of-shadow-it
- IBM & Ponemon Institute. (2024). Cost of a data breach report 2024. IBM. Retrieved from https://www.ibm.com/reports/data-breach
