Shadow IT: The hidden risk growing inside your company

The prevalence of Shadow IT has exploded by 59% since the widespread adoption of remote work models, with 54% of IT teams describing their organizations as "significantly more at risk of a data breach" due to this surge. Almost half of all cyberattacks are now linked to Shadow IT, with the average cost of addressing these breaches exceeding $4.2 million. As we delve into this growing challenge, the statistics reveal a problem that's far more pervasive than most leaders realize.

What is Shadow IT?

Shadow IT refers to any software, application, or tool that's used inside your company without formal approval from the IT or procurement department. According to Gartner, 41% of employees acquire, modify, or create technology that their IT departments are unaware of, and this number is projected to reach a staggering 75% by 2027.

Common examples include:

• A team signing up for a new project management tool with a corporate card
• A free trial of an AI tool quietly turning into a paid subscription (ChatGPT has become the number one Shadow IT offender, according to recent reports)
• A shared Google Drive created outside your official domain
• Unauthorized messaging apps and productivity tools adopted by remote teams
• Personal devices connected to corporate networks without proper security protocols

While each instance might seem innocuous, research reveals that the number of SaaS applications running on corporate networks is typically three times what IT departments are aware of. This invisibility creates compound risk.

Why it matters

1. Security Gaps

Unapproved tools often bypass your company’s security protocols. Sensitive data may end up in third-party systems with unknown or insufficient security measures. In 2022 alone, over 5 billion malicious requests targeted unmanaged corporate APIs - a key factor for Shadow IT risks. An earlier Gartner research found that by 2020, Shadow IT resources would account for a third of successful attacks on enterprises.

2. Compliance Risks

Most compliance frameworks, such as GDPR, ISO 27001, and DORA, require fullvisibility into the toolsand vendors you use. If you don’t know what’s being used, you can’t guarantee compliance. Regulatory failures due to Shadow IT can result in hefty fines; for example, in 2022, the SEC fined Wall Street firms $1.1 billion for using Shadow IT communication tools.

3. Budget Waste

Shadow IT leads to duplicate subscriptions, overlapping functionalities, and unused licenses. As much as 30% of IT spending is tied to Shadow IT untracked and unmanaged. Over a third of all software expenditure is wasted ltiple departments may pay for similar tools, missing out on volume discounts and driving up costs.

4. IT Chaos

‍Departments adopting their own tools without alignment creates disconnected workflows and unsupported software. This fragmentation leads to inefficiencies and makes it harder for IT to support, integrate, or secure the organization’s digital infrastructure. Employees juggling multiple apps also report higher rates of burnout and frustration due to digital overload.

‍

‍

Shadow IT is more common than you think

In today’s hybrid and remote work environments, employees are empowered to find their own solutions. This is not necessarily a bad thing. However, this empowerment often comes at the expense of oversight. A recent report found that 65% of remote workers use non-approved tools, and 60% of IT leaders expect remote workers to expose their company to a data breach. Many organizations underestimate the true number of tools in use by a factor of two or more. If you think your stack includes 100 tools, the real number could easily be 200 or more.

‍

What can you do about it?

The first step is awareness. Here’s how to tackle Shadow IT effectively:

1. Audit your stack: Start by identifying all software tools currently in use across your organization. This includes checking expense reports, network logs, and employee feedback.
2. Implement software management tools: Use platforms that provide visibility into your software environment, helping you discover and manage unauthorized tools.
3. Establish clear policies: Create straightforward guidelines for software procurement and usage, making it easy for teams to request new tools through approved channels.
4. Educate your teams: Help employees understand the risks of Shadow IT and the benefits of following proper processes.
5. Review regularly: Make periodic reviews of your technology stack a standard practice to catch new risks and optimize your software spend.

You can’t manage what you can’t see. That’s why we offer a free Shadow IT scan. A fast and simple way to identify:

• All software tools currently in use
• Which tools are approved, which aren’t
• Where the biggest risks or overlaps are hiding

It’s the easiest way to regain control without slowing your teams down.

‍

Final thoughts

Shadow IT isn’t just an IT problem. It’s a security issue, a compliance concern, and a budget challenge. But you don’t have to let it grow unchecked.

Sastrify empowers you to regain visibility and control, so you can close security gaps, ensure compliance, and eliminate unnecessary costs - all without slowing your teams down. Organizations that proactively manage their software stack consistently report substantial savings and a dramatic reduction in risk.

Ready to see what’s really happening in your stack? Book your free Shadow IT scan with Sastrify today and discover how easy it is to protect your business, streamline your tools, and unlock real savings.

Your next step to a safer, smarter, and more cost-efficient software landscape starts now.