As modern businesses continue to adopt more software as a service (SaaS) applications, the challenge of managing and keeping track of all these applications becomes ever more cumbersome. The problem is further exacerbated by the phenomenon of shadow IT, wherein employees utilize unsanctioned cloud and SaaS applications without prior IT approval or oversight.

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Shadow IT can lead to heightened risk and SaaS sprawl. Ultimately, it makes it virtually impossible for IT personnel to manage and govern these applications effectively. That’s why shadow IT discovery is so important—it’s a vital step of SaaS security that enables organizations to assemble and inventory all of the SaaS applications in use in their organization.

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Shadow IT poses significant risks to security operations. When employees use unsanctioned applications that IT departments are unaware of, there’s zero visibility into what data is being stored, who has access to that data, and whether or not that data is properly encrypted and secured. This exposes organizations to the risk of a data breach, compliance violations, and other troublesome incidents. Furthermore, unmanaged applications likely lack important security configurations like multi-factor authentication, SSO, or encryption, meaning sensitive data is particularly vulnerable to cyber-attacks.

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To mitigate shadow IT risks, IT departments must be able to identify all SaaS applications in use throughout the organization. This is where SaaS discovery tools are so valuable. SaaS discovery initiatives allow IT personnel to gain visibility into all SaaS applications in use, as well as who is using them and for what purposes. With this information, IT departments can manage and govern these applications more effectively, ensuring that they are properly secured and in compliance with all relevant policies and regulations.

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Shadow IT cyber security is a rapidly growing concern for businesses, both small and large. As SaaS adoption continues to grow, so too do the risks associated with shadow IT. As such, comprehensive shadow IT discovery is quickly becoming an essential step in the process to help manage cyber threats and ensure that organizations can safely and effectively leverage SaaS applications to operate successfully.

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What Is Shadow IT?

So what is shadow IT, and why is it important for businesses to understand? Shadow IT refers to employees’ use of unmanaged or unauthorized technology. This might include cloud and SaaS applications, as well as other hardware and/or software tools. The common denominator is that these applications and tools are used without approval from IT or those responsible for IT security, often for reasons such as convenience or to complete work more expeditiously. While their intentions may be earnest, and this type of SaaS adoption can dramatically increase productivity, shadow IT can create substantial security and compliance issues for organizations.

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Perhaps the greatest driver of shadow IT is the ease with which employees can adopt SaaS applications. As more companies embrace remote work and distributed teams, and with the availability of free plans on many SaaS tools, employees can easily adopt and use cloud-based applications without asking for approval from IT. This can lead to SaaS sprawl, where organizations have hundreds (or even thousands) of different SaaS applications in use—many of which IT may be completely unaware of.

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So, what should you do to identify shadow IT within your organization? One common approach is to conduct a comprehensive audit of all technology applications in use across the entire organization. This will likely involve reviewing local network logs, interviewing employees, and analyzing data traffic in order to identify any unsanctioned applications.

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Additionally, IT departments may use SaaS discovery tools to locate any cloud-based applications in use. When these applications are identified, IT can take steps to bring them under control and ensure that they’re being properly managed and governed.

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Examples of shadow IT can be found in practically every modern company. For example, an employee may utilize an unsanctioned file-sharing application to share confidential documents with a vendor, or an employee may use an unauthorized messaging app to communicate with colleagues. In some instances, employees may even use cloud-based applications to store sensitive customer data, which can put the entire organization at risk of a data breach or compliance violation without proper security controls and configurations in place.

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Shadow IT Discovery Tools

How to detect shadow IT effectively will likely depend on the company’s resources and IT capabilities; detecting shadow IT can be a challenging and time-consuming process. With the sheer volume of SaaS applications available, it’s nearly impossible for IT departments to keep up with adoption of cloud-based applications in their organization without a shadow IT discovery tool to make this process easier and more manageable.

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Shadow IT detection tools—which are also sometimes referred to as SaaS discovery platforms—are engineered to help IT teams detect shadow IT applications used by anyone across an organization.

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There are numerous ways shadow IT cloud discovery tools can be leveraged to help detect shadow IT. One common approach is to utilize network traffic analysis, which involves analyzing data traffic on the network to identify any unusual activity or unapproved applications. With the prevalence of modern work, however, many employees are conducting their work outside of the corporate network, which means that activity is not monitored. Another approach is to mine expense reports, which is not only time consuming but provides limited visibility. Finally, there is Nudge Security’s solution for discovering SaaS sprawl: Integration with your corporate email provider, which provides a rich source of data to discover and build a continuous inventory of SaaS applications, accounts, users, resources, and activities. (This method has helped us discover more than 32,000 unique SaaS applications for our customers.)

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One of the most important features of shadow IT discovery tools is their ability to provide ongoing monitoring and detection of unauthorized or unsanctioned applications. This helps IT personnel stay on top of any new cloud-based applications that employees may be using, as well as identify any applications that have been used in the past but are no longer needed.

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Managing Shadow IT

Managing shadow IT is an ongoing, continually evolving process that requires constant vigilance and attention. Once shadow IT has been identified, it’s vital for organizations to take steps to manage and govern those applications effectively. This may involve implementing SaaS security best practices as well as integrating employee-led SaaS adoption into shadow IT governance frameworks.

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Perhaps the most important step in managing shadow IT is to establish clear, concise policies and procedures for the use of SaaS applications. This will likely involve defining acceptable use policies, specifying the types of applications that are allowed and/or prohibited, and establishing specific guidelines for data protection, access controls, and user behavior. By establishing sound policies and procedures, IT departments can ensure that all employees are aware of the risks associated with unsanctioned SaaS applications and understand their responsibilities in managing those risks.

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Another important aspect of managing shadow IT is implementing appropriate technical controls. This requires implementing data loss prevention (DLP) measures, such as content filtration, encryption, and access controls, to better protect sensitive data from unauthorized access or disclosure.

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In addition to adequate technical controls, effective management of shadow IT also necessitates ongoing monitoring and analysis of SaaS application usage. This helps IT teams identify new applications that employees are using and determine whether those applications are safe and compliant. Regular audits and assessments of SaaS application use can help identify any potential security vulnerabilities or compliance issues and allow IT personnel to take corrective action before any damage occurs.

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Shadow IT Solutions

The use of SaaS applications has become an integral part of most modern businesses’ everyday operations. However, the rise of employees adopting SaaS applications outside the purview of IT and security teams has exacerbated the prevalence of shadow IT and the associated risks that come along with it. To effectively manage these risks, organizations must implement a comprehensive SaaS security solution that includes shadow IT discovery, governance, and ongoing management.

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Nudge Security specializes in helping organizations discover and manage the use of all SaaS applications, whether managed by IT or not. Nudge Security’s powerful, patented SaaS discovery method is designed to identify all of the cloud and SaaS applications in use on an organization’s network—even those that are hidden from traditional IT monitoring tools. Nudge Security’s platform generates a shadow IT report that helps IT teams identify potential risks and take the appropriate actions to ensure that the company’s sensitive data remains protected.

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Nudge Security’s solution doesn’t stop at shadow IT discovery—the platform also includes powerful governance features that empower organizations to integrate employee-led SaaS adoption into their IT governance frameworks. This means that companies can define policies and procedures for SaaS application use, monitor that application usage, implement technical controls to protect sensitive information, and engage with employees in real-time using tailored security nudges.

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In addition to Nudge Security’s discovery and governance capabilities, the platform also includes ongoing management features that allow organizations to continually monitor and manage SaaS application usage. These features allow for regular audits of application usage, ongoing monitoring of application security and compliance, as well as ensuring complete IT offboarding when individuals leave the organization.

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Ultimately, Nudge Security provides a highly effective solution for organizations to address and manage the many challenges associated with shadow IT. By providing comprehensive shadow IT discovery, governance, and continuous management, Nudge Security allows organizations to effectively manage the risks associated with unsanctioned or unauthorized SaaS applications and ensure that the company’s sensitive data is adequately protected.