Shadow IT in the SaaS Environment – What Enterprises Can do to Mitigate the Risks

Shadow IT in the SaaS Environment – What Enterprises Can do to Mitigate the Risks

Since shadow IT is typically carried out unintentionally, companies do not devote as much attention to it as they should. However, this issue is extremely important in terms of company security and financial investment.

Businesses have begun to move away from traditional software licensing methods in favour of the SaaS model, which is more accessible, easy, and cost-effective.

Many SaaS organizations expand through product-led models, which means they focus on end-user adoption. Employees can quickly sign up for new products and assess their benefits thanks to the user-friendly nature of SaaS.

In the SaaS world, connecting apps is a lot easier. The majority of the apps have direct one-click interfaces with other useful apps. Then there were external reasons that compelled businesses to use SaaS. To ensure company continuity, organizations were forced to use SaaS as a result of the pandemic.

With employees stating that they want to work remotely, organizations were compelled to offer remote work as a way to retain and recruit top talent. It initiated a chain reaction. More SaaS apps meant more shadow apps, and more remote employees meant more SaaS apps and that meant more shadow IT. 

In fact, 57 percent of IT leaders are concerned about shadow IT, according to Zluri’s “The State of SaaS Management Report 2021.”

Compliance, Security, & Financial Issues 

The IT department will be unable to plan for data security across these hidden cloud applications if employees store and access data from multiple locations, particularly outside the company network and firewall.

When the IT team loses control of the SaaS applications that have been deployed, the entire company’s data is at risk. It also leaves sensitive data unsecured and vulnerable to a variety of security threats. A former employee with access that hasn’t been terminated could also be the source of the breach.

Another issue with shadow applications is that employees save their cloud app credentials in their browsers, and consumer vaults. These are the dangerous practices that lead to the theft of credentials. The worst is the practise of using the same credentials for various accounts and accessing shadow IT software with the same credentials. It’s a goldmine for cybercriminals since the rewards for a successful attack are far bigger than when an employee uses different passwords for different accounts.

Also Read: Addressing SaaS Security Misconfiguration Risks

Because most of these regulations are predicated on data flows and storage, shadow IT has the potential to violate regulations such as GDPR, HIPAA, PCI DSS, and others. As a result, when an employee enrols in a shadow IT application, data is stored in an undisclosed and unauthorized location. Data breaches, compliance violations, and fines can all result from a lack of security. This tarnishes the company’s brand image in the marketplace.

Lapsed subscriptions, redundant apps, and data silos are all consequences of shadow apps. Aside from the data security threats, it wastes resources because different departments would use different duplicate solutions.

How Can Sensitive Data Be Safeguarded?

Even if Shadow IT exists, companies can still take steps to limit the risks and emphasize SaaS Security inside their organization.

But they’ll need a few things in place in order to do so:


A major component of a SaaS security strategy is automation. Users make a lot of mistakes, but security teams can eliminate them using automation and improve SaaS security. Automated SaaS Management systems, for example, can detect when a user adds an unapproved app to their tech stack and notify them right away. This manner, IT can contain a rogue employee who is unaware of the dangers while maintaining data security.

Automation can also help automate security-related processes such as deprovisioning and offboarding.

Centralized Observability

It’s crucial to know what apps are added, but it’s even more important to know which apps are used by employees. By deprovisioning unused licences, the number of apps through which sensitive data is accessible will be reduced. As a result, ensuring that unused applications are removed is an important aspect of an efficient SaaS Security plan.

Nothing would be more aggravating than discovering a data breach as a result of an integration with a tool that is no longer in use. Centralized observability means being able to see all of the apps and their usage data in one place, allowing organizations to reduce waste and get rid of unwanted programs. This SaaS Security strategy decreases threat exposure while also saving money.

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