The deadline is looming, so an employee quickly uploads confidential company data to ChatGPT to have a draft contract reviewed. What seems so harmless is actually part of shadow IT – the unofficial use of IT tools without the knowledge or approval of the IT department. This article shows what shadow IT risks exist for companies and how you can maintain control over your IT infrastructure with clear guidelines, training and secure alternatives.
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What is shadow IT?
Shadow IT (also known as shadow computing – see syteca.com) refers to all IT systems, software, applications or cloud services that are used in a company without the knowledge or approval of the IT department. This includes, for example, privately installed software on company computers, unauthorised use of cloud storage such as Google Drive or Dropbox, personal messengers for professional communication and, increasingly, AI tools such as ChatGPT. Anything that is used outside the official IT guidelines falls under shadow IT.
Why do employees use shadow IT?
Often because official solutions are lacking, too complicated or too slow. Employees want to do their jobs efficiently and look for a quick solution – be it an app that is immediately available or a cloud service without a lengthy approval process. Studies show that 38% of employees resort to unauthorised tools when IT approval takes too long. In addition, 61% are dissatisfied with the applications provided and consider them to be faulty or poorly integrated. In the home office in particular, 65% of employees use unauthorised tools.
In short, the use of unauthorised solutions is usually for practical reasons, not out of malice.
But as understandable as the desire for quick solutions is, the security risks and consequences for the company are serious.
The most common shadow IT risks for companies
Uncontrolled IT systems pose a serious threat to companies. IT security and compliance can be significantly compromised by shadow IT. Here is an overview of the biggest risks:
Data loss and data protection violations:
Shadow IT circumvents official security measures. Sensitive company data can end up in uncontrolled applications or cloud servers where there is no GDPR-compliant protection. If confidential data is uploaded to an unauthorised cloud tool, for example, this can be considered a violation of data protection guidelines – and important know-how bypasses the central IT department. Company knowledge suddenly resides in private tools instead of in the official knowledge management system. Almost every second cyber attack is related to shadow IT.
Security gaps and cyber attacks:
Software or devices from shadow IT are often not maintained by the IT team. Updates, security patches and monitoring are lacking. This easily leads to security gaps. Hackers exploit such hidden vulnerabilities to gain access to the company network. For example, an employee connects a private, unprotected device to the company Wi-Fi network – cybercriminals could hijack this device and use it as a gateway. Every unauthorised application increases the company’s attack surface.
Loss of control & hidden costs:
With shadow IT, the IT department has no visibility of all the IT systems and devices in use. It can neither provide support nor close vulnerabilities – blind spots arise. In addition, there is a lack of overview and support, which can lead to inefficient costs. Gartner Studies estimates that 30–40% of IT spending in large companies bypasses IT.
Compliance and legal risks:
Companies are obliged to control the use of IT systems and make them secure (e.g. in accordance with ISO 27001 or internal company guidelines). Shadow IT undermines these requirements. During audits or certifications, unauthorised tools can lead to standards not being met. Violating regulations such as the GDPR or industry-specific laws (e.g. regarding personal data) can have serious legal consequences.
According to a security study, 85% of companies had at least one security incident in two years, and in 11% of cases, shadow IT risks were the cause. Those responsible therefore risk real damage: from fines and loss of certification to damage to their reputation.
Practical example – when shadow IT becomes a nightmare
Even large corporations are not spared. In April 2023, Samsung suffered a serious data leak: engineers had entered confidential source code and internal meeting notes into ChatGPT to get help with error analysis – and unwittingly disclosed internal company secrets to the outside world.
As a result, Samsung completely banned the use of ChatGPT within the company.
This shadow IT example shows how real the danger is – confidential knowledge falls into the wrong hands and security barriers are circumvented.
Strategies: How companies can curb shadow IT
The good news is that companies are not helplessly at the mercy of the shadow IT phenomenon.
It is important to take a proactive approach that focuses on control, education and appropriate solutions rather than simply imposing bans.
Here are three approaches you can take to tackle the shadow IT problem:
Clear guidelines & awareness
A clear company policy on IT use forms a solid foundation. Define which types of applications and cloud services are permitted and how new tools can be approved. A policy specifically for AI use (e.g. generative AI à la ChatGPT) should regulate which data must never be entered externally. Communicate these rules clearly and regularly.
Equally important: training and education for employees. Use practical examples to raise awareness of the dangers of shadow IT – and how each individual can contribute to protecting company data. When employees understand that quickly uploading a file to an unknown web service can, in the worst case, lead to data loss or fines, they act more cautiously. A culture of open communication also helps: employees should feel confident giving feedback to IT expertsif official tools do not meet their needs.
Monitoring & control of the IT environment
Companies should also take technical countermeasures: Modern security tools can detect shadow IT activities – such as CASB (Cloud Access Security Broker) solutions or DNS filters such as Cisco Umbrella, which detect unauthorised access to external cloud services. In addition, regular IT audits and SaaS management tools help to track down hidden IT assets and restore transparency. It is important to also consider shadow IT in risk assessments. Inventory and monitoring solutions provide the IT team with an overview of which apps and devices are in use. This allows you to regain control over your IT infrastructure.
Offer secure alternatives
The most important step: offer employees attractive, tested alternatives to meet their needs. Shadow IT usually arises from a lack of better options – this gap must be closed. For example, if many employees use Dropbox or private Google Drive accounts even though this is prohibited, an internal cloud storage solution or a secure file-sharing tool should be provided.
The same applies to the hot topic of AI: instead of using ChatGPT in secret, companies should open up legal channels for using AI technology productively and in compliance with data protection regulations. This may mean hosting their own AI instance or commissioning a trusted service provider. There are three common approaches:
- Develop your own solutions: Companies with extensive development resources can try to build their own AI applications or data platforms. The advantage is full control over functions and data. The disadvantages are high costs, limited scalability and the difficulty of keeping pace with rapid AI development.
- Use integrated solutions: Large providers such as Microsoft or Google integrate AI (e.g. Microsoft 365 Copilot) directly into their ecosystems. This works smoothly within this environment and can reduce shadow IT, but external data sources (file servers, other systems such as your DMS or intranet) are often not taken into account.
- Use an independent AI platform: Specialised third-party platforms can be integrated into the existing IT infrastructure and are usually more flexible. They can connect to a wide variety of data sources and are subject to the company’s security standards. One example of this is amberSearch. Such solutions combine the best of both worlds: they provide employees with a powerful tool and adhere strictly to central security guidelines.
It is important that the alternative introduced is truly convincing in terms of user-friendliness and functionality. Only if the IT team provides an official tool that meets the needs of the workforce will employees stop going their own way. An IT expert summed it up: Employees today use AI as a matter of course – from meeting memos to code design. If the officially provided solutions are too restrictive or cumbersome, ‘they just use whatever is available in the browser.’ The task of IT is therefore not to slow down innovation, but to enable it safely.
amberSearch as a secure AI platform
A modern solution for preventing shadow IT, especially in the areas of knowledge management and AI use, is amberSearch. This is an enterprise-wide AI and search platform that offers exactly what employees often seek via shadow IT, but under the complete control of the IT department.
What is amberSearch?
In short, it is AI-powered search and assistance for all internal data. amberSearch connects to your existing data sources (from network drives to SharePoint, OneDrive, emails and the intranet) and enables employees to quickly find the right information with AI support without data leaving the protected corporate environment. The platform uses AI language models, but is tailored to your environment. This means you retain control over your company data while still benefiting from efficient information retrieval.
Data protection and security:
amberSearch is hosted as standard in German data centres (Open Telekom Cloud) that are ISO 27001 certified, ensuring full data sovereignty. The solution follows the principle of data minimisation: no personal data is processed and no copies of your documents are created. amberSearch takes over existing access rights (via single sign-on/Active Directory) instead of creating new user accounts. This means that the platform fits seamlessly into your existing security guidelines and meets the highest compliance requirements (GDPR, ISO 27001). Shadow IT risks are significantly reduced as nothing leaves the company uncontrolled.
Productivity instead of shadow IT:
By providing employees with a centralised, shared tool, amberSearch actively prevents shadow IT. Users no longer have to search for external apps themselves, as they have a convenient system at their fingertips. amberSearch integrates seamlessly into Outlook or Microsoft Teams, for example, so that employees can use AI functions directly in their familiar working environment. The IT team still has an overview of which systems are connected and how data flows. The platform scales with your company and processes even huge amounts of data with high performance. This enables employees to find information faster, avoid duplication of work and make more informed decisions.
Does amberSearch work in any IT landscape?
amberSearch unfolds its full benefits when knowledge is spread across many sources and employees resort to unsafe tools due to a lack of alternatives. Of course, amberSearch does not replace traditional security tools such as firewalls or DLP, and in very homogeneous software environments with existing AI tools, the added value may be lower. However, in most organisations with heterogeneous IT infrastructure, amberSearch closes a critical gap and enables teams to use state-of-the-art AI tools without falling into the trap of shadow IT.
Conclusion: Shadow IT is a warning sign
Employees need the right tools to do their jobs. Instead of simply banning unofficial tools, companies should tackle the root causes. The risks – from security incidents and data leaks to compliance issues – are too high to ignore shadow IT.
The good news is that with clear rules, open communication and the right technical solution, the problem can be brought under control. By strengthening IT security on the one hand and providing employees with modern, secure tools on the other, you can turn shadow IT from a risk into an opportunity.
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