Shadow SaaS: The Nightmare of Every IT Department

Peter Tsempelis
Jun 27, 2024By Peter Tsempelis

Understanding Shadow SaaS

In today's fast-paced business environment, the rise of software-as-a Service (SaaS) applications has revolutionized how organizations operate. These tools offer unprecedented convenience, flexibility, and scalability, empowering employees to perform tasks more efficiently. However, this transformation has also given rise to a significant and often overlooked security challenge: Shadow SaaS.

What is Shadow SaaS?

Shadow SaaS refers to the situation where employees use SaaS applications without the explicit approval, knowledge, or oversight of their organization's IT department. This unauthorized usage typically stems from the need to fill functional gaps quickly or to enhance productivity with tools that are not officially sanctioned by the company.

Coding software developer work with augmented reality dashboard computer icons  with responsive cybersecurity.Businessman hand working.

Reasons Behind the Emergence of Shadow SaaS

Ease of Access: SaaS solutions are widely accessible, often offering free trials or freemium models that make it easy for employees to start using them without upfront costs or lengthy approval processes.

Immediate Needs: Employees may encounter urgent requirements that cannot be met quickly enough by the tools provided by their organization. Turning to readily available SaaS solutions can be a quick fix to pressing problems.

Innovation and Flexibility: Some employees may find that certain SaaS tools offer more innovative features or better flexibility compared to the company’s sanctioned applications, driving them to adopt these tools independently.

Lack of Awareness: In some cases, employees may simply be unaware of the risks associated with using unsanctioned software, or they might not know the proper channels to request new tools.

The Impact of Shadow SaaS on Organizations

While Shadow SaaS might appear beneficial on the surface, it poses significant risks to organizations, particularly from a cybersecurity standpoint:

Male hacker thinking about the problem of hacking or malware infection on the background of screens with codes in neon light. The concept of cybersecurity

Data Security Risks: Without IT oversight, these applications might not adhere to the organization's security protocols, increasing the risk of data breaches, leaks, and unauthorized access.

Compliance Issues: The use of unauthorized SaaS solutions can lead to non-compliance with industry regulations and internal policies, potentially resulting in legal and financial repercussions

Integration Challenges: Shadow SaaS tools often do not integrate seamlessly with existing systems, leading to data silos, inefficiencies, and potential disruptions in workflow.

Hidden Costs: Although individual SaaS applications might seem cost-effective, the lack of centralized management can lead to redundant subscriptions and unexpected expenses.

Security Vulnerabilities

Unapproved SaaS might inadvertently expose sensitive data to unauthorized parties.

Moreover, IT departments may not be aware of these tools, making it difficult to monitor and secure them. This lack of oversight can lead to significant security gaps.

Compliance Issues

Many industries have strict regulations regarding data protection and privacy. Using unauthorized software can result in non-compliance with these regulations. This can lead to legal penalties and damage to the organization's reputation.

Man on a virtual interface presses compliant cogwheel button. COMPLIANCE, REGULATIONS, STANDARDS, POLICIES and RULES.

To avoid these issues, ensure that all software used complies with relevant regulations. This requires a proactive approach to identifying and managing Shadow SaaS.

Managing Shadow SaaS: A Proactive Approach

Shadow SaaS, the use of unauthorized SaaS applications by employees, poses significant cybersecurity risks to organizations. To manage and mitigate these risks effectively, businesses must adopt a modern, automated approach. Our solution is designed to address these challenges efficiently and comprehensively.

The Inefficiency of the Old-Fashioned Way

Traditionally, organizations have relied on manual processes to manage SaaS applications and ensure compliance. This old-fashioned approach includes:

Manual Audits: Conducting periodic manual audits to identify unauthorized SaaS usage.

Spreadsheets and Lists: Maintaining spreadsheets and lists of approved applications, which are often outdated and incomplete.

Employee Surveys: Relying on employee surveys and self-reporting to track SaaS usage.

Reactive Responses: Responding reactively to security incidents after they occur, rather than proactively preventing them.

While these methods can provide some level of oversight, they are labor-intensive, time-consuming, and prone to errors. They often fail to keep up with the rapid pace at which new SaaS applications are adopted within organizations, leading to significant blind spots and security vulnerabilities.

Why the Old-Fashioned Way is Ineffective

Lack of Real-Time Visibility: Manual processes cannot provide real-time visibility into SaaS usage, leaving organizations unaware of emerging risks.

Resource-Intensive: Manual audits and tracking are resource-intensive, diverting valuable time and effort from other critical IT and security tasks.

Inconsistent Data: Spreadsheets and lists are often incomplete or outdated, resulting in inaccurate data and ineffective decision-making.

Delayed Responses: Without real-time monitoring, organizations can only react to security incidents after they occur, rather than preventing them proactively.

Tackling Shadow SaaS: A Proactive Approach

Our approach automates many aspects of managing Shadow SaaS, ensuring more efficient and effective measures:

Digital composite of Businesswoman holding laptop with cloud apps icons in blue motion public space

Monitoring and Auditing:

Automatic Detection: Our solution continuously monitors network traffic and employee activity, automatically detecting unauthorized SaaS applications.

Real-Time Alerts: It provides real-time alerts when new SaaS applications are identified, allowing IT departments to respond quickly to potential security risks.

Usage Reports: Detailed usage reports offer insights into which applications are being used, how frequently, and by whom.

Centralized Management:

SaaS Inventory: Our solution maintains a comprehensive inventory of all SaaS applications used within the organization, providing a centralized view for effective management.

Integration Tracking: The platform tracks the integration status of each SaaS application, ensuring alignment with existing systems and workflows.

Compliance Monitoring: It checks SaaS applications for compliance with industry regulations and internal policies, automatically flagging non-compliant tools.

Policy Enforcement:

Automated Policy Implementation: Our solution enforces security policies across all detected SaaS applications, ensuring only compliant tools are used.

Access Control: It manages access controls, automatically restricting access to unauthorized or non-compliant SaaS applications.

Approval Processes:

Streamlined Approval Workflow: Employees can request approval for new SaaS applications through our solution, with IT reviewing and approving or denying requests based on predefined criteria.

Security Assessments: Automated security assessments are performed before approving any SaaS application to ensure they meet the organization’s standards.

Employee Education:

Automated Training Modules: Our solution offers automated training modules and educational resources to inform employees about the risks and implications of using unauthorized SaaS tools.

In-App Notifications: It provides in-app notifications and reminders about best practices for SaaS usage and compliance with company policies.

Conclusion

Our approach automates the management of Shadow SaaS, providing real-time visibility, centralized control, automated policy enforcement, streamlined approval processes, and comprehensive employee education. By adopting our modern, proactive approach, organizations can effectively control SaaS usage and mitigate the cybersecurity risks associated with Shadow SaaS.

Get your Complimentary Executive Cybersecurity Assessment