Software as a Service (SaaS) has become a staple in the modern workplace. With the new last mile of the office network, businesses have had to adapt to a hybrid work-from-home model, making SaaS apps more critical than ever. In fact, Gartner predicts that the SaaS industry as a whole will see 16.8% growth in 2023.
Businesses are adopting SaaS in growing numbers, and for many reasons. Chief among them is convenience and accessibility. SaaS solutions can be accessed from anywhere with an internet connection, making it easy for remote employees to collaborate and access the tools they need to do their jobs. Additionally, SaaS apps are—from an admin perspective—typically pretty easy to set up and use, reducing the burden on IT departments.
The reality of Shadow IT
Many businesses are unaware of the dangers of the network blindspots like “Shadow IT”: software and services used by employees that the IT department has not approved. This can have significant consequences for a business, including costs, operational issues, and security risks. According to G2, 20%-40% of IT spending is now considered Shadow IT.
The Hidden Dangers
Shadow IT has the potential to significantly impact critical areas of your business, including budgets, operations, and security. While different business leaders often govern all three, they all have the same outcome: costs to the company. There’s an irony here—organizations institute SaaS apps to solve business problems, but may actually find themselves creating new issues—due to rapid SaaS adoption without a centralized SaaS discovery management solution.
Let’s look at how Shadow IT can affect these three major business areas.
SaaS Discovery Management vs. Shadow IT: Costs
Shadow IT can result in unnecessary spending as employees may be subscribing to paid services that duplicate existing solutions within the company. It also means that the company may be paying for more licenses or services than they need. Venture Beat projects that nearly 33% of SaaS application expenditures incurred by a company are waste.
Employees may also be using free SaaS services, making it even harder to track down Shadow IT—as it won’t show up on the books. These applications can range from third-party SaaS portals, file transfer solutions, and government portals, to procurement portals. While they don’t impact the bottom line, all of these applications house sensitive company data and are often missed when evaluating Shadow IT risks.
SaaS Discovery Management vs. Shadow IT: Operations
Operational issues can arise when different departments use different SaaS solutions. Different departments may use different SaaS solutions for the same tasks, leading to confusion and hindering collaboration. No centralized app discovery tools can lead to compatibility problems and disruptions to business operations. The results? More wasted time and resources as employees struggle to work together effectively.
Every SaaS application houses critical business data. When reviewing Shadow IT, you should consider what data is in the solution and if it’s consistent across your entire stack. Operationally, it’s essential to consider how data flows from your core SaaS solutions, like your CRM or ERP platforms, downstream to your other SaaS applications. If teams are leaning on Shadow IT, essentially making copies of these data sets in new SaaS, managing it becomes even more challenging and risky.
SaaS Discovery Management vs. Shadow IT: Security
Security is an obvious concern when it comes to Shadow IT. Approved software goes through a rigorous review process to ensure that it meets the company’s security standards. However, with Shadow IT, there’s no guarantee that the software used by employees meets these standards. This leaves the company vulnerable to data breaches and other security risks.
As well, how teams access these Shadow IT applications should be reviewed. A compliant organization may have requirements for access, such as Multi-Factor Authentication (MFA), Single-Sign-On (SSO), and individual accounts. It’s much more likely that non-centralized Shadow IT access is not following organizational requirements and could put the business’s insurance or compliance at risk. This also opens a can of worms for off-boarding key employees who may be out of compliance.
With the increasing reliance on SaaS solutions in the hybrid work-from-home world, businesses need to be more aware of the dangers of Shadow IT. By discovering and managing SaaS applications, businesses can avoid unnecessary costs, operational issues, and security risks.
The solution to the Shadow IT problem is SaaS Discovery Management. Launching on March 1st, 2023, Auvik SaaS Management makes it easy for businesses to discover, manage, and secure their SaaS applications, eliminating the risks associated with Shadow IT. Conquer SaaS sprawl with centralized SaaS visibility—no matter where your users are, using Auvik SaaS Management.