Shadow SaaS: Unseen Software Adoption Trends

Shadow SaaS, in which employees add SaaS applications without informing or asking for approval from their organizations, poses an increasing risk to businesses.

These Shadow Apps create a perfect situation for a data breach or exposure. Because employees are using apps that aren’t cleared by your security team, critical data may be exposed to third parties - while your business is kept completely in the dark.

Let’s break down the importance of understanding Shadow SaaS within cloud environments, how it can impact your business, and ways to protect your organization.

What is Shadow SaaS?

The term Shadow SaaS refers to when employees regularly use third-party apps connected to your company’s cloud, without the advance knowledge or permission of your IT or IS teams. 

Within a traditional SaaS environment, apps are strictly governed and vetted before implementation. There are defined policies around permissions and access within these solutions, and even other third-party connections made by these apps.

But with Shadow SaaS, your organization has no idea about the trustworthiness or security standards of the apps being utilized by your employees. Even worse, oftentimes these apps are granted permissions to access various resources within your organization.

The biggest issue with Shadow SaaS is that it leaves your company out of the loop regarding potential vulnerabilities and points where your data could be exposed

Without full, big-picture knowledge of all of the apps used by your employees, it’s impossible for your organization to create an effective SaaS security strategy to protect your assets and business-critical data.

Shadow SaaS: Risks and Challenges

There are a number of significant risks that come along with Shadow SaaS, including:

  • Security risks
  • Compliance risks
  • Data privacy and integrity threats
  • Integration challenges
  • Governance and control challenges

Security risks

IT and IS teams regularly screen third-party apps for trustworthiness, with the app’s policies around data protection and security thoroughly checked. Shadow Apps, however, have never been vetted by your organization, which means that they pose an inherent risk to your business. The use of Shadow Apps by employees creates vulnerabilities which your company is unable to defend against, as you’re not even aware that these data exposure points exist.

Compliance risks

By allowing Shadow Apps access to company data assets, a user may be violating legal safeguards around privacy in your jurisdiction or for your industry. An employee could therefore potentially render your company out of compliance with data protection regulations, simply by granting permissions to Shadow Apps. This issue is especially relevant for companies in highly regulated sectors such as finance and healthcare.

Data privacy and integrity threats

Users may click “allow” when Shadow Apps ask for permissions to connect to Google Drive or Microsoft OneDrive, without understanding the gravity of that decision. These apps may obtain full permissions to view all company assets to which the user has access. A random app could obtain viewing, editing, or even deletion permissions for company spreadsheets, slideshows, docs, and other resources that are shared with that employee, putting data privacy and integrity at risk.

Integration challenges

Because IT and IS teams aren’t aware of Shadow Apps or how they impact employees’ workflows, they aren’t taken into account during configuration or infrastructural changes within your organization. If a major change is made to your company’s systems, such as switching cloud providers, Shadow Apps can cause serious issues. Workflows or even critical operations can be disrupted because the transition plan didn’t allocate for the presence or reliance upon these unknown Shadow Apps.

Governance and control challenges

As part of a strong GRC strategy, companies need to know exactly where their data could be exposed and shared. Shadow Apps create a scenario in which your GRC team is unaware of crucial data exposures and vulnerabilities. Businesses can’t execute robust GRC protocols without full knowledge of all the permissions and access privileges granted to every app used by employees.

How Do Shadow Apps Impact Your Organization?

The presence of Shadow Apps can negatively impact your organization in several ways:

  • Increased IT complexity
  • Potential cost implications
  • Impact on data management
  • Implications for IT governance

Increased IT complexity

Shadow Apps form a parallel system of SaaS solutions being used by your employees. This in and of itself is inherently problematic, as it means your organization doesn’t have an accurate understanding of the solutions used regularly within the business.

Without a complete understanding of the apps used by employees on a daily basis, your IT teams can’t formulate effective policies or plan for transitions to new or alternative systems. 

Potential cost implications

Shadow SaaS can result in significant financial issues for your organization. If you’re found to be out of compliance with data protection regulations due to unvetted third-party apps, you could face stiff penalties that may even cost you millions of dollars. 

That’s not to mention that some third-party apps work on subscription models. Employees could theoretically be billing your organization for these apps, charging them as expenses, with your IT team none the wiser.

Impact on data management

Effective data management requires an in-depth understanding of all potential vulnerability and exposure points. With Shadow Apps in play, your teams can’t ensure the safety of all your sensitive data because they’re unaware of all the apps where it’s accessible.

Implications for IT governance

Key governance issues, like access policies and periodic permissions reviews, are impossible to manage when there’s Shadow Apps used by employees. Governance teams can’t conduct systematic analysis and review of permissions and access when there is data being shared within apps that aren’t on their radar.

Key Strategies and Best Practices for Managing Shadow SaaS

In order to minimize the presence of Shadow Apps within your business and/or reduce the threat that they pose, we suggest taking the following actions:

  • Establish a SaaS governance framework
  • Promote awareness and education
  • Encourage open communication
  • Implement Shadow SaaS monitoring and detection tools

Establish a SaaS governance framework

Create a clear framework that establishes and implements rules regarding SaaS app permissions and access. Include policies that designate what’s appropriate when it comes to third-party apps, such as banning the use or integration of solutions that haven’t been pre-screened by your organization.

Promote awareness and education

Employees are often unaware of the serious security ramifications of using Shadow Apps. Training your people on why it’s critical they only use apps vetted by your IT and IS teams can help decrease the risks of Shadow SaaS use. The most effective education is that which is integrated into the workflow, such as a message that pops up for a user trying to install an unapproved third-party app, explaining the problem and what they should do in the future.

Encourage open communication

Shaming or punishing employees who have installed apps without clearing them with your security team is the wrong move. Instead, focus on fostering a company culture in which employees who have installed Shadow SaaS - whether through ignorance or negligence - are encouraged to provide that information to your security and IT teams, without fear of reprisals. 

Implement Shadow SaaS monitoring and detection tools

Staying on top of Shadow SaaS is a challenge; by their very nature, your IT and IS teams are unaware of the presence of these apps. Manually monitoring your SaaS environment to pick out apps that shouldn’t be there is impractical, if not impossible. 

Look for automated solutions that can stay on top of what’s going on with your third-party SaaS apps. Such a solution should be able to automatically detect the installation and use of unapproved apps by employees. It should be able to send notifications and alerts to your IT and IS teams. 

Ideally, a SaaS Security Platform should be able to not only detect and alert, but to remediate any Shadow SaaS problem with an automated workflow. Finding the right Shadow SaaS management solution is key for keeping your sensitive information safe and secure.

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