In 20 years as an IT business owner, I have usually recommended that my small business and...
The Dangers of Shadow IT
Modern SaaS apps allow even non-technical people to purchase, download, install and configure fully operating versions of useful software without ever needing to bother IT or others typically involved in the procurement process.
Seamlessly, an employee can have one of the estimated 25,000 apps in the Cloud up and running in minutes, thereby saving all kinds of time for overworked IT personnel.
Sounds like a win-win, right?
As it turns out, such "Shadow IT", or IT installations that the IT Department and management don't know about, can make life more difficult on IT workers and Procurement, HR and Finance staff.
Instead of a planned implementation in which all impacted parties coordinate on the decision, this decentralization of the procurement and implementation processes sets off a chain reaction up and down an organization.
When employees go rogue with the installation of apps that fall under cost levels that require higher-up approval, the eventual disruption can be chaotic.
Those impacts came out in a study of 300 corporate executives by Torii -- a Distributed SaaS Management platform provider -- on the use of Shadow IT in an organization.
The study found the following issues when rogue apps are deployed:
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Employees waste time searching for solutions that the company already has
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The company's data and information become siloed within those apps
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IT personnel wastes time searching for apps they discovered in their audits
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Security and Compliance teams must determine the apps' security and compliance with policy and regulations
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Invoice renewal notices confuse and catch financial personnel off-guard
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The Finance department doesn't know to include the apps in budgeting and forecasting
In that same study, regarding rogue apps ...
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62 percent said they make it more difficult for departments to collaborate
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60 percent said they make it more difficult to identify the apps the company uses
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50 percent said the unknown expenditures make it more difficult to manage spending and contract renewals
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32 percent said revoking access privileges for departing employees becomes more difficult with unapproved apps
Make it clear to your employees that you welcome their suggestions for SaaS solutions that can make their work easier and help the company function more efficiently.
But make it policy that every SaaS app must undergo a Vendor Risk Assessment before implementation to ensure a good working relationship with the SaaS vendor. You want to avoid joining the 52 percent of small business owners who expressed regret in a recent SaaS purchase (AppDirect study, 2021).
To learn how a Vendor Risk Assessment can smooth the SaaS selection process, contact me at 302-537-4198, ericm@edminfopro.com or our Contact form.
You can also download a copy of our FREE e-Book, "Find Your Cloud 9's", to learn more about what's involved in properly performing such assessments, or request an online meeting.
