Shadow IT: The hidden threat growing inside your business

When you think of cybersecurity risks, you probably picture hackers, phishing scams, or dodgy links. But what if one of the biggest risks to your business isn’t coming from outside - it’s coming from within?

Welcome to the world of Shadow IT - the apps, software, and tools your team uses without the knowledge or approval of your IT department. A quick download here, a trial subscription there, and before you know it entire teams are running on apps and services the IT department has never signed off. This is shadow IT, and while it might seem harmless on the surface, it introduces risks that are particularly pressing for small and medium-sized enterprises, (SMEs), where teams often wear multiple hats and move fast.

What Is Shadow IT?

Shadow IT is any technology used within a business that hasn’t been officially approved or managed by the company’s IT team.

That might sound harmless - after all, who hasn’t used a quick app to share a file or schedule a meeting? But these unapproved tools create blind spots that can lead to data breaches, compliance violations, and unnecessary costs.

Common Security Issues Caused by Unauthorised Software

When staff use apps that aren’t vetted or monitored, it opens the door to:

• Data leaks – files shared through personal accounts can end up in the wrong hands.

• Unpatched vulnerabilities – many consumer apps aren’t updated for business-grade security.

• Access control gaps – sensitive company data can remain accessible even after employees leave.

• Inconsistent backups – IT teams can’t protect or restore data they don’t know exists.

For SMEs with limited resources, even one incident can have a big impact - financially and reputationally.

The Hidden Cost and Compliance Risk of Shadow IT

Shadow IT isn’t just a security problem - it’s a compliance nightmare waiting to happen.

When data is stored across multiple unsanctioned apps, you lose control over where it lives, how it’s protected, and who can access it.

That can quickly put your business at risk of breaching data protection laws like GDPR, especially if customer information is involved.

And then there’s the financial side: duplicate software subscriptions, inefficient processes, and lost productivity all add up - quietly draining your budget in the background.

Everyday Examples of Shadow IT

You’ve probably seen it - or done it yourself:

• Using personal Google Drive to share work documents.

• Storing passwords in Notes or Excel instead of a secure password manager.

• Chatting with clients on WhatsApp rather than official channels.

• Running a quick campaign using Canva or Mailchimp instead of company-approved tools.

Each one might seem small on its own and not meant with malicious intent - infact most are borne from a desire to work faster and more efficiency. But together they create a patchwork of unmanaged technology that’s hard to secure.

Best Practices for Visibility and Security Governance

The key to tackling shadow IT isn’t punishment - it’s visibility. Start by identifying what’s already in use, where your data is going, and why employees are turning to outside tools in the first place.

From there:

• Use network monitoring to detect unknown applications.

• Create clear software approval processes that don’t slow people down.

• Develop clear policies around bring your own device (BYOD), third party app use and cloud service approval

• Offer secure, easy-to-use alternatives to popular apps.

• Provide regular staff training to keep everyone informed and aware.

When people understand why certain rules exist, they’re far more likely to follow them.

Building Trust and Culture to Reduce Shadow IT Growth

Shadow IT thrives in environments where employees feel official tools are slow or obstructive, it often starts with good intentions - employees just trying to get things done. That’s why solving it isn’t just about technology, it’s about culture.

Encourage open conversations about tools and productivity. Make it clear that your IT team isn’t there to say “no,” but to help find safe, efficient ways to work.

When staff feel trusted and heard, they’re less likely to go rogue with unapproved solutions.

The Role of Regulatory Guidance in Shadow IT

Regulators like the ICO and industry-specific bodies are becoming increasingly focused on digital accountability. Businesses of all sizes are expected to show that they’re taking active steps to manage risk - including the risk created by shadow IT.

Staying informed on guidance and aligning with frameworks like Cyber Essentials or ISO 27001 can help you demonstrate compliance and protect your reputation.

Partnering with Delta 365

At Delta 365, we understand that managing shadow IT isn’t just a technical challenge - it’s a cultural one.

We help SMEs take control by:

• Identifying hidden risks across your networks and cloud platforms.

• Developing policies and best practices that are easy to follow.

• Training teams so they understand the ‘why’ behind IT security.

• Integrating secure, user-friendly tools that actually make work easier, not harder.

Our goal is simple: to help your business stay secure, compliant, and productive - without slowing you down.

Shadow IT may be invisible, but its risks aren’t.

By understanding where it hides and why it happens, SMEs can turn a potential vulnerability into an opportunity to strengthen their systems, culture, and collaboration.

And with the right partner by your side, keeping your business secure doesn’t have to be complicated.

👉 Talk to Delta 365 today about assessing your IT landscape and uncovering the unseen risks in your business.