What is Shadow Application? Defined and Explained

What is Shadow IT?

Shadow IT refers to IT purchases made without the involvement or awareness of an organization’s IT department. The purchases can be made by individual employees or by departments acting silos. Types of shadow IT are:

• Hardware: hard disks, USB memory sticks, servers, PCs, laptops, and smart devices
• Out-of-the-box software solutions
• Cloud services: SaaS, IaaS, and PaaS

Shadow Applications: Unilateral Employee Software Purchases

Cloud services and SaaS are the most common form of shadow IT. As cloud services become more available, employees buy tools and applications for improving productivity and collaboration. It’s fast, it’s available. All that’s needed are credit card details. And while some purchases are made with personal credit cards, most employees use their department’s expense budget. But even free shadow applications pose a threat to companies.

Applications like Dropbox and Google Docs offer free subscriptions, so they seem harmless. But IT is unaware of these cloud accounts, and not managed in terms of safety and security.

Why Do You Need SaaS Management?

Risks of Shadow Applications and Shadow SaaS

IT departments exist for a reason. Any element introduced into an organization’s technology landscape without the knowledge of the IT department poses several threats.

IT-related purchases must be made after careful evaluation. The product’s technical integrity and its position in the company’s Enterprise Architecture are vital. When employees make purchasing decisions, it’s usually based on convenience. Few thoughts are given to security, compliance, or licensing agreements. Which is why shadow IT leads to security gaps, ads complexity to the ecosystem, and elevates IT costs.

Safety and Security Risks

Shadow applications limit the IT department’s visibility. When they’re unaware of a new introduction into the company’s tech ecosystem, subpar software goes unnoticed.

Applications with low technical integrity or limited source code availability affect the entire IT landscape. Applications with storage and file sharing functionalities pose an even bigger threat, especially to organizations that have sensitive data. Security breaches on confidential data, like customer data or trade secrets, can lead to severe judicial consequences and loss of credibility.

Increased IT Complexity

Purchasing decisions made in silos can result in duplicate technology. Different parties buy applications without noticing that its duplicate was previously bought. While having a single license and increasing the number of users is the sensible choice—both in terms of IT complexity and licensing costs—lack of communication among parties leads to multiple licenses of the same product.

Similarly, different departments often buy several different applications for the same purpose. They have similar application features, but serve different business domains or branches. This lack of standardization leads to disparate systems within the organization. Which can lead to incompatibility of file types and collaboration problems.

Higher IT Costs

Shadow applications always lead to higher costs. We mentioned duplicate and redundant applications— which is a different way of saying unnecessary licenses. This increases IT costs in two ways: more licensing fees and higher operational expenses.

Another strain on company resources is forgotten applications. Most companies still pay monthly subscription fees for inactive users, former employees, and idle software services.

Application Portfolio Management for Preventing Shadow Software

Prevent shadow software by implementing Application Portfolio Management. Application Portfolio Management (APM) is the practice of identifying, assessing, and rightsizing software use across an organization. It’s a systematic approach to eliminating duplicate technology, simplifying your Enterprise Architecture, and cutting unnecessary IT costs.

Beyond taking inventory, APM promotes the continuous inspection and optimization of your company’s software assets. A successful APM strategy provides several benefits: minimized IT risk, enhanced productivity for daily activities, and cost savings that you can reinvest in your business.

Take Control of Your Software Inventory with Loggle

A great way to apply APM is by using Loggle. Loggle is a cloud and on-premise-based Application Portfolio Management tool that helps oversee all your software assets. By conducting a software audit and logging each application into Loggle, you’ll have a comprehensive inventory of your IT landscape. Loggle helps you detect duplicate technology and eliminate redundant applications. It provides a basis for evaluating the quality and business value of your software. How effective are your applications in helping you reach business objectives? What impact do they have over your Enterprise Architecture? Loggle prevents shadow applications and helps optimize how your business uses IT. Schedule a free demo and we’ll show you how Loggle can:

• Prevent shadow applications and shadow SaaS
• Identify duplicate and redundant technology
• Simplify license management
• Minimize threats to your IT ecosystem
• Cut down costs and promote healthier budget planning

Subscribing to SaaS and buying cloud software is easier than ever. But this convenience comes with risks. Employees feel comfortable buying and downloading applications to enhance productivity and simplify daily activities. But doing so without considering its ramifications cost companies more than licensing fees. Strong governance over IT assets is crucial. With Application Portfolio Management, you can rightsize your software applications by eliminating redundancies. Contact us now to learn how Loggle can help.

How the Software Makes IT Asset Management More Systematic?