The Convergence of Shadow IT & Software License Management

The Convergence of Shadow IT and Software License Management

The rise of Shadow IT has been propelled by the consumerization of information technology, where users increasingly download and utilize unofficial applications and services to aid their work. In industries that rely heavily on engineering and specialized applications, this includes the use of cracked software and outdated apps that have been retired from the license portfolios. This growing comfort with technology has led to a surge in the unauthorized use of unapproved software and applications within enterprises.

The effective management of software licenses is now recognized as a key strategy in mitigating the risks associated with shadow IT. This approach ensures not only compliance but also enhances the overall security posture of the organization in the face of these evolving IT trends.

What is Shadow IT?

Shadow IT refers to the practice of using hardware, software, or any IT resource within an enterprise without the explicit approval or knowledge of the organization’s IT department. This phenomenon has become increasingly common in modern workplaces, as employees often seek out tools and applications that they find more user-friendly or efficient than those officially sanctioned by their company.

Examples of shadow IT are varied and can include relatively benign activities like using Google Drive for collaboration instead of an organizationally approved tool like Slack, or communicating via Skype when the official channel designated by management is Microsoft Teams.

7 Major Drivers of Shadow IT

A staggering 52% of businesses identifies Shadow IT as a significant issue impacting their operations. Furthermore, unauthorized software and SaaS (Software as a Service) applications are estimated to consume a substantial 30-40% of a company’s IT budget. This substantial expenditure is often attributed to the quick and easy acquisition and deployment of shadow applications, avoiding the usual procurement processes.

To effectively mitigate and manage Shadow IT, it is crucial for organizations to delve into the root causes of why it occurs in the first place.

1. Enhanced Productivity and Efficiency

Shadow IT often emerges because employees and even senior managers seek more efficient or user-friendly tools than those provided by their organization. Workers often prioritize immediate productivity gains over potential long-term risks, especially if these tools seem to improve performance or streamline processes.

2. Cost Reduction

In some cases, using unauthorized software or services can be seen as a cost-saving measure, especially if it avoids the lengthy and often expensive procurement processes associated with official IT channels.

3. Bypassing Bureaucracy and Delays

Shadow IT can emerge as a response to the slow and cumbersome processes of traditional IT departments. Senior managers might support or turn a blind eye to Shadow IT practices to avoid bureaucratic delays, especially in high-pressure situations where time is a majorfactor.

4. Employee Satisfaction and Autonomy

Allowing employees to choose their tools can boost morale and job satisfaction. Employers may believe that by giving their teams the freedom to select their software, they are empowering them and fostering a more dynamic and innovative work environment.

5. Lack of Awareness

Sometimes, employers, even at senior levels, may not fully understand the potential risks associated with Shadow IT, such as security vulnerabilities, data breaches, and non-compliance issues. This lack of awareness can lead to a more permissive attitude towards these practices.6.

6. Inadequate IT Resources

In organizations where the IT department is under-resourced or lacks expertise in newer technologies, employees and even senior managers might find Shadow IT a necessary means to fill the gaps in IT capabilities and meet specific departmental needs.

7. Meeting Specific Needs

Certain specialized tasks or projects may require niche or advanced tools that are not part of the standard IT offering. In such cases, employers might resort to or endorse Shadow IT solutions that specifically cater to these unique requirements.

Shadow Engineering Apps: Rare but It Happens

Industries with vast engineering license portfolios such as manufacturing, energy, construction, aerospace, and defense, usually enforce strict policies regarding software usage. Despite this, instances of shadow IT can occur, even among engineers:

  1. The use of cracked software, which are not only unauthorized but can also be illegal.
  2. The utilization of outdated software versions that have been officially phased out by the organization’s IT department.

In both scenarios, the use of software becomes unauthorized, posing significant risks.

If organizations in these sectors fail to mitigate shadow engineering apps, the consequences can be significant. These include losing control over IT assets, heightened security risks due to the use of vulnerable and unsecured applications, misconfigurations, infringements of licensing agreements, and compliance issues.

The unauthorized use of engineering software poses a threat not just to the integrity of IT systems but also to the legal and operational framework of the organization.

Software License Management vs. Shadow Engineering Software

Software license management plays a crucial role in strategizing against shadow engineering apps. Although these solutions might not directly detect unauthorized applications, they can identify potential shadow IT scenarios by analyzing discrepancies between different data sets. This process often involves sophisticated data analysis, which might require the expertise of external specialists, to effectively locate and address shadow applications.

Software license management solution providers, such as Open iT, offer comprehensive oversight by monitoring software usage at both the license manager and workstation levels. This dual-level visibility allows organizations to detect usage patterns, user behaviors, and other vital metrics related to software license utilization.

Such detailed monitoring is instrumental in identifying and mitigating potential shadow IT instances, ensuring that all software in use is authorized, up-to-date, and compliant with licensing agreements; thus, maintaining the integrity and security of IT operations.

Mitigate Shadow IT with Software License Management

Enhanced Oversight: Improved visibility enables the identification and analysis of utilization trends. This helps organizations understand how various software applications are being used and optimize these tools for maximum value.

Policy Development and Enforcement: Establishing and enforcing clear policies around software usage and procurement can curtail the growth of Shadow IT. These policies need to be supported by strong software license management practices to ensure adherence and legal compliance.

Regular Audits and Compliance Checks: Conducting systematic audits and compliance checks helps in preventing unauthorized software usage. Audits empower organizations to encourage the use of authorized licenses across the enterprise.

Provision of Suitable Tools: To prevent employees from resorting to Shadow IT, organizations must ensure the availability of adequate and officially sanctioned software tools that meet their needs.

Addressing Shadow IT Through Improved User Experience

Organizations must acknowledge that the risks of shadow IT, especially in terms of security, compliance, and data integrity, typically dwarf its perceived benefits. Often, shadow IT arises from employee frustration with official applications. To counter this, it’s crucial for organizations to select applications that align with their goals and enhance user experiences and efficiency.

Struggling with software license utilization and the challenges of shadow IT? Our team of experts offers professional services to simplify these issues. We provide solutions for effective software license management and strategies to mitigate shadow IT.

Contact us to secure a more compliant, efficient IT environment for your organization.

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