How can IT teams work to manage the growth of unmanaged and shadow apps better? Jody Shapiro, CEO and co-founder of Productiv, shares key insights into the risks that shadow IT needs to deal with and how these challenges can be mitigated to enable productivity and innovation.
Most people don’t like walking down a dimly lit street because of what risks might be lurking in the shadows. But with a quick click of your phone’s flashlight, you can illuminate every shadow and put your mind at ease.
IT leaders can take the same approach to shadow or unmanaged apps as part of their company’s SaaS portfolio. When IT lacks visibility into unmanaged apps, risks can arise around app compliance and security, unchecked app spend, and poor employee app experiences.
Yet IT can mitigate those risks without hampering employee productivity and innovation. I recommend building a model that allows employees to purchase the tools they need while ensuring SaaS governance and increasing visibility into shadow apps.
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The Rise of Unmanaged and Shadow Apps
Unmanaged apps have been present for years but ballooned during the pandemic. Productiv researchOpens a new window found the average SaaS portfolio grew 62% in the first year of COVID and an additional 28% in the second year. That research also revealed the majority of SaaS growth came from unmanaged and shadow apps.
 When COVID arrived, employees abruptly shifted to remote work – which meant they needed tools to maintain productivity and collaboration with colleagues. While business leaders made strides to fast-track digital transformation efforts, negotiating app contracts and updating infrastructure takes time. Employees required tools immediately and understandably purchased their own apps during a time of crisis.Â
 But IT doesn’t need to tamp down on unmanaged apps. Unmanaged apps can offer unique insights into tools that might be valuable for the company to adopt more broadly. You just need the proper guardrails in place to ensure visibility and maintain governance policies. Â
Why Unmanaged Apps Create Challenges for IT
While unmanaged apps are helpful to those who adopt them, they can also create challenges for IT and business leaders. Those problems include:
- Higher security and compliance risks: Without complete visibility into your SaaS portfolio, you can fail a compliance audit or deal with a data breach. Either scenario can result in money loss and impact your company’s reputation. According to an IBM reportOpens a new window , the average data breach cost in 2021 was $4.24m.
- Wasted spend: Not knowing the full extent of which apps your business pays for means you’re likely spending more than you need (or want) to spend. On average, companies are wasting $4,000 per user per yearOpens a new window . For a company with 1k employees, that comes out to $4 million wasted annually! When it comes time to launch a cost-cutting initiative, you won’t have the visibility to understand what shadow apps are costing the business — or be able to optimize or reduce that spend.
- A poor experience for employees: Employees can end up wasting a lot of time looking for the right tool or information. A 2021 surveyOpens a new window found that employees spend up to 5 hours a week searching for information across different apps. And when employees can’t locate the right tool or information, they turn to unmanaged apps. This scenario creates a poor employee experience that results in lost productivity and dissatisfaction with their job or the company.
Three Ways to Tackle Unmanaged Apps
IT professionals can mitigate the risks of unmanaged apps with the right insights and a single source of truth. Here are three tips to help IT keep tabs on shadow SaaS:
1. Improve visibility and discovery of new apps
Traditional approaches to app discovery, like monitoring the network for unknown apps or conducting annual audits, require a lot of human resources. Instead, what you want is a real-time view that helps you easily discover and keep an eye on every app in your SaaS portfolio.Â
A SaaS Intelligence platform can help you take a more proactive approach to understand what apps are being provisioned outside of IT. Such a platform should connect to relevant data sources to build a complete picture of your portfolio. Those sources should include:
- SSO and CASB providers
- HR systems
- Contract and finance tools
- Expense management systems
2. Automate app consolidation and rationalization
Too often, I encounter IT professionals who have no idea about the extent of unmanaged apps in their portfolio and what those apps are costing the business. Industry data highlights the severity of that problem, with Gartner estimatingOpens a new window that 25% of SaaS apps are overdeployed or underutilized.Â
It’s impossible to weed out duplicate apps and accurately forecast license needs without the right data. That challenge is amplified tenfold for companies undergoing mergers and acquisitions, where IT teams are forced to reconcile multiple companies’ SaaS portfolios.
With a SaaS Intelligence platform, you can rationalize your SaaS portfolio based on actual app usage data. Analyzing apps by category provides visibility into apps serving similar functions that may be candidates for deduplication. I also recommend looking for license rightsizing capabilities that let you automatically reclaim and downgrade app licenses based on usage trends.Â
See More: The Top 3 Needs of Application Security Today: Context, Visibility, and Control
3. Centralize app requests and fulfillment for employees
Often, teams or individuals adopt shadow apps when IT is slow to respond to app requests or employees don’t know what apps are available for use. You can fix this issue by setting up a self-service app request process and giving employees visibility into available apps as well as the app fulfillment process.Â
By establishing an employee-centric process, you empower individuals to easily identify the apps available to them and provide a seamless experience for requesting access to apps. You can also boost the employee experience by showing teammates which apps are commonly used and offering personalized app recommendations. App utilization will increase as a result, while the time required to get a new app will go down.
Illuminating the Shadows
Having the right data and complete visibility into your SaaS portfolio are foundational to dealing with unmanaged apps. A SaaS Intelligence platform provides a holistic picture of all apps in use and delivers the insights you need to mitigate the risks of apps not owned by IT. With SaaS Intelligence, you’ll always know what lurks in every shadow.
How are you managing shadow apps and tackling security challenges? Tell us on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window . We’d love to know!