Some examples include: A Google Drive or a One Drive to store or share files. A share drive with open access. Cloud services on Azure, AWS, Google Could, IBM Bluemix, etc.
What Are the Issues?It's not that using these resources are an issue in and of itself; it's that they present potential security and management issues.
Because the security of "Shadow IT Resources" are unknown to the organization, they could open security holes. Those security holes can be either external (exposing information outside the organization) or internal (exposing information to unintended people inside). It may not always be a problem per-se, but either scenario could really cause problems for the organization. Those problems can result in loss of business, legal proceedings, and even cause the business to fail.
Web app services on Cloud platforms are designed to be open to the world be default. They can be secured by deploying them inside a VPC (Virtual Private Cloud) which is accessible from within the network only. This same concept applies to many other Cloud services.
Besides Cloud services, there are countless tools, games, and application that are easily accessible to anyone with an internet connection. Security problems unknown, these could contain malicious code which is designed to leak information.
CostBesides the costs of recovering from an information leak, another potential cost concern is an unplanned expenditure. Particularly with cloud services since its relatively easy to create a new resource on a cloud platform. Cloud services are pay as you go so it would be a slow-burn rather than a fast explosion that leaked information would present.
This kind of issue is easier to resolve since all activities are logged and can therefore be monitored easily. Services like Alert Logic and Stackify give you insight into activities on the Cloud.
Scaling is another source of cost. Cloud resources are made to scale - meaning new servers or service handlers are created to handle increased traffic. Configure scaling appropriately and set limits to ensure that a DDOS (Distributed Denial of Service) attack doesn't end up costing you a fortune overnight. For example: the cost difference between a single small AWS server and many XXXL servers is in orders of magnitude of 100x the cost.
Despite the aforementioned concerns, it's not worthwhile to be too restrictive when it comes to using the tools available. The trick is to find a path that's just right.
The Tale of Goldilocks According to Me
In the classic Goldilocks fable, Goldilocks happens upon a cottage in the woods. The cottage is the residence of three bears (papa, mama, baby). She "innocently" does a B&E (Breaking and Entering). Besides the unauthorized entry into the abode, she eats their food; sampling the porridge of each until she finds the one that's not too hot and not too cold, but just right! After that she samples the chairs. Baby's chair is just the right size, but she breaks it. Then she proceeds upstairs to the bedroom and tries all the beds: papa's is too hard, mama's is too soft, but baby's is just right. She falls asleep only to be awakened by the angry bear family returned from their morning walk ready to maul her. She barely escapes with her life after her little crime spree.
Besides the rampant crime in the story, Goldilocks has to try what's available until she finds what's right for her. Follow this practice, starting with most restrictive. However, do be open about the strategy so that those in the organization aren't taken aback by the sudden lock-down! Some of what exists in Shadow IT-land may be business critical! In that case a total lock-down would cause serious business disruption. Consider that they do lock-downs in prison when a fight breaks out...
Stay Calm and Keep Innovating
Another extremely important factor in applying the right level and doing so with care to respect the autonomy of individuals is the innovation factor. Theodore Henderson of the Forbes Coaches Council notes that "Innovation Is Crucial To Your Organization's Long-Term Success." He cites many success stories of innovative products that have lead to serious growth of organizations. One such example is GMail, which is the fruit of Paul Buchheit's 20% time according to Time.com (free time given for the purpose of innovation).
Disallowing the use of applications and services can seriously stifle innovation. It can do so in two ways:
1. Denying access to tools that can make people more productive.
2. Making employees feel less autonomous.
Autonomy is important to innovation which stems from motivation. Going into total lock-down mode can make people like they're under total external control which stifles their innovations and productivity. As a business model, that isn't going to go well unless you're business is 20th century line assembly.
While it may be natural to knee-jerk and enter into total lock-down, it's important to find the right level of control. The right level of control means keeping Shadow IT to a minimum and plugging security holes while keeping all employees on the same side as Info Sec and Governance.
Read Troy Hunt's post here: https://www.tyroyhunt.com/new-pluralsight-course-the-role-of-shadow-it-and-how-to-bring-it-out-of-the-darkness/