By Farica Chang, Managing Principal
Here’s a staggering statistic that should make every SMB leader sit up and take notice: the global cost of cybercrime is forecasted to rise to 12.4 trillion dollars by 2027. Even more alarming? Half of that cost will be incurred by SMBs just like yours.
As a C-suite executive, it’s your responsibility to empower your IT team with the investment, strategic guidance, and support resources needed to safeguard your company’s assets. In order to do that effectively, you need to understand the most insidious threats facing your business—which is exactly what we aim to achieve with this blog series.
We’ll discuss some of the biggest risks you’re currently sitting on—the powder kegs that threaten to devastate your business—and what you can do to mitigate the odds of explosion. On today’s agenda: shadow IT. Let’s dive in.
The Risks Beneath Your Feet
Walk with us back in time for a second—imagine it’s the 1600s. You’re onboard a weathered pirate ship, surveying your motley crew. Below deck lies your most precious and perilous cargo: kegs upon kegs of black powder.
This volatile substance could spell disaster if mishandled, potentially destroying your ship and injuring your crew. But fear not—your team is ultra-vigilant, each doing their bit to keep the powder far from even the smallest spark. After all, no one’s keen on trading their hands for hooks.
Now, let’s sail back to the present day. You’re a C-level executive in a small firm, and you’ve got stacks of critical business data you need to protect. While not volatile in the traditional sense, it’s extremely attractive to a different kind of pirate: cybercriminals. Should this data be mishandled, the damage to your business could be just as devastating as an exploding casket of gunpowder.
This is your modern-day powder keg—and currently, it’s exposed.
The Hidden Vulnerabilities in SMBs
Many small and medium-sized businesses (SMBs) harbor a dangerous misconception: “We’re too small to be a target.” This belief often leads to overlooking crucial areas of cybersecurity, namely the multi-layered defenses that keep bigger businesses safe.
You might be guilty of:
- Enabling shadow IT
- Insufficient data backup and recovery plans
- Weak access controls
- A lack of security awareness training
All of which we’ll be discussing in dedicated future blog posts.
SMBs Under Siege
Although these vulnerabilities stem from a combination of factors, perhaps the most damaging is the mistaken belief that cybercriminals only target big fish. This couldn’t be further from the truth.
Cyber-attacks on small and medium-sized businesses aren’t just increasing—they’re becoming alarmingly common. 87% of IT professionals in SMBs reported experiencing two or more successful cyber-attacks between 2022 and 2023. These statistics paint a clear picture: cybercriminals see SMBs as low-hanging fruit, and often, they’re right.
While many SMB leaders are becoming more aware of external threats like phishing scams and ransomware, there’s a significant danger lurking within their own digital walls that often goes unnoticed: shadow IT. Unlike more visible internal risks such as employee negligence or intentional data breaches, shadow IT operates in the background, quietly exposing your business to vulnerabilities. It’s a threat that you might be completely unaware of—and that’s what makes it so dangerous.
Understanding Shadow IT
Shadow IT refers to any technology your employees use that sits outside your approved technology stack. This can be hardware, software, cloud subscriptions, and more. It’s the digital equivalent of your pirate crew using powder kegs in unsecured locations around the ship, maybe for a makeshift table, for example.
Last year, as many as one in two SMBs had shadow IT running unbeknownst to their IT departments, according to a survey by Capterra. In practice, this might look like you or your staff:
- Using personal Dropbox accounts to store company files
- Installing unapproved productivity apps on work devices
- Utilizing personal email for work communications
- Signing up for cloud-based project management tools without IT approval.
Despite its ominous name, shadow IT often emerges from the best intentions. In a quest to be more proactive and perform better, when your team feels frustrated or inconvenienced by their existing tools, they might turn to unauthorized solutions, entirely unaware of the dangers they’re exposing the business to.
The Consequences of Shadow IT (A Cautionary Tale)
To illustrate the potential consequences of shadow IT, let’s look at a real-world example from one of our prospects.
This St. Louis-based company discovered the perils of shadow IT the hard way. Two key employees had been using their personal Google accounts to save all their work-related files and communications. When these employees left the company, they took with them access to critical company data.
The company’s attempts to regain access to these accounts hit a brick wall. Google, prioritizing user privacy and security, wouldn’t release access to the accounts. From their perspective it’s understandable. How could they be sure the business wasn’t a group of fraudsters impersonating the company?
The real kicker, though, is that the business had no policies enforcing separate backups of data. The material in their former employees’ Google accounts was lost. Unrecoverable. Years of work, client information, and valuable intellectual property—gone in an instant.
This unfortunate scenario is a stark reminder of how shadow IT and a lack of clarity surrounding tech use can lead to devastating data loss at any moment. It’s a powder keg that, when ignited, can cause extensive damage to your business’s operations, reputation, and bottom line.
Steering the Ship: Your Role in Avoiding Shadow IT
As a C-suite executive, you play a key role in stopping shadow IT from taking root in your organization. Here are some steps you can take to support your IT team in devising, implementing, and enforcing clear usage policies around your tech stack:
1. Foster Open Communication
Create an environment where employees feel comfortable discussing their technology needs. If they’re turning to shadow IT, it’s often because they feel their current tools are inadequate.
2. Invest in User-Friendly Tools
Ensure your approved technology stack meets the needs of your team. The more user-friendly and effective your sanctioned tools are, the less likely your staff are to seek alternatives.
3. Develop Clear Policies
Work with your IT team to create comprehensive policies and restrictions regarding technology use. Policies should clearly outline what tools are approved, what the process is for requesting new tools, and the consequences of using unauthorized technology, while restrictions prevent users from downloading or installing software without approval.
4. Educate Your Team
Help your IT team communicate the procedures your employees are expected to follow and the risks of not doing so. Remember, everyone in your business is responsible for cybersecurity, so everyone needs to be educated on it.
5. Regular Audits
Implement regular technology audits to identify any shadow IT that may have slipped through the cracks.
6. Lead by Example
As a leader, it’s important that you adhere to the policies you set. Using unauthorized apps or services, even if it seems harmless, sends the wrong message to your team—and makes you a cybersecurity liability.
Securing Your Digital Powder Keg
In the age of digital transformation, data is the new black powder—volatile, valuable, and potentially destructive if mishandled. As the captain of your ship, it’s your duty to ensure your powder kegs are properly secured.
By understanding the risks of shadow IT and taking proactive steps to prevent it, you’re not just protecting your business from potential cybersecurity disasters. You’re also creating an environment where your team can work efficiently and innovatively within secure boundaries. Don’t let shadow IT be the spark that ignites your powder keg.
Anderson Technologies: Real People Creating Business-Changing IT Solutions
For over 25 years, Anderson Technologies has leveraged our expertise for the benefit of our clients, supplying them with suitable, secure IT and strategic guidance for their technological future.
We’re a dynamic team of IT professionals with over 200 years of combined experience and specialist certifications to back up our knowledge. As a trusted advisor, we don’t just focus on today. We strive to take your technology light-years ahead of your competition and scale with your business’s success.
Ready to secure your business? Contact us today to get started.
