How to Identify and Manage Shadow IT

Overview

In today’s tech-driven workplace, employees often adopt software solutions independently to boost productivity, leading to what’s commonly known as "Shadow IT." Shadow IT refers to any software, applications, or services used within an organization without formal IT approval. Although these tools may fill short-term needs, they can introduce hidden costs, data security risks, and compliance issues. Tropic’s Unlocked Supplier Views help you identify and manage Shadow IT effectively, ensuring organizational alignment with approved tools and budget control.

Identifying Shadow IT with Unlocked Supplier Views

Using Unlocked Supplier Views, Tropic enables you to monitor suppliers with usage data but without contracts, providing insights into potentially unapproved software and services. Follow these steps to detect Shadow IT in your organization:

• Filter for Suppliers Without Contracts:
  • • Navigate to the Unlocked Supplier Views feature.
    • Apply the "No Contract" filter to display suppliers that have usage data but lack formal contracts in Tropic.
• Review Usage Data:
  • • For each supplier identified, examine the associated usage data to understand how extensively the service is being utilized.
    • Look for high user counts or regular activity, which may indicate widespread adoption within teams or departments.
• Spotting Potential Risks:
  • • Identify whether the services used align with your organization’s approved tools or introduce security and compliance risks.
    • Flag any suppliers that don’t align with company standards or are used for critical functions without oversight.

Managing and Addressing Shadow IT

Once you’ve identified unapproved suppliers, take action to manage Shadow IT by following these best practices:

• Reach Out to Users or Teams:
  • • Communicate with users or departments using these unapproved tools to understand their needs and the reasons for using non-standard software.
    • Determine if the tool fills a gap in your current software suite or if there are better alternatives that align with company policy.
• Create a Contract for Continued Use:
  • • If the tool has proven valuable and meets security and compliance requirements, consider formalizing its use with a contract through Tropic.
    • This step ensures the tool is managed, reducing risks associated with unmanaged services.
• Enforce Organization-Approved Software Policies:
  • • If certain tools don’t meet company standards, collaborate with IT and Procurement to establish clear policies and communicate them to employees.
    • Implement measures to phase out unapproved software and ensure employees are aware of approved alternatives.
• Ignore Unrelated Suppliers in Product Matching:
  • • For subscriptions that may not be business-critical (e.g., non-work-related services), consider ignoring these suppliers in Tropic’s Product Matching to prevent them from impacting reports.

Note: This does not solve Shadow IT but helps maintain accurate spend tracking for organizational tools.

Benefits of Managing Shadow IT

By actively monitoring and addressing Shadow IT, your organization can:

• Enhance Security and Compliance: Reduce the risk of data breaches and non-compliance with industry regulations.
• Improve Budget Control: Track all software expenses effectively, aligning spend with approved budget allocations.
• Promote Software Standardization: Ensure all employees have access to vetted and approved tools, creating a streamlined tech ecosystem.

For more information on using Unlocked Supplier Views and managing suppliers without contracts, refer to the Supplier Page Overview or the Spend Management article.