If you’re in IT, you’ve seen it: The marketing team using an unauthorized project management tool. Sales reps expense-reporting their preferred CRM subscriptions. HR quietly adopting a new applicant tracking system.
This is shadow IT— employees and departments purchasing and using software without proper IT oversight or authorization. And while it often stems from good intentions (people just trying to get their work done efficiently), it creates major headaches for organizations.
Before you know it, you end up with a tangled mess of systems where data gets trapped in departmental silos, duplicate software subscriptions drain the budget, and vendor relationships multiply unchecked. What started as convenient workarounds have grown into complex organizational quagmires.
So how did so many companies find themselves in this situation? More importantly, how can tech leaders address it in their own organizations? We’ll examine practical strategies to rein in shadow IT and discuss why implementing the right automation and app development software can both prevent unauthorized tools from sprouting up and provide the efficiency employees want in the first place.
The rise of shadow IT
To understand why shadow IT has become so common, let’s first look at how enterprise technology has evolved. Twenty years ago, IT departments had complete control over tech purchases. Frameworks like ITIL (Information Technology Infrastructure Library) enforced strict processes for everything from buying software to deploying it. While this approach created more security and standardization, it often left business teams frustrated by slow approvals and limited options.
Then the cloud computing revolution changed everything. Companies like Salesforce and NetSuite came on the scene and started a shift from clunky on-premise solutions to sleek cloud-based enterprise software.
These early platforms were groundbreaking but couldn’t solve every specialized business need. Take enterprise sales forecasting, for example. When global organizations needing multi-currency support and complex modeling recognized that as a gap in their existing software, it created opportunities for specialized solutions to arise — like Clari, which built comprehensive forecasting tools that work with existing CRM systems to address the exact pain points organizations were experiencing.
Eventually, cloud technologies became more user-friendly, and a significant power shift occurred. Business units with their own budgets no longer needed to wait for IT approval to adopt new tools. While this flexibility helped teams work more efficiently, it also led to “SaaS sprawl” — an uncontrolled spread of software across the organization.
“It’s become easy for companies to create these technologies quickly — and even easier for teams to purchase them,” says Wayson Vannatta, Chief Information Officer at Nintex. “Someone in sales or marketing could just say, ‘My forecasting tool isn’t great. Oh, Clari’s got a good one. I’ll just buy it.’”
This mentality is becoming increasingly common. Gartner reports that by 2027, a whopping 75% of employees will purchase, adapt, or create technology outside of IT’s knowledge — up from 41% in 2022.
The result? More companies than ever are facing problems like fragmented data, security vulnerabilities, duplicate systems, and the headache of managing dozens or even hundreds of disconnected applications.
What can companies do to remove shadow IT?
While shadow IT may seem overwhelming, there’s a clear path forward for organizations ready to tackle this challenge. Here are three actionable steps tech leaders can take to manage and reduce shadow IT in their organizations:
- Know your SaaS
The first step in addressing shadow IT is gaining complete visibility into your software ecosystem. Many organizations are surprised to discover just how many unauthorized tools have popped up across departments, leading to security, risk and compliance, and integration challenges.
Modern SaaS management platforms can now automatically detect and track software usage across your organization — a capability that wasn’t available in the early days of cloud adoption. These platforms provide real-time visibility, allowing organizations to quickly identify unauthorized tools and clamp down on shadow IT before it becomes a larger issue.
Another option? Ask your finance department to check credit card statements and invoices for SaaS purchases. Then, talk to the functions that purchased the SaaS to see if they use these platforms, how often they use them, and what they use them for.
Whichever route you choose, you’ll gain visibility to decide which tools to keep, which to integrate into your official tech stack, and which to phase out.
- Consolidate strategically
Once you have a clear picture of your SaaS landscape, it’s time to evaluate each tool critically. Start by asking fundamental questions:
- What business problem does this tool solve?
- Is the solution worth the cost?
- How much overlap exists between this tool and our other systems?
“If you’re paying a lot of money for a SaaS tool, but it only solves part of the problem, maybe it’s time to think about putting that investment back into your main system,” says Vannatta. “Customize it if you need to, and close the gap there instead of relying on an extra subscription.”
In most cases, the fewer tools, the better. By relying on a select few multi-purpose platforms, you make work easier, save money, and reduce silos. What’s more, you’ll lessen the strain of constant system onboarding on your employees.
- Build instead of buy
The “buy vs. build” debate has come full circle. During the SaaS boom, purchasing ready-made solutions became the default choice — it seemed like a fast and easy solution. But times have changed.
“Today, with the advancements in low code and AI, you can actually write apps quicker and more cost-effectively,” says Vannatta. If you’re paying hefty subscription fees for a tool that only handles a small part of your workflow, you might be better off building something tailored to your needs.
Platforms like Nintex Apps make this easier than ever, letting you create custom applications without needing a team of programmers. With Nintex, you can connect multiple data sources, bringing all your data and workflows into one seamless experience. The platform integrates with the Nintex Automation platform, providing powerful workflow capabilities to orchestrate processes across systems.
This approach brings an interesting twist to the old “buy vs. build” question: Sometimes, building exactly what you need is simpler and more cost-effective than adding another subscription to your growing SaaS bill.
| Watch our webinar,“Shadow IT – How to Expose Hidden Apps,” to learn more best practices for managing shadow IT |
How automation and apps reduce shadow IT
Since shadow IT develops when departments use disconnected tools, one solution is a centralized platform that connects your data, workflows, and processes in an accessible location.
A unified platform eliminates barriers between teams, simplifies operations, and ensures everyone has access to the same information. This approach addresses common challenges like fragmented data storage, version control issues, and inefficient communication resulting from different functions using separate systems.
Choosing a low-code solution gives you flexibility without constantly depending on IT for every customization. Low-code platforms help non-technical users build apps and automate processes, freeing up IT resources for more strategic tasks.
For midmarket companies in particular, process management and automation software offers a cost-effective way to:
- Consolidate tools
- Simplify management
- Prepare your business for upcoming AI advancements
By reducing your reliance on multiple platforms, you can cut expenses, streamline work processes, and be better prepared for future technology needs.
Pro Tip: Look for a process management platform with low-code app development capabilities to give your teams access to custom solutions through approved channels. This reduces or eliminates employees’ incentive to seek out unauthorized tools to fill gaps in functionalities.
Avoiding the costs of unmanaged shadow IT
As organizations race to adopt new technologies, particularly AI solutions, the consequences of unchecked shadow IT become increasingly severe. Looking ahead is crucial.
“My job as CIO is to look ahead 2–3 years,” Vannatta says. “Right now, AI is useful for tasks like summarizing meetings and improving productivity in small ways. But by 2027–2028, AI will play a bigger role in reasoning and decision-making.”
This evolution means companies can’t afford to let their technology landscape grow chaotically. The scattered adoption of AI tools across departments without proper governance creates challenges that will only intensify as these technologies become more capable and integrated into decision-making processes.
To prepare for this AI-driven future, Vannatta advises companies to consider three key components:
- Evaluate your budget. Determine how much you’re willing to invest in AI solutions while accounting for both immediate needs and future scalability.
- Establish robust tracking mechanisms. Without proper monitoring systems, measuring your AI tools’ performance and return on investment (ROI) becomes nearly impossible.
- Prioritize integration capabilities. Teams may adopt different AI tools for their specific needs, but as Vannatta cautions: “The real concern isn’t just one AI tool; it’s how all these AIs work together.”
Taking a holistic perspective is essential. Rather than focusing on individual tools or short-term productivity gains, forward-thinking organizations need a comprehensive approach that addresses how their entire technology ecosystem functions. By tackling shadow IT today, you’re not just fixing your current inefficient processes — you’re positioning your company to access AI’s transformative potential in the months and years ahead.Ready to learn more? Request a demo to see how Nintex can help you curb tech sprawl and shadow IT.
