Shadow IT refers to IT devices, software, applications, and services outside the ownership or control of IT.
The growing popularity and easy accessibility of SaaS have caused many business users to seek new tools without enlisting IT approval. As more and more SaaS applications join the growing stack without IT participation, the shadow quickly grows more massive and more cumbersome.
Shadow IT can become a significant problem for organizations from a financial, operational, and governance perspective. Gartner projects that shadow IT comprises as much as 40% of all IT spending in enterprise organizations.
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Step 1: Uncover All Cloud-Based Applications
According to IDC, in the US, 70 percent of cloud application spending comes from line of business budgets – not IT. When SaaS purchasing lacks governance, it frequently produces a proliferation of duplicate subscriptions, functional overlaps, and reduced utilization—which all lead to waste.
However, siloed departments and ineffective communications mean that visibility into SaaS adoption and management is murky at best. Additionally, tracking the apps in a spreadsheet is timely, costly, and ultimately unsuccessful.
Many businesses have ditched the spreadsheet approach to SaaS management by deploying the Zylo Discovery Engine and SaaS management platform. The Zylo Discovery Engine is powered by a patent-pending, deep-learning algorithm that continually adapts and improves to provide a near 100-percent accuracy for SaaS detection and categorization.
When working to overcome shadow IT, it’s essential to determine when applications require oversight. Zylo research illustrates that contract renewal dates and terms are some of the most critical data hidden by shadow IT.
The Zylo SaaS management platform creates visibility in three ways:
- It creates a system of record for all details regarding SaaS applications, including the ability to document critical information such as contract renewal dates,
- It uses deep integrations into mission-critical applications to analyze transactions and compile consumption metrics, and
- It integrates directly into single sign-on platforms like Okta to create insights into application utilization.
By combining these viewpoints in a central system, the platform provides comprehensive analytics to highlight redundancies and drive actionable insights.These insights often make the need for centralized governance more apparent.
Additionally, Zylo’s dynamic platform provides continuing oversight into cloud-based subscriptions, enabling IT leaders to set appropriate constraints for which SaaS applications need IT supervision. These thresholds are essential for developing more efficient management protocols that will optimize SaaS security and consumption.
Step 2: Build Relationships with SaaS Buyers
Business units create shadow IT and adopt SaaS applications to meet business goals. As a result, these buyers often overlook the risks of shadow IT. With this in mind, it’s important to note that best practices begin with the source: the SaaS buyer.
When IT builds relationships with these SaaS buyers and becomes fully aware of their needs, they can help remove the obstacles and empower the business unit.
Through active IT collaboration, IT can work with business leaders hand-in-hand to think like a CIO and identify and adopt the technology that will support business goals and enterprise-wide advancement. Collaboration also creates a framework for shared goals regarding SaaS application cost, value, and security.
To enable informed negotiations and collaborative decision-making when it comes to cloud-based spend, Zylo’s SaaS management platform empowers the organization with the Views feature.
This toolset allows for increased visibility into SaaS utilization by a discrete business unit. This functionality allows for a partitioned view of SaaS usage so that separate teams can view their departmental metrics without gaining access to organization-wide data. Views promote visibility while ensuring information security where needed.
Step 3: Define Strategy for SaaS Governance
Each organization’s SaaS governance strategy, like its tech stack, will be unique, but the following initiatives can be tailored to create effective governance.
Control What Enters the Tech Stack
Effectively tamping down the growth of shadow IT can be accomplished by introducing software review boards or approval workflows for any new SaaS tool. Any new application requested must be vetted by appropriate departmental stakeholders such as IT, IT Security, Finance, Legal, and Procurement.
This process, which may include eliminating or setting thresholds for employee expense reimbursement, helps eliminate the single application instances that contribute to the growth of shadow IT. To aid this process, Zylo’s SaaS management platform offers continual discovery to highlight unapproved purchases.
Define Levels of IT Management And Support
Direct management and support is frequently the primary difference between a mission-critical application that’s 100% necessary for the health of the business and other tools.
By specifically designating which SaaS applications receive direct IT support and which will simply be acknowledged by IT but managed by business units or employees, technology managers can reserve their time and effort for only critical tools—while still preventing the growth of shadow IT.
Distribute SaaS Management Where Possible
By monitoring SaaS but distributing management effort, IT and technology teams can right-size the level of effort required to manage SaaS inventories.
The distribution structure can span from IT-owned applications (frequently mission-critical tools) to department-owned applications (such as function-specific tools for Marketing, HR or Finance) to employee-owned tools (such as role-specific applications like graphic design tools).
Ready to eliminate shadow IT? Request a demonstration today of Zylo’s SaaS management platform and begin building best practices for your organization.