AI Tools Are Expanding 'Shadow IT,' Report Finds

- "Shadow IT" refers to any technology, software, or service used for business purposes without explicit approval from the IT department; the trend is accelerating as employees independently adopt AI-powered tools to work more efficiently. - The proliferation of AI tools is a primary driver of this new wave of shadow IT, with a recent Torii report noting that AI-driven applications are the most common type of unmanaged software in companies. - This practice creates significant financial and security risks, including redundant spending on applications with overlapping functions and increased vulnerability to data breaches, as unvetted tools may not meet corporate security standards. - Data from Productiv reveals that the average company has 342 SaaS applications, and on average more than half of the licenses a company pays for are not used regularly. - For those in finance and analytics, the use of unapproved AI tools can create data silos and raises compliance risks related to regulations like Sarbanes-Oxley (SOX) and GDPR, as sensitive financial or customer data may be handled by non-compliant applications. - Gartner predicts that by 2027, 75% of employees will acquire, modify, or create technology outside of IT's direct visibility, shifting the challenge from simple software subscriptions to a wider range of unmanaged tech. - In response, many IT departments are moving away from trying to block all unapproved tools and are instead using SaaS Management Platforms to discover shadow IT, assess risks, and create a secure framework for vetting and adopting new applications. - The average cost of a data breach has risen to $4.45 million, and 82% of these breaches involve data that was stored in the cloud, highlighting the financial stakes of unmanaged cloud-based applications.