What is shadow data?

Shadow data refers to data created, stored, or used outside officially sanctioned IT systems or governance frameworks. It typically includes files, datasets, or other information generated by employees, contractors, or systems that operate independently of an organization's primary data management protocols. 

Common sources of shadow data

• Personal devices: Employees may save work-related documents or datasets on their personal laptops, tablets, or smartphones, bypassing the company's secure systems.
• Cloud storage: While cloud services like Google Drive, Dropbox, and iCloud can offer convenience, many employees unknowingly or purposefully use these platforms outside of corporate IT controls, often storing important files that should be centrally managed.
• Unregulated tools: Employees may use unsanctioned apps or software tools that aren't monitored by the organization’s IT department.
• Temporary files: Reports, backup files, or exports that are stored temporarily but never officially archived can accumulate into a mass of unmanaged shadow data.
• Email attachments: Sharing sensitive or proprietary information through personal or non-approved email accounts can result in shadow data that’s difficult to track or secure.

The risks of shadow data

While shadow data may seem like an inevitable byproduct of a flexible, fast-paced workplace, it poses serious risks that organizations cannot afford to ignore. “Hackers know well that the easiest way to access a system is to find a technical vulnerability or steal an individual’s information,” writes Kitty Kioskli. Here are some risks associated with shadow data:

• Data breaches: Shadow data often lacks the robust security measures found in official systems. It may be stored on unsecured personal devices or third-party cloud platforms, making it vulnerable to breaches and cyberattacks.
• Regulatory non-compliance: Many industries are governed by strict data protection regulations such as GDPR, HIPAA, or CCPA. If shadow data is not properly managed, it could lead to violations of these regulations, resulting in hefty fines and reputational damage.
• Data inconsistency: With data scattered across multiple systems and platforms, ensuring consistency and accuracy becomes challenging. Shadow data may lead to conflicting versions of important documents or datasets, making it difficult to trust the data used for decision-making.
• Increased storage costs: Storing redundant or unmanaged data in various locations adds unnecessary storage costs and complexity to an organization’s data infrastructure.

Managing shadow data

Managing shadow data is a balanced approach that promotes security without stifling productivity. Here are some effective strategies to manage and mitigate the risks of shadow data:

• Implement clear data governance policies: Establish clear and concise policies that define where and how data should be stored, shared, and managed. Ensure that employees understand which platforms and tools are approved for work-related tasks and which are not.
• Educate employees: One of the most effective ways to reduce shadow data is through education. Train employees on the risks of storing and sharing data outside sanctioned channels. Make sure they understand the importance of data security and compliance regulations.
• Leverage data discovery tools: Invest in tools that allow your IT department to monitor and discover shadow data across your organization. These tools can identify unauthorized data storage, helping you mitigate potential risks before they escalate.
• Monitor shadow IT: Shadow IT refers to any technology or software used by employees without the approval of the IT department. Regularly monitor and assess the software and services used across the organization to ensure they align with company policies and security standards.
• Conduct regular audits: Implement routine audits of your organization’s data infrastructure. Check for any instances of shadow data and take corrective action when necessary. Audits help identify gaps in your data management practices and allow organizations to mitigate risks.
• Encourage secure collaboration tools: Provide employees with secure, easy-to-use alternatives to popular unsanctioned tools. For instance, an enterprise-grade cloud service that offers security features like encryption, access control, and compliance certifications can help employees collaborate efficiently without putting data at risk.

See also: HIPAA Compliant Email: The Definitive Guide

FAQs

How can I identify shadow data in my organization?

Organizations can use data discovery tools and shadow IT monitoring software to track unauthorized data storage and applications. Regular audits and employee feedback can also help identify instances of shadow data.

Can shadow data be beneficial in any way?

While shadow data introduces risks, it also reflects how employees are trying to work more efficiently and collaborate faster. However, its benefits are outweighed by the potential risks, especially if it’s not carefully managed. Properly controlling and securing shadow data can allow organizations to maintain both productivity and security.