What is Shadow IT?

Not all the software your team uses is officially approved and that can be a problem. Shadow IT is one of the most common and overlooked issues in growing organizations, and understanding how it forms is the first step to regaining control.

Shadow IT: Meaning and Definition

Shadow IT refers to any tools, apps, or systems used within a company without the knowledge or approval of the IT department.

It often starts innocently: an employee signs up for a free project tracker, stores client files in a personal cloud folder, or starts using a communication app that isn’t on the official list. These tools operate outside of IT governance, but they still touch company data, workflows, and teams.

That’s what makes shadow IT risky. It’s not just about tools, it’s about visibility, control, and protecting your organization’s information.

Why Shadow IT Happens

Employees don’t usually set out to bypass IT. More often, they just want to get work done and the approved tools don’t meet their needs or move fast enough.

Some of the most common reasons shadow IT pops up include:

• Delays in getting new tools approved
  
  
• Teams seeking simpler, more intuitive software
  
  
• Project-specific needs that require quick solutions
  
  
• A disconnect between central IT and department-level priorities

In many cases, shadow IT reflects a deeper gap in how teams are supported with software.

The Risks of Shadow IT

While some rogue tools may seem harmless, they introduce real risks that can quietly escalate over time:

• Security vulnerabilities: Unapproved apps may lack encryption or compliance protocols.
  
  
• Data fragmentation: Critical information ends up locked in private systems no one else can access.
  
  
• Overspending: Teams duplicate tools or pay for software not tracked centrally.
  
  
• Loss of oversight: IT can't enforce permissions, backups, or audit trails.

When multiple departments operate with their own unsanctioned tools, the business suffers from inefficiencies and exposure.

Eliminate Shadow IT with Noloco

Give your teams the freedom to work their way, without losing control of your tech stack.

Noloco empowers operations and IT leaders to build flexible internal tools, team dashboards, and client portals that meet the exact needs of different departments. Instead of teams going around IT, they can build what they need within a platform that supports permissions, workflows, and secure access, all without writing code.

From back office apps to no-code CRMs, every Noloco project is built on centralized data and governed through our robust permissions editor. You can manage visibility, access levels, and workflows across departments, ensuring full transparency and compliance.

By providing the tools people actually want to use, you reduce the temptation for shadow IT to exist at all.

Explore more foundational terms like this in our full glossary.