How IT teams are fueling shadow IT and driving up enterprise costs

How decentralized IT teams fuel shadow IT | XOAP Blog
Shadow IT practices, paired with decentralization and cloud migrations risks, are causing exploding costs for enterprises. Is there a way out?
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Mario

When it comes to large organizations, IT decentralization challenges have become a major source of exploding costs, cybersecurity vulnerabilities and inefficiencies, often fueled by shadow IT practices and unmanaged cloud migration risks. This includes anything from uncontrolled and unstandardized cloud accounts created by different business units, such as those on AWS, Azure and Google Cloud platforms, to entire infrastructures misaligned with the central setup.

Once centrally monitored and controlled to adhere to internal policies, these decentralized systems have become a growing blind spot—leading to escalating cybersecurity risks and millions lost yearly. Without clear answers to fundamental questions such as ‘Are business standards implemented?’ or ‘Which configurations and image definitions are in place?’ enterprises are vulnerable, while accountability becomes increasingly difficult to maintain.

Lift and shift: the easy route to expensive outcomes

On top of uncontrolled decentralization, organizations face cloud migration risks that contribute to growing IT costs. These risks often stem from poor planning, a lack of standardization and inadequate consideration for performance and compliance. A seemingly quick, simple and cheap ‘lift and shift’ approach to cloud migration has proven to be much more expensive in the long run, leading to both financial and performance losses.

Moving an on-premises infrastructure to the cloud as-is, without necessary modifications, does result in a quick migration. Redesigning applications and reconfiguring infrastructure not only take time but also require a comprehensive cloud migration strategy. Avoiding this can seem tempting and, in the case of numerous uncontrolled business units, may even appear as the only feasible solution.

In practice, applications designed for the on-premises environments do not perform well when simply transplanted into a cloud environment, leading to slower performance and downtime as well as inefficient use of cloud resources and higher operational expenses. While clearly not the desired outcome, it pales in comparison to the security and compliance risks that the ‘lift and shift’ approach poses.

What was adequate for traditional data centers, might not be suitable for the cloud. Carrying over old vulnerabilities without the possibility to use cloud-native security features leaves the enterprise more exposed to security threats.

In 2022 and 2023, 85% of companies globally have experienced cyber incidents, with 11% attributed to the unauthorized use of shadow IT, according to Kaspersky’s report.

Shadow data was involved in whooping 35% of data breaches, which are becoming increasingly expensive (from $4.45M to $4.88M in 2023), the Cost of a Data Breach Report 2024 found.

With the lift and shift, staying compliant with strict data protection and privacy laws, as well as additional security standards mandatory in certain industries, is practically impossible as applications are not redesigned. Auditing and reporting on these regulations may also be impacted if the applications are not integrated with the cloud provider’s logging and reporting tools.

Getting a better hold of security

So what exactly can be done post-migration if everything has already been lifted and shifted to the cloud?

Conducting regular security and compliance audits to ensure that the cloud infrastructure meets regulatory requirements and best practices is probably the best way to start. Security holes can point to the infrastructure that needs to be prioritized and reworked. This will take the time that was initially saved by migrating fast.

If an enterprise faces decentralization in addition to the consequences of the lift and shift, taking control of different units’ IT practices will provide the best long-term solution. In other words:

Aligning OS image definitions and system configurations across the entire enterprise, while staying flexible to customization on the business unit level will set a healthy foundation for both cloud and business operations, minimizing risks and costs.

If done right, it should lead to a unified management of different platforms, accounts and vendors, without configuration drifts across units.

Enterprises can tackle these challenges head-on by using solutions like XOAP, which automates the (re)standardization of the entire enterprise’s infrastructure, addressing critical IT decentralization challenges while mitigating cloud migration risks.

By leveraging enterprise automation, XOAP provides a unified solution to optimize cloud environments, maintain compliance and eliminate inefficiencies. With continuous security and compliance monitoring, including immediate fixes, and connections to major cloud providers like AWS, Azure and Google Cloud, the XOAP platform tackles shadow IT and lift-and-shift challenges in one fell swoop.

Haven't migrated to the cloud yet?

Rethink your approach. It may require more planning, but it does not have to be a long and daunting process.

Instead of lifting and shifting, consider enterprise automation to overcome cloud migration risks and resolve IT decentralization challenges. This way, you can ensure scalability, security and cost-efficiency for your cloud transformation journey.

A standardized system migration from on-premises to cloud environments saves time and money now and in the future, and best of all, it works for you, not the other way around.

If you need help before or after migration to the cloud, book a free consultation with our automation experts.

P.S. You can use XOAP for free. With image, configuration, application and platform management modules included, our free plan offers plenty of starter units for you to explore all the automation and standardization possibilities.

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