As cloud-based tools become the norm, many companies are experiencing a new kind of IT problem: employees “going rogue” with their usage of software-as-a-service (SaaS) applications.

You may have heard the terms SaaS sprawl and shadow IT, both of which refer to this problem. The good news for small businesses is, it’s easy to remedy both issues with the right tools and approach.

Here’s what SaaS sprawl and shadow IT really mean, why they’re growing problems for organizations of all sizes, and how your business can take control before issues arise.

What is SaaS sprawl?

SaaS sprawl is the excessive use of SaaS application within an organization without proper oversight. This usually occurs when employees or departments subscribe and use cloud based services with no intervention from IT departments or decision makers. The lack of unified strategy drives security protocols and operational efficiency down, while driving cost up.

While many of these tools—Microsoft 365, Google Workspace, project management apps, etc.—can be incredibly useful, trouble arises when:

  • No central oversight exists
  • Multiple tools are being used to perform the same function
  • Licensing and subscriptions are duplicated
  • Sensitive data is stored outside company-controlled environments

SaaS sprawl should be wrangled, and IT leaders or business owners need to make sure the applications employees are using are actually the best ones to use—and that they are sanctioned by the company.

The Rise Of Shadow IT

Shadow IT refers to employees’ unsanctioned use of SaaS tools. In most cases there’s no malicious intent involved; employees do this simply because they prefer certain tools or believe they’re more effective than the designated choice. For instance, even though an employee is given access to Microsoft OneDrive for file storage, they instead choose to use their personal Google Drive without having a conversation with IT first.

While this might seem harmless, it can quickly lead to:

  • Loss of data control
  • Security vulnerabilities
  • Compliance risks
  • Disruptions if the employee leaves

Imagine an employee using their personal Google Drive for work purposes. If and when that employee leaves the company, the business data on their Drive is likely gone forever, either lost or even potentially given to someone else in the industry.

Why Uncontrolled SaaS Use Matter More Than Ever

The issue with SaaS sprawl and shadow IT is less about money—though duplicative subscriptions to redundant services do add up. It’s more about protecting your company’s data, customer information, and competitive advantage.

Once data leaves your organization’s environment, you lose the ability to monitor, protect, and, in some cases, even access it. That’s a serious risk—and one that many companies only recognize after something goes wrong.

How To Take Control: Two Essential Tools

To tackle SaaS sprawl and shadow IT, consider two options : CASB and data loss prevention tools.

Cloud Access Security Broker (CASB) Tools

Cloud Access Security Broker (CASB) audits user activity across cloud apps to identify the following:

  • Which applications are being used
  • If the apps are company-sanctioned or personal
  • A risk rating for each app

While apps from companies like Microsoft or Google have high trust scores, some apps will be flagged as risky. This visibility into risk ratings allows IT to take appropriate action, either blocking access or formalizing the use of beneficial apps. Having visibility into what your employees are using lays the groundwork for conversations that may actually benefit your business.

Data Loss Prevention (DLP) Tools

Data Loss Prevention (DLP) tools allow organizations to enforce rules on how data is accessed, shared, and stored. You can configure it to warn users when they use unsanctioned apps, transparently migrate to approved tools, and even block access to high-risk tools altogether.

With DLP tools, the transition from unsanctioned to sanctioned tools can be done gradually to avoid disruptions; you don’t want people coming into work on a Monday morning and discovering the app they use to do their job doesn’t work anymore.

A Chance To Improve—Not Just Restrict

Unfortunately, many companies only realize they have a problem after data is lost. Usually, this happens after someone leaves and files go missing. In most cases, it’s an honest mistake but it highlights a serious gap in oversight and control.

When companies do audit their cloud usage, they’re often surprised by just how many applications are in use—and how scattered the data really is. What starts as a few rogue apps can quickly multiply across departments and users, creating a complex web of unmanaged tools.

There’s something to be gained from seeing how people are actually doing their jobs, which is what analyzing SaaS sprawl and shadow IT usage can reveal. Instead of shutting down innovation, these audits can become opportunities to evaluate and improve your company’s tech stack.

Let’s address sprawl and shadow IT issues before they cost you big time.

Fixing shadow IT and SaaS sprawl issues doesn’t have to be a complicated or disruptive process. Email us today to begin the conversation—together, we’ll set benchmarks, review audit results, and begin refining your policies. The payoff? You’ll have better visibility, improved security, and ultimately smarter spending.

If your business hasn’t addressed SaaS sprawl or shadow IT yet, now is the time. You might be surprised what you uncover—and how much smoother and safer your operations can be with just a few key changes.