Someone needs to send a large file and email will not handle it, so they sign up for a file sharing service using their work email. Another person wants to keep notes across devices and installs an app. A third is using an AI tool to help draft emails and summarize documents.
None of these decisions are unreasonable. People are trying to work efficiently. But each of those tools now has company data in it, and nobody in IT or leadership knows it is there.
Why this is a real problem
When data lives in a tool nobody manages, several things stop being true. You cannot control who has access to it. You do not know what the vendor does with it. You cannot revoke access when someone leaves. You have no way to recover it if the service disappears or something goes wrong with the account.
With file sharing and collaboration tools, the specific concern is visibility. Data is being shared with outside parties, and there is no record of it, no access control, and no way to audit it after the fact.
With AI tools, there is an additional consideration. Most AI tools process the text you put into them. Depending on the service and its terms of use, that content may be retained by the vendor, used to train models, or accessible to vendor employees for quality review. If someone is pasting client information, internal financial data, or confidential communications into an AI tool, it is worth knowing exactly what happens to that text.
This is more common than most businesses realize
A useful exercise: think about the last time you asked everyone in your company what software tools they use regularly – not just the ones IT set up, but everything. Most businesses have never done that exercise. When they do, the list is almost always longer than expected.
Common findings include personal Dropbox or Google Drive accounts being used for work files, free-tier AI tools with no enterprise agreements, consumer versions of apps running alongside business versions, browser extensions with broad access to page content, and personal accounts used to sign into business tools for convenience.
Each of these is a small decision that made sense in the moment. Together they represent a significant amount of company data in places nobody is tracking.
Blocking things does not work
A policy that says employees cannot use unapproved tools tends to push the behavior to personal devices, where you have even less visibility. The goal is not to stop people from using helpful tools. It is to know what is being used and make intentional decisions about which tools to support, which to replace with better alternatives, and which to restrict.
That starts with an audit: what tools are actually in use? This can be approached by reviewing what is installed on company devices, what domains are accessed on the company network, and what services are connected to company email addresses. The findings are usually revealing.
From there, the right approach is to provide good alternatives. Shadow IT almost always signals that the official tools are not meeting a real need. If people keep using personal file sharing services, the question worth asking is why the approved option is not working for them.
AI tools specifically
AI adoption in the workplace is moving faster than most previous technology waves. Employees are using AI for writing, summarizing, analyzing, and communicating – often without any guidance on what is or is not appropriate to put into these tools.
You do not need to prohibit AI tools. But you do need a policy: which tools are approved, what categories of data can go into them, and what employees should understand about how their data is handled. That conversation is one most businesses have not had yet, and the window for setting expectations before habits form is closing quickly.
If any of this feels familiar, we can take a quick look at your setup and tell you what is actually worth fixing.