Mitigating the Risks of Shadow AI

Shadow AI

Singh Anusha

Oct 5, 2023 — 4 min read

Mitigating the Risks of Shadow AI

AI has become something of a buzzword in the business world over the past several years, and for good reason. Large language models (LLMs) have shown incredible potential in recent times, while data collection, analytics, and marketing have all proven viable areas of optimization for AI technologies.

At the same time, however, there are potential pitfalls to using AI. As AI-driven tools become more widely available, it's paramount that you keep a firm grip on the throttle by closely managing the use of AI-power solutions at your company. For this reason, shadow AI should be a real concern when trying to grow a modern business.

So, just what is shadow AI, and why should you be worried about it? Let's explore that.

Shadow AI and Its Risks
1. Data Privacy Concerns
2. Organizational Dysfunction
3. Inconsistent Results
Managing the Risks

Shadow AI and Its Risks

In essence, shadow AI encompasses the technological blind spots that exist in organizations where AI tools are routinely used. More specifically, it describes the use of certain AI tools by employees who have not obtained the proper clearance or authorization to do so. This can pose a number of important risks to your business, such as the following:

1. Data Privacy Concerns

Workers everywhere have begun leveraging AI tools to help them in their day-to-day responsibilities. It's not hard to see why, either, given the capacity for generative AI tools like GPT to enhance all-around productivity. However, this comes with a major downside.

For employees to utilize an AI tool effectively in their work, they must feed that AI with all of the information they would to perform their duties manually. Often, this includes sensitive company or client data, and herein lies the issue.

Using such tools without the supervision of a dedicated IT team means sharing data with AI without proper protection systems and encryptions in place to safeguard it. This creates vulnerability in the organization's framework, which could potentially put the progress of your whole enterprise in jeopardy.

2. Organizational Dysfunction

Shadow AI can also harm the alignment of your organization. With employees using a slew of different AI tools unmonitored, the decision-making process within your company can become extremely opaque.

Should problems arise from within, you will naturally want to identify the source of the issue swiftly so that you can rectify it as soon as possible. However, with AI influencing your company's processes from the shadows, it becomes considerably more difficult to get to the root of things as there is nobody to take accountability for potential errors.

When implemented incorrectly without proper support and supervision, AI technologies can turn your enterprise from a high-functioning, streamlined organization into a disjointed and dysfunctional one.

3. Inconsistent Results

Another major issue with using unapproved AI tools is that there is no framework in place for their utilization. In particular, they fall outside of any data governance policies that may be in place to ensure quality and consistency.

It's not uncommon for AI tech to run into issues with data, drawing on incorrect or incomplete sources and extrapolating to false conclusions. This is something that would be prevented by proper data governance, but shadow AI makes this impossible.

As such, depending on how AI tools are being utilized shadow AI can lead to inconsistent, problematic, and potentially even discriminatory outcomes. In these cases, instead of helping to optimize your business, AI can become an agent of chaos.

Managing the Risks

When it comes to dealing with shadow AI, preventative measures are the best course of action.

First and foremost, you should establish clear rules regarding the use of AI tools. This means outlining policies on tools that are acceptable to use within your organization and educating employees on the risks of shadow AI to discourage the use of unauthorized tech.

Additionally, you can utilize a digital adoption platform (DAP) to your advantage. With this software, employees will be able to avail of real-time contextual guidance to help them achieve proficiency with approved AI tools, this will further reduce the impulse to seek alternative tech.

Moreover, a comprehensive DAP will provide extensive monitoring functionality. That means that you can closely track behavior and identify when unapproved AI tools are being deployed. As such, you will be able to respond in a timely fashion to prevent this and effectively deal with shadow AI before it takes root in your organization.

Conclusion

Data and analytics are the name of the game in modern business, and AI undoubtedly has a major role to play in how you will optimize your company's performance. However, with power comes responsibility, as AI has the potential to derail your enterprise if used improperly. For this reason, it's essential to tackle the issue of shadow AI at an early stage.

By creating firm policies on AI implementation and utilizing adoption software for onboarding and monitoring, you will be able to establish a robust framework to identify and mitigate the shortcomings and vulnerabilities of AI tools. From there, you can safely leverage the incredible power of AI to drive your business forward and achieve long-term success.