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What is Shadow OT? How Does It Impact Your Security, Compliance, and Operations?

May 17, 2024

What Is Shadow Operational Technology (OT)? Why Does It Matter?

While "shadow IT" is a well-recognized term within information technology circles, its counterpart in operational technology (OT) environments, "shadow OT," is less widely acknowledged yet is still highly critical. In the world of OT—where systems control physical processes in industries such as manufacturing, energy, and utilities—the presence of unauthorized devices and software can be even more problematic. Operational environments are expected to be highly controlled and stable, with minimal changes to ensure reliability and safety. Introducing unknown and unmanaged technologies into these settings not only breaches security protocols but also introduces a significant risk to critical processes. The inherent need for stringent control makes shadow OT a particularly pressing issue that demands attention and action.

Understanding the Significance

1. Defining Shadow OT: Unauthorized Operational Technology (OT) Systems

Shadow OT refers to unrecorded OT systems in industrial settings like factories, utilities or transportation infrastructures. Unlike IT systems OT systems manage processes and equipment making their unauthorized usage or access potentially dangerous and disruptive. Research by CyberX reveals that 31% of industrial control systems (ICS) fall under the category of Shadow OT highlighting the extensive reach of this problem.

2. The Rise of Shadow OT: Causes and Patterns

The rise of shadow OT can be linked to a confluence of factors, including aging infrastructure, legacy systems, poor asset management practices, and limited visibility into OT networks. As organizations increasingly turn to digitalization to enhance operational efficiencies and connectivity grows, the impacts can easily go overlooked. Unauthorized devices and software, such as remote access management systems, virtual systems, and cloud connections, often go unnoticed and can introduce significant risks. Additionally, aging or legacy infrastructure poses an additional risk, often overlooked due to assumptions that these systems are not connected, even though they may still present vulnerabilities within the environment.

Furthermore, the increasing integration of IT and OT systems has blurred the boundaries between these areas, intensifying the challenges associated with shadow OT. According to Deloitte's findings, a troubling trend is emerging, with 67% of companies reporting a cybersecurity incident linked to unauthorized OT assets. This data acts as a wake-up call, emphasizing the importance for organizations to proactively tackle shadow OT issues to safeguard their critical operational processes.

Dangers Linked to Shadow OT

The existence of Shadow OT in an organizations infrastructure exposes it to risks each carrying consequences.

1. Vulnerabilities: Exploitation and Cybersecurity Risks

Unauthorized OT systems often lack security measures making them susceptible to exploitation by entities. A report from Kaspersky alarmingly states that 98% of ICS computers were targeted by malware in the half of 2021 highlighting the need for addressing this issue.

Cybercriminals can exploit these vulnerabilities to gain access disrupt operations or compromise sensitive data posing threats to an organizations cybersecurity resilience.

2. Operational Disruptions: Impact on Efficiency and Safety

Shadow OT systems can have an impact, on efficiency and safety. Unsupervised and unauthorized systems could lead to issues like incompatibilities conflicts with processes or unintended consequences potentially resulting in downtime or safety risks. IBM Security reports that the average cost of a cyberattack on a technology (OT) system amounts to $2.4 million highlighting the impact of such incidents.

Dealing with compliance challenges poses legal implications for organizations in regulated sectors. Shadow OT systems can jeopardize their ability to meet compliance standards. A survey by Fortinet reveals that 61% of organizations find it challenging to comply with industry regulations regarding OT security underscoring the importance of taking steps.

Failing to comply can lead to fines, legal troubles and harm to reputation emphasizing the necessity for organizations to maintain an OT security stance.

Given these obstacles tackling Shadow OT becomes crucial as organizations must strengthen their security protocols, uphold integrity and adhere to regulatory requirements.

Enhancing security measures is vital for safeguarding infrastructure sectors, like energy, utilities and transportation from the threats posed by Shadow OT.

The World Economic Forum has pointed out that cyberattacks on infrastructure have risen by 74% since 2018 highlighting the importance of enhancing security measures to protect these systems. It is crucial to address Shadow OT to safeguard infrastructure maintain the operation of vital services and uphold public confidence. Operational integrity is key, in ensuring reliability and continuity. The presence of Shadow OT can jeopardize an organizations integrity leading to disruptions and downtime.

Research by the Ponemon Institute indicates that 40% of organizations faced downtime due to security incidents in the past year emphasizing the significant impact on business continuity. By tackling Shadow OT issues organizations can mitigate risks and guarantee reliability and continuity ultimately boosting their advantage and customer satisfaction.

3. Regulatory Compliance: Meeting Industry Standards and Guidelines

Regulatory compliance plays a role in meeting industry standards and guidelines. Regulatory bodies have set rules and standards to enhance the security and resilience of OT systems. Failure to comply with regulations like NERC CIP can result in penalties. NERC CIP can fine up to $1 million per day, per violation, depending on the severity and impact of the noncompliance.

Strategies for Addressing Shadow OT

With an understanding of Shadow OT and its associated risks organizations are now ready to take steps to mitigate these challenges. This involves using methods to improve visibility, assess and control risks and securely integrate Shadow OT into their structures.

1. Enhancing Visibility and Monitoring: Spotting Shadow OT Assets

The foundation to any effective OT cybersecurity and compliance program starts with an understanding of the environment. This starts with an asset inventory - not just what devices are onthe network, but with detailed OT asset information. To effectively identify and manage Shadow OT assets—those not officially cataloged but still connected and potentially operational—it's essential to use both active and passive monitoring techniques. Active techniques might involve querying devices directly to update their status or configuration (in a manner that is safe for operational environments), while passive methods could include observing network traffic to infer the presence and operation of devices. This integrated approach ensures a more comprehensive and accurate single source of truth about the environment. Maintaining this inventory should be a dynamic process, frequently updated and ideally automated to ensure ongoing visibility and up-to-date information.

2. Managing Risks: Understanding Threats

Once Shadow OT assets are identified, organizations can conduct risk assessments to fully understand the threats present in their environment. The complexity of OT systems necessitates a detailed inventory of OT asset information to pinpoint and address risks. This includes collecting data on endpoint details such as software versions, existing vulnerabilities, applied patches, firewall rules, and even positions of PLC (Programmable Logic Controller) key switches.

Additionally, having historical context for this data is crucial. This helps in detecting and analyzing changes over time and establishes a baseline for identifying what normal—and abnormal—operations look like. This approach not only aids in understanding the risks present but also in shaping the responses to those risks.

Despite the importance, a study by the SANS Institute indicates that 67% of organizations lack a formalized risk assessment process for OT security, highlighting a significant gap in their cybersecurity strategies. Shedding light on shadow OT is is a huge first step, but then you need a plan for taking action on that information.

3. Standardization: Embracing Shadow Operational Technology

Standardizing your OT security and compliance programs through the adoption of leading frameworks such as NERC CIP, NIST CSF, or IEC 62443 is crucial, regardless of whether you are explicitly regulated. These frameworks provide a solid foundation of best practices that define the necessary security controls for a successful program. They facilitate greater alignment within your organization by bridging gaps between security and compliance teams, IT and OT departments, and between security and operations staff. The International Society of Automation (ISA) underscores the significance of such standardization, noting that adopting security standards like ISA/IEC 62443 could potentially reduce cyber incidents by up to 90%. By incorporating frameworks into your security strategies and including measures to manage Shadow OT assets, organizations can simplify processes, promote interoperability, and cultivate a more robust approach to OT security. This strategic alignment not only enhances operational efficiency but also significantly reduces the vulnerabilities associated with unauthorized systems.

Characteristic Shadow OT Traditional IT Shadow Systems
System Type Operational Technology (OT) systems controlling physical processes and machinery Information Technology (IT) systems handling data and applications
Potential Impact Disruption of industrial operations, safety incidents, and physical consequences Data breaches, unauthorized access, and software vulnerabilities
Risk Factors Cybersecurity threats, operational disruptions, and regulatory non-compliance Shadow IT often lacks proper security measures and governance
Affected Industries Energy, utilities, manufacturing, transportation, and other industrial sectors Various sectors, including corporate, healthcare, and finance
Asset Management Comprehensive visibility and monitoring of OT assets is a significant challenge IT asset management processes are typically more established
Compliance Requirements Stringent industry regulations and standards (e.g., NIST SP 800-82, IEC 62443) Data protection regulations and corporate policies

The provided comparison table outlines the distinctions between Shadow OT and traditional IT shadow systems. It underscores the challenges and implications associated with OT assets in industrial settings.


1. How does Shadow OT differ from IT shadow systems?

In IT setups shadow systems typically involve software or applications used by employees without official IT approval. On the other hand, Shadow OT encompasses unauthorized operational technology (OT) systems within industrial environments like manufacturing plants, utilities or transportation networks. Unlike IT systems that manage information.

2. Which industries are most vulnerable to Shadow OT risks?

Industries with operational technology infrastructure such as energy, utilities, manufacturing and transportation are, at risk of experiencing Shadow OT vulnerabilities.

These industries often heavily depend on industrial control systems (ICS) and control and data acquisition (SCADA) systems to oversee operations. Unauthorized or unmonitored OT systems, within these sectors can present cybersecurity, and safety risks.

3. What actions can companies proactively take to handle Shadow OT risks?

Companies can implement measures to effectively manage Shadow OT risks. These steps include,

  • Establishing processes for asset discovery and inventory management to identify all OT devices and systems
  • Utilizing advanced cybersecurity solutions designed for OT environments
  • Conducting vulnerability assessments and penetration testing
  • Enhancing employee awareness through training programs
  • Promoting collaboration between IT and OT teams, for comprehensive security and risk management approaches

In Summary

Shadow OT has become a critical issue within the industrial sector, introducing cybersecurity vulnerabilities, operational disruptions, and compliance risks. To effectively manage these challenges, organizations must implement comprehensive measures.

Understanding and addressing Shadow OT involves gaining deep visibility into both network traffic and physical asset operations, utilizing both active and passive monitoring to ensure a complete view. Conducting thorough risk assessments is crucial; details such as software versions, vulnerabilities, patches, and firewall rules provide insight into potential security threats, allowing organizations to proactively manage risks.

Integrating Shadow OT assets into standardized security frameworks like NERC CIP, NIST CSF, or IEC 62443 is essential. These frameworks help standardize security practices across IT and OT domains, enhancing overall cybersecurity posture and compliance.

The stakes are high, and immediate action is necessary. By adopting proactive measures and utilizing structured frameworks, organizations can safeguard their operations against the risks posed by unauthorized OT systems. Engage with specialists for customized solutions to secure your infrastructure and maintain resilience in the rapidly evolving digital industrial landscape. Act now to protect your organization and ensure future success.

Learn how a OT Asset Management platform helps you overcome shadow OT in our solution brief below.