Is Shadow AI Lurking in Your Business

Shadow AI might sound a bit mysterious and nefarious, but it’s really just a term for when artificial intelligence (AI) tools and applications pop up around a business without a formal nod from the central IT or data governance teams. This can happen more often than you might think, and it has its upsides along with its challenges.

If you’re a top level executive you should take a little time to look around your organization to see who is using AI and how.

How Does Shadow AI Pop Up?
1. Easy Access to Tech: These days, AI tools are more user-friendly and accessible. Departments like marketing or HR might adopt or create AI solutions tailored to their needs without waiting for IT’s green light. It’s difficult to pass up on the amazing ability of ChatGPT and marketing teams are generating massive amounts of content that may or may not be “on brand” for your company.

2. Seeking Speed: Sometimes, a department might feel that the usual IT process is a bit slow for the fast-paced world we live in. They might go ahead with their own AI solution to keep things moving swiftly. The old, “easier to ask forgiveness than permission” is in play here. It’s enticing to know that you can solve a business problem in minutes, all you have to do is upload this massive proprietary data file to this LLM and BAM, mission accomplished!

3. Simple Oversights: At times, shadow AI just happens because there’s a bit of a mix-up about who’s supposed to approve these technologies, or maybe there aren’t enough resources to keep everything centralized. You know who you are mid-size emerging businesses. The desire to grow is strong.

4. Encouraging Experimentation: In companies that love to push the envelope, employees might tinker with AI to explore new ideas, without fully weighing the broader impacts. This is a real challenge for companies that decentralize in an effort to foster creativity.

It’s not doom and gloom. There is a Bright Side of Shadow AI.

1. Boosting Innovation: Departments can quickly try out new AI-driven ideas, helping them seize opportunities and solve problems at lightning speed. An AI solution doesn’t always involve loading up a mountain of proprietary data. Sometimes just asking the right question can solve a difficult problem.

2. Perfect Fit: Teams can get exactly what they need by customizing their own AI tools, which can make their day-to-day tasks run smoother. There is always that one person in the organization that takes the time to really get to know a new technology and masters it. A mastery of LLM’s can be a real boost for anyone.

3. Empowerment: It feels great to have the tools to creatively tackle challenges directly, doesn’t it? ChatGPT can turn an average performer at work into a star performer. Who wouldn’t want to be a star!

Hold on there, it’s not all good times. The challenges of shadow AI

1. Keeping Things Safe: AI tools developed without all the usual checks might miss important security standards, which could leave the door open to risks. These might include inadvertently exposing proprietary data to the LLM, making it public or writing a hotel review response that is not in alignment with the hotel brand.

2. Avoiding Duplication: Without a bird’s-eye view, different teams might end up creating similar tools, which can mean resources aren’t used as wisely as they could be. You lose the opportunity to refine an AI tool to its highest and best use.

3. Staying Compliant: It’s crucial to keep up with laws, especially around data privacy. Shadow AI could accidentally step over these boundaries, leading to tricky legal issues. You know the lawyers are going to have their say.

4. Working Together: AI systems developed by one team might not play well with other tech in the company, limiting how useful they can be in the long run. This can be compounded if the AI solution uses company data that is lacking in quality and consistency.

Keeping a Balance

While shadow AI can spark innovation and make operations move fast, it’s important to keep an eye on the bigger picture. Balancing freedom and creativity with a bit of oversight can help make sure everyone benefits. Setting clear guidelines, providing the right tools and training, and encouraging teams to work together can help everyone make the most of AI safely and effectively.

Remember, it’s all about getting the best of both worlds—innovation hand-in-hand with security and cohesion!