'Shadow AI' is spreading and creating compliance risk

Survey finds most operations teams are using AI tools outside company controls

'Shadow AI' is spreading and creating compliance risk

 

Seven in 10 operations management professionals are using unauthorised artificial intelligence tools, creating significant security and compliance risks for their organisations, according to new research from Smartsheet.

The company’s 2026 Operational Excellence Report surveyed 1,550 operations management professionals across seven countries, including Australia, and found a widening gap between the speed of business change and the ability of operational systems to adapt.

The practice, known as “shadow AI”, has emerged as employees seek to improve efficiency in the face of outdated tools and manual processes. The report found 94% of operations professionals currently use AI to assist with tasks such as content creation, automating repetitive work, and streamlining workflows.

However, only 26% of respondents said their companies have fully documented and enforced AI governance policies.

“It’s clear that businesses are facing an urgent inflection point: operations professionals are creating compliance and security risks by using ungoverned, shadow AI to overcome the limitations of legacy tools,” said Pratima Arora, chief product officer at Smartsheet.

The research found nearly all teams – 99.6% – must shift priorities because of rapidly changing business needs, while 71% of operations professionals said outdated tools and manual processes are hindering progress.

Despite ranking efficiency as the most critical factor for success, 99% of respondents said they spend time each week on repetitive, low-value tasks. More than half – 63% – said they struggle to balance competing demands for efficiency and adaptability.

The report also found three-quarters of operations professionals said their organisations rely on workarounds because tools and processes cannot keep pace with changing business priorities. This approach often creates information silos that impede execution.

While 97% said visibility into work across the organisation is essential, 61% said they lack full visibility.

Only 8% said they believe their organisations have achieved operational excellence.

“The report highlights a critical shift in operations management: adaptability is now as important as efficiency, and fixed processes can’t keep pace with business change,” said Maribel Lopez of Lopez Research. “AI can help close this gap, but only when paired with enterprise-grade governance and secure, integrated workflows.”

The survey was conducted by Dimensional Research between September and October 2025 across the United States, the United Kingdom, Germany, France, Singapore, Japan, and Australia. Participants represented a mix of ages, job levels, job functions, company sizes and industries.

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