CEOs Brace for the Return of Shadow IT

As CEOs press for growth and business leaders find opportunity all around them in today’s global economy, an old IT nemesis is back. Shadow or rogue IT is becoming a prominent issue for CIOs once again. And while it’s far from new as an IT-management problem, there is now greater risk and complexity involved when business units go rogue and bypass the IT group to set up their own applications, hardware or IT services.

This challenge is not only about security and standardization, but also about how the IT organization will function most effectively moving forward. (For a deeper look at the future of rogue IT, watch for our Sept. 15 cover story.) I’ve talked with many CIOs lately about how the mega-trends of cloud, mobile, social media and consumer technologies are effectively supersizing their rogue IT problems. Company politics and career concerns also come into play, since most CIOs want to say “yes” to the business more often than “no.”

What these latest technology trends are doing is undermining the centralized controls CIOs so carefully put in place over the last few years. The cost efficiencies of standardization and the increased ability to manage risk when everyone goes through IT for their technology don’t seem to sway the argument in IT’s favor anymore. Because speed-to-market and profitable results are prerequisites for success, business decision makers aren’t willing to wait for IT to deliver. This real-time world is pressing IT hard to deliver more value across the entire business.

Yet there’s only so much any IT organization can accomplish on its own. I’ve heard in recent conversations with CIOs how unrealistic the pressure to deliver on all these projects has become. Some of you have started to realign your organizations, placing IT staff directly within the individual business units. Sound familiar?

Only this time, IT is stepping up as the core service provider (or the front-line manager with third-party providers) that allows business units to get the speed they want while still providing corporate security and standards. What also feels different this time around is how CIOs are setting the framework and taking part in those senior leadership decisions earlier in the game.

I’d love to hear what you think about shadow IT in 2011. Are you embracing it or fighting it?

Michael Friedenberg is the president and CEO of CIO magazine’s parent company, IDG Enterprise. Email him at mfriedenberg@cio.com.