by Thomas Wailgum

Rogue SaaS Is Alive and Kicking, IT Leaders

Jun 21, 2010
Enterprise Applications

New research shows that business managers won't wait for IT anymore.

In my most recent blog post, What Line of Business Managers Want: BI without IT, I posited this: Many LoB managers—feeling intense pressure to roll out BI apps to their users and frustrated by IT’s slow pace—are circumventing IT and CIOs.

This trend troubled me. Without IT’s critical input as well as a long-term strategy for sound integration and data management practices, I reasoned, there would be consequences: Perhaps those LoB managers might realize a short-term gain, but the long-term results would add only more IT complexity, more data disconnects, more integration headaches, and more applications to already bulging enterprise portfolios.

This was just another example of “Rogue IT” in practice: Nothing malicious, mind you, just business managers being aggressive, though perhaps a bit short-sighted.

My post was based on an Aberdeen Group report, which details the merits of Web-based self-service BI applications: “With this type of approach, companies reduce or eliminate IT intervention in the deployment and support of BI tools and allow for analytical curiosity to run its course with the LoB managers.”

While reading the Aberdeen report, I wondered just how big a trend this “go behind IT’s back” strategy was, especially as SaaS apps have become more popular.

I got my answer this week: On his Software Insider blog, Ray Wang, a partner for enterprise strategy at Altimeter Group, published the fascinating results of a survey that polled 100 Global 2000 organizations.

Wang asked both IT leaders and non-IT procurement leaders this question: “Are you using SaaS in your organization for major business processes?”

Just under a quarter of the IT leaders responded that they had deployed SaaS applications. Which means, of course, that roughly three-quarters of those IT leaders were confident that they did not have a SaaS app (such as CRM, human capital management, financials) running inside their business.

Guess what? A perfect 100 percent of the procurement leaders who responded said they had an existing SaaS contract in place.

Think Bill Lumbergh: Yeaaahhhhhhhhh.

According to Wang’s post, a procurement head at a large professional services firm said this to him: “The teams will buy whatever they need now. IT has no clue!” Added a procurement manager at a global 10 pharmaceutical: “Business has to go around IT because they are too busy keeping the lights on.”

Wang circled back with the IT leaders after tabulating the results, and this was the tech chiefs’ cumulative reaction: “When some of them were shown the results, these leaders expressed amazement and surprise. Organizations should be alarmed but not surprised by this lack of coordination between business and IT.”

These results are just one snapshot, but they paint a pretty convincing picture: The business isn’t waiting around for IT any more.

Do you Tweet? Follow me on Twitter @twailgum. Follow everything from on Twitter @CIOonline.