Shadow IT reconsidered: The case for losing control

Line of business users are provisioning technology by doing an end run around IT. But this loss of complete control of the IT estate has its benefits — for the CIO and the company as a whole.

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Employees who go off the reservation to acquire software outside official channels can provoke consternation and alarm in CIOs. But when the digital dust settles, IT organizations and the staff they serve often emerge from these events in a stronger relationship and with improved management.

Cloud-based application delivery and subscription business models from vendors create the perfect conditions for the natives to run wild — and for IT to react proportionally. When applications are provisioned outside official channels, the company’s security risks can increase, application integration opportunities are overlooked, siloed data diminishes analytics opportunities, the company can’t leverage pricing bargains for volume cloud use and tax benefits from the operating expenditures (OPEX) are missed because the payments aren’t rolled up into company financials.

In the context of these missed opportunities, the response from IT can take several forms. “I’ve seen budgets threatened when the shadow IT was discovered,” says Steve Rodda, chief product officer for Cherwell, an IT service management software vendor, though he adds that the typical response tends to be more measured.

Rodda witnessed a consumer electronics manufacturer customer establish an entire business unit just to get its arms around runaway cloud application deployments. “I think you’re going to see more of this in the future,” says Rodda.  “The fact that the company had to establish an entire division in order to corral this (phenomenon) kind of surprised me.”

Out of this organizational arrangement, the company constructed an IT services catalog through which employees could requisition applications. Not the most innovative idea given its adoption for many years. Yet it might have never been built in the absence of the shadow IT phenomenon. The services catalog was an attempt to strike a healthy balance between the need for software acquisition control while meeting the needs of front line employees more responsively. “The shadow IT issue has focused the IT departments more on how IT could add value across the business. Shadow IT has elevated their roles in some companies.”

The examples that follow demonstrate the positive outcomes shadow IT can deliver to the IT organization, from small but meaningful gains to ambitious organizational reengineering efforts.

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