Sunday, September 1, 2013

Tough Choice for CIO: Shadow IT - Problems or Opportunities?

‘Shadow IT’ has existed for a while, it generally refers to the systems and solutions built and used inside organizations without IT approval, and there’s mixed feedback upon it. So the question is what you do with the fact that IT has little control over a myriad of apps that are penetrating the enterprise. Perhaps CIOs face another tough choice, Shadow IT: Problems or Opportunities?

  • Part of the issue is that there is usually no coherent strategy, that all business leaders buy into, coupled with a true understanding of IT spends. Business problems that benefit from technical solutions are complex; the components required to address those requests are similarly complex. IT and the business must work together to be successful, as information continues to be a growing asset for organizations, ensuring that information is delivered reliably, accurately, and securely is a critical factor to success and that cannot be achieved in a vacuum.
  • Shadow IT exists for real reasons, some subjective (lack of trust, turf games, etc.) and some objective (the way budgets work - sometimes there is no money/resources for it in the IT budget, but there is more than enough in the BUs budget, etc.). Whether it is a good thing or a bad thing is beside the point. The fact is that it is happening, and probably at a much larger scale than you realize (hence - Shadow). Keep in mind that the great proliferation of SaaS happened when business managers in large enterprises started procuring cloud based solutions with or without the consent of IT. Is cloud catalyzing shadow IT phenomenon?
  • A shadow IT can cause multitude of problems. Shadow IT is a band-aid for an organizations ineffective prioritization and utilization of resources that will not be replaced until the entire process is re-evaluated. Again the key is who manage what and how, plus IT need to be faster to take decision , visualize IT today is really complicated because its changes/evolution currently are much faster than decades ago.
  • Shadow IT may improve productivity, but cause risk concerns. Is Shadow IT caused by business mistrusting IT or frustrated by IT? Business said: shadow IT is growing because IT often fails to deliver solutions that meet actual requirements, or push packaged solutions which on top of being expensive also don't meet actual requirements; IT said: Shadow IT is also growing not only because IT does not provide a solution but even because that people don't want to ask/pass through an IT Department, with ignorance of GRC issues for long term. Shadow IT does exist because of failure to meet requirements, but the blame cannot be put on IT alone. Building meaningful and complete requirements is an art, not a science and requires significant efforts from all involved, IT, business and hopefully BAs in between. 
  • Shadow IT can bring Innovation opportunities: The key is to use technology that can be easily integrated into IT eventually. Shadow IT has to be always there as you need to balance standard with usability and flexibility. The fact is that "Shadow IT" is a reality and is a deeply integral part of the iterative process or cycle of technology change for a given organization. It becomes less relevant for those companies that possess a culture of innovation than in those that are inherently risk averse. One would think that those companies that have identified IT critical to executing their core competencies and mission objectives would be those companies that have a culture of innovation, but that does not always hold and there're companies that depend on shadow IT to push enterprise IT to innovate.
  • IT resources should be optimized to prioritize what will provide maximum value,  for IT to do the job, it needs the right amount of funding, be fully involved with business and be seen to drive and support innovation. The challenge is how to align IT correctly and one of the ways of doing this is to understand the gaps between what IT has the capacity to deliver and what the business is looking for, so it was not only about the customer getting what they want, rather than what is best overall for the organization taking into account.

  • Overall, eliminating or brighten Shadow IT comes down to a very high-level conceptual component and then having regular agreement on tactics: 1). Have strong alignment with the C-level on how the company will balance common IT trade-offs around reliability (quality), responsiveness (speed/agility/ flexibility), and cost. 2).At the tactical level, IT and the business must agree as each need comes up on how best to seek a solution in an area. If a company is fine having a more diverse application portfolio to best fit requirements then it can likely respond faster at incrementally higher cost to assure reliability of a more complex environment. 
The purpose of technology in a business is to drive value and results, to balance the speed with standardization, innovation with governance, only through better communication and management practice, CIOs can make a right choice in lifting IT performance and value position.  


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