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Yogi SchulzWe’ve all observed massive growth in shadow Information Technology (IT). What’s driving this growth? As a reminder, shadow IT is hardware or software within an enterprise that is not supported by the organization’s central IS department.

The growth in shadow IT is driven by many information technology developments and the emergence of new IT services. These trends enable proactive business units to pursue attractive application opportunities without involving their IS department.

Can you leverage these trends for exciting business benefits in your organization, or will they lead to expensive boondoggles?

Impatient end-users

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Impatient end-users frequently desire immediate access to hardware or software without going through the necessary steps to obtain the technology through corporate IS channels.

This desire is triggered by a need for a new application that can support exploiting a quickly emerging business opportunity. When these end-users are supported by tech-savvy managers with corporate credit cards, shadow IT, scary or innovative, starts.

Lower-cost development project

Some business units believe that a shadow IT project will cost significantly less than a formal project run by the IS department and still deliver the same functionality.

This perception is typically false because many costs become invisible in a shadow IT project. These hidden costs include staff time, computing resources, travel, and software licensing.

This misperception is often reinforced by failing to estimate various actual project tasks such as requirements gathering, adequate software testing, implementation, and people change management. Nonetheless, this lower-cost misperception drives many shadow IT projects.

Increasing cloud computing capability

Cloud computing is a general term for delivering hosted computing services over the Internet. Examples of rapidly growing cloud applications include Dropbox, Gmail, Google Docs, Microsoft 365,, and Salesforce.

When individual work groups acquire these cloud computing services, a shadow IT service that often delivers exciting benefits begins.

Top-notch SaaS software packages

Many cross-industry and industry-specific Software-as-a-Service (SaaS) software packages exist. Examples include asset tracking and management, eCommerce, ERP, external data management, governance, risk management, and compliance management (GRC).

When individual business units operate these SaaS software packages independently, they are using a shadow IT service. Indeed, the vendors offering SaaS software packages typically go to considerable lengths to sell, configure and implement their applications without any involvement or interference from what vendors often see as the meddling IS department.

Capable software development vendors

When end-users hire capable software development vendors here or offshore without the involvement of the IS organization, a custom shadow IT application will result.

This situation can be hugely successful because:

  1. the IS department doesn’t have to defend the vendor or the price and isn’t overburdened.
  2. the End-users in the business acquire access to the functionality they want.

This happy situation can deteriorate rapidly when vendor performance declines or major data integration points create the need for the IS organization’s involvement.

Capable end-user software development tools

End-user software development tools have become more capable. When energetic end-users use these tools, a shadow IT application will emerge.

All will continue smoothly until the leading end-user is promoted, loses interest or is head-hunted by another company. Then, when the application crashes, a scary crisis will erupt because no one has enough knowledge to restart the application. The situation will drag on because the IS department management will understandably decline to take over support of this informally developed and likely unstable application.

Slow, ponderous, overloaded IS departments

Over the years, many IS departments have built processes that ensure application robustness, high availability, configuration management, superior security, and reliable backup and recovery.

IS departments typically insist on a formal, rigid project approval process and a structured project delivery approach that significantly reduces project risk. IS departments are also tied to an annual budgeting cycle, which often means projects rarely start in under a year from the first proposal.

Unfortunately, these processes add elapsed time to developing new or enhanced applications. When business units don’t want to wait, a new shadow IT service is often the result.

Yogi Schulz has over 40 years of information technology experience in various industries. Yogi works extensively in the petroleum industry. He manages projects that arise from changes in business requirements, the need to leverage technology opportunities, and mergers. His specialties include IT strategy, web strategy and project management.

For interview requests, click here.

The opinions expressed by our columnists and contributors are theirs alone and do not inherently or expressly reflect the views of our publication.

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