Shadow IT - A hidden enemy or an overlooked opportunity?


Shadow IT sounds like a threat but handled right it can drive innovation and digital progress in an organisation.

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IT Paralysis?

We regularly get asked by CEOs to come and provide an external perspective on how they can tackle the challenges and opportunities presented by digital technologies. They often want to get an alternative perspective to what is presented by their IT department. This can be a dangerous assignment as the most disrupted department in almost every one of these organisations is the IT department. It's not uncommon for them to immediately see a digital platform service provider as a threat!

Cloud technologies, mobile apps and empowered employees have fundamentally changed the landscape that IT are supposed to manage. The skills IT staff traditionally possess ensure they can successfully manage their internal corporate systems and networks but are not suitable for tackling the digital world. Everything exciting and innovative seems to be happening beyond their firewall and beyond the core corporate systems they know so well. This often leads to IT paralysis in the organisation – The CEO knows he needs a digital strategy to utilise new technologies but doesn't know what that means and IT know they need to provide their executive team with a new strategy but don't know where to start. Hence we get called by CEOs to break the impasse.

One of the most common challenges we see straight away, is IT departments trying to come to terms with “Shadow IT” (or stealth IT).  Shadow IT is the term used to describe all the non-corporate technology being used by people in the organisation to help them do their jobs. This is software, often in the cloud, that is not sanctioned by the IT department.

A Digital Reality

The story is common across many organisations we visit:

We go into the organisation and ask staff about the systems they use. We have heard all of the comments below (or similar):

  • “Our corporate systems are clunky and if I want to access them from home I have to log in remotely via Citrix which is so slow”
  • “IT won’t let me access my documents from home so I set up a Gmail account and started using Google Docs”
  • “The corporate website can’t handle online surveys or events so I survey customers using Surveymonkey and invite them to events using Eventbrite”
  • “I manage the sales team and we need a pipeline tool for our meetings -  but the CRM system in the ERP is so clunky staff won’t use it.  So I decided to use (INSERT NAME of CRM of Choice) online tool”

Is a blanket ban on shadow IT the answer?

We then speak to IT about all the shadow systems being used. The traditional IT reaction is to ban these tools outright.  Often they don’t know about half the tools being used by the business and their training and previous experience often leads them to focus on negatives. We hear statements such as:

  • “We have banned cloud tools as they are a security risk”
  • “Data might be stolen so we must store all data on our corporate systems”
  • “They are not our responsibility – the marketing department look after the web tools”

By adopting a tradtional approach and saying shadow IT is forbidden or it’s not their responsibility, IT departments are ignoring the risks it brings.

The truth is that any system that holds an organisation's (or its customers')data is IT’s responsibility. In our opinion, every IT department has a duty to protect the organisation's data, no matter where it resides.

Shadow Innovation

As importantly, Shadow IT is often what unleashes innovation in the organisation. There are a number of reasons why.

  • It is likely to be the innovators in the organisation that have set up these tools. Frustrated by the lack of flexibility of corporate systems they go and find their own tools.
  • The innovators are often close to the customer and understand what the customer needs.
  • The innovators are interested in solving problems and have likely researched the best cloud based solutions for solving their customers’ needs. 

Shadow IT requires a different approach. To unleash innovation and better customer outcomes both IT and innovators in a business must work together. We see progressive IT departments that are on the front foot and adopting this approach. They agree that:

  • IT must understand that employees seeking innovative solutions are a great asset for the business.
  • IT must partner with the innovators in the business to find the best solutions.
  • IT must also provide guidelines on what Shadow IT technologies are acceptable.
  • The innovators in the business must agree to follow the guidelines laid down by IT.

What Shadow IT is acceptable?

In our opinion, in a digital world with pervasive and low cost cloud technologies, Shadow IT will always exist. Therefore it should be embraced under certain circumstances. We believe good Shadow IT systems are:

  • Built on common open web standards – there should be an API that lets it speak to other systems.
  • Fully secure and manage customer data according to best practice (for your industry).
  • Supported by a large community of customers (You can be cutting edge but don’t be bleeding edge!).
  • Known to IT and IT are consulted prior to implementation (Whereupon Shadow IT becomes acceptable IT).

Shadow IT sounds like a threat but handled correctly it can drive innovation and digital progress in an organisation. To find out how it is being embraced by our community of clients contact us today. 

Do you have any experience of Shadow IT? We'd love to hear your views via our social channels on LinkedIn and Twitter. 

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