When Shadow IT Goes It Alone, No One Wins

I recently met with a very frustrated senior IT leader who invited me to provide my perspective on dealing with a situation in their organization.

A business group decided to pursue a cloud solution to address process and workflow inefficiencies. The group did their due diligence and settled on a leading vendor with the intention of implementing on their own. As they neared contract settlement, they realized they needed IT’s help and approached them looking for integration assistance to enterprise systems. IT was taken aback at the notion that they were neither made aware of the process issues nor included in the initiative from “the get go”. This created significant friction. The impact to each party was:

  • IT- Was caught off guard and needed to ingest the solution into the enterprise’s architecture which included processes, applications and data. They also needed additional resources which meant re-prioritizing initiatives in the pipeline and sourcing additional talent. Third party risk management was also a consideration.
  • Business Department — Ambitions to implement the solution within an aggressive timeframe rapidly disintegrated once they realized that this particular solution needed so much additional support. This led to some significant backtracking with senior management on costs and timelines leading to credibility damage.
  • Vendor — Essentially had to “take it from the top” to re-orient the broader team and re-evaluate the implementation.
In a nutshell: nerves were fried, relationships were damaged, and credibility was in further jeopardy. Not a win-win situation for anyone.

Personally, I don’t much care for the term “Shadow IT” (or “Rogue IT” for that matter). They are labels from a time when IT maintained an authoritative role over the enterprise’s technical architecture and external efforts by business departments to address issues or take advantage of opportunities using technology were considered “heresy”. The evolution of cloud based services like SaaS and PaaS have now given organizations choices beyond the traditional IT centric model. A recent statistic from the Corporate Executive Board (CEB) CIO Leadership Council indicated that:

74% of Business Leaders are willing to lead technology projects

This new reality has shifted the approach of many IT functions from an authoritative stance to a facilitative position where they partner with the business as a service provider, broker, and/or coach. Many even look to these activities as sources for innovation now. In this new model, the term “Shadow IT” is being replaced by the concept of “Business Led IT”.

The “ask” to me was to provide an approach that:

  1. Stabilized the current situation
  2. Provide a “Go Forward” strategy

As I prepared for my meeting with informal interviews and information gathering, I found that the IT organization I was meeting with continued to maintain an authoritative culture and the business department felt that IT was too constrictive. As I mentioned above, this is not a unique situation. It’s one that I have personally encountered and has been the subject of several case studies and best practices over the past few years.

My approach to this situation is based in 2 fundamentals:

  1. IT needed to be more adaptive to the concept of Business Led IT. The business pursued this, this way, because it didn’t view IT as a value adding partner. A fundamental change in culture and approach was needed to move forward and prevent future issues.
  2. IT, the business, and the vendor needed to establish a joint 3-way governance model for a successful implementation. This meant acting as equal partners that leverages the strengths of each as opposed to forming a “company versus vendor” model. The “us vs. them” approach engenders risks arising from the possibility of additional business/IT disagreements and “pass through” communications. In addition, each party has to own their individual stakes. Typically, these equate to:
  • Business — owning the ideation and business outcome while providing perspectives into best business practices.
  • IT — providing a total enterprise perspective including data and integration. Also utilizing core expertise in technology vendor management, formal project management experience and service delivery.
  • Vendor — Insight into their technology, subject matter expertise and best practices for their specific offerings.

This model not only sets the tone for the success of the implementation, but the ongoing support for the solution.

I mentioned that I encountered this situation in the past earlier in this article. Below are select slides I created a few years ago that provides a framework for partnering with the business on various types of solutions. In the organization I developed the framework for, IT was a shared service operation funded through a complex combination of calculated allocations and “pay per use” services. Business units had the ability to “shop” for services outside of IT, however, there was still confusion over how IT could support them in procuring and supporting these external capabilities. Feel free to use them as a template for your own needs…

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