We define shadow IT as phenomena where Information Technology (IT) solutions are acquired and sometimes developed by other departments than the IT group and without involving the IT group.
Shadow IT is a growing trend. Gartner estimates that shadow IT accounts for 30% to 40% of IT spending in large enterprises. The same results captured by other surveys during 2018 and 2019.
Shadow IT is part of the investable trend of decentralization. Companies are dealing with an ever-increasing complex and unexpected business environment. Like in nature, any decentralized approach works better than a centralized approach in a complex and unexpected environment.
If complexity is the motivation, the offering of Software As A Service (SAAS) solutions makes the IT shadow option much easier. You need not buy infrastructure to run IT solutions. All you need is a budget, something that is easier for department leaders to get, easier than getting it from IT.
The days of IT departments is over! The IT group should be a small group providing services to the few common needs (such as networking). People with IT expertise need to be an integral part of other company groups. They need to help them with finding the right SaaS solutions, developing competitive advantage software and integrating all the technology solution.
You can start the transition right now by assigning talented people from IT to other company’s groups, so they can help them find and adopt the right solution for them, and in the right speed that fit their needs. If you concern about security, the solution is to augment security experts in other groups, not to take the responsibility to run all IT related projects.
Once IT experts are part of other business units, this trend will grow. Thos IT guys not just supporting the business units, they learn their business and know what are their needs, and what is the expectations that business units have. This will slowly, but surely, increase the size of the IT experts in the business unit and decrease the size of IT. The end results should be a small IT group, containing just shared services.
Regretfully shared services is a vague definition, and it changes from one company to another, so it’s hard to define it. As a rule of thumb, the smaller the IT group and the bigger the number of IT experts in other business units, the better.
Shadow IT is not a bad thing, it’s a wake-up call that IT structure is not a fit for the current and the future of the business world and business needs. Instead of fighting with shadow IT, make it the operational model of Information Technologies!