The Rise of Shadow IT

So much for delivering the IT projects you did know about on-time and on-budget.

This “bad behavior” by the business amplifies the already accelerating velocity of change facing IT whether in-sourced or out-sourced.

The true nature of today’s average IT environment is not pretty, and it’s not something most senior executives have fully grasped. It may also turn out to be a critical factor in obtaining competitive advantage from commodity IT.

Rise of the Knowledge-Worker

IT commoditization changes the balance of power between IT and the business, and within the business itself. Within the IT micro-economy of plug-and-play commodity IT, the consumer/supplier exchange relationship has shifted. This requires dramatic changes in thinking and management.

Traditional wisdom holds that the consumer for IT services is a functional business unit—sales, marketing, and so on—but, today, the real consumers of IT services are ad-hoc teams of knowledge-workers spanning multiple locations, and crossing business unit and corporate boundaries.

This shift in the exchange relationship has profound implications for the business and IT.

The underlying cause is the unstoppable commoditization of IT as advances accelerate productivity: The ubiquitous availability of information and internet technology is enabling knowledge-workers to traverse geographic, political boundaries, and now functional barriers.

Called “Shadow IT,” they are the millions of knowledge-workers leaping traditional barriers and asserting themselves in ways that challenge traditional IT departments.

Knowledge workers perform vital business functions like numerical analysis, reporting, data mining, collaboration, and research. They use databases, spreadsheets, software, off-the-shelf hardware, and other tools to build and manage sophisticated corporate information systems outside of the auspices and control of traditional IT.

By creating and modifying IT functionality, knowledge-workers are in effect supplanting the traditional role of corporate IT. However, they do so in a management and process control vacuum.

While the business can do these things due to the commoditization of IT, few executives ask if they should do them, and fewer say they must not. Virtually none realize the impact or import. Instead, to the dismay of IT staff, most senior executives and most CIO’s condone virtually any demand the business makes.

This lack of control is responsible for many of the problems associated with IT today.

While the IT center-of-gravity has irrefutably shifted to the knowledge-worker, they do not have the long-term vision or awareness of dependencies and planning that IT traditionally provides.

The business wonders why IT doesn’t get “it” and ponders outsourcing when instead they should be taking responsibility for their own IT usage. No product IT can buy, and no outsourced IT utility, can handle these and similar issues encountered in ever-increasing numbers by real IT organizations.

Yet, it is precisely this consumer/supplier shift, increasing dependence upon IT, and the product-oriented nature of commodity IT that provides companies with the opportunity to leverage it for competitive advantage. However many senior executives have so far tipped a blind eye to Shadow IT, implicitly condoning the bad behaviors previously described—and they are throwing away any advantage that IT can provide.