Shadow IT trends: Do we fear it or embrace it? A Blog

Shadow IT trends: Fear it or embrace it?

Imagine a business intelligence team in any sector.

Lisa, a Business Analyst needs to retrieve certain data to help make an important business decision. This data is not readily accessible so Lisa goes to her IT team to ask for support.
She asks if IT can come up with a solution which will enable her to easily retrieve, analyse and transform data into useful business insights.

“Yes, we could help you,” says IT. “But we have a backlog of projects so we estimate we can deliver this in two years”.

From an IT perspective, this is completely justified. Business intelligence data requires certain governance in order to house the information. It’s critical this be centrally managed by IT, in accordance with the governance policy to ensure security and compliance are not compromised.

However, from Lisa’s perspective, two years is simply too long to wait. She will need to make informed decisions in the next couple of months to hit her quarterly targets. She needs to act now.

And there you have it – shadow IT at its finest.

Of course, as a CIO, this situation is not new to you.

However, it’s easy to see how these situations emerge and why they occur in organisations so frequently.

As the digital landscape continues to evolve and Software as a Service (SaaS) platforms become even more readily available, it’s clear shadow IT is here to stay.

Embracing new technologies is an opportunity for organisations to compete in new and exciting ways, but for the business and IT to work in perfect harmony— that is, to deliver business objectives through technology without compromising on governance and security, requires change.

What are the challenges of shadow IT?

Having numerous applications deployed into the business— whether IT are aware of these applications, or not — presents many challenges.

The result?

– Siloed efforts

– Lack of integration

– Discrepancies in reporting systems

– Poor governance and security

Siloed Efforts

Each department or team has its own technology and tools which meets their specific requirements. Therefore, every time the business wants to develop something new, they  reinvent the wheel.

Then, when the business requires input from IT further down the line to customise or assist with application updates, different IT skillsets are needed to support very specific tasks the business demands.

Occasionally, IT might also need to step in when things get too expensive i.e. when the service provider starts charging more and more for changes and updates.

This results in a huge strain on IT resources.

Discrepancies in reporting systems

Naturally, when organisations monitor the same data through different systems, discrepancies can occur.

Take customer data for example.

Marketing and Sales teams might consider reporting figures for both prospects and customers. Customer Relationship Management or Operations might only include figures for customers, resulting in a mismatch.

Despite the discrepancy, it doesn’t mean data from one system is wrong. Both systems are correct but have been working in silos and communication between the two is non existent.

This can put pressure on each silo to prove accuracy and can also cause tension between people across the business, particularly if senior management aren’t aware of where the discrepancy comes from and therefore presumes reporting is incorrect.

Poor governance and security

Perhaps the biggest challenge of shadow IT is poor governance and security. When the business deploys new software without the involvement of IT, governance and best practice is not adhered to. There is also no architectural coherence at an infrastructure level and its very difficult to manage centrally.

It must also be acknowledged that the result of poor governance is not just that of increased risk over compliance and security. Generating an IT governance policy is one of the most important components of IT’s job. When the business repeatedly ignores the policy, the relationship and trust that may have once existed between the two, very quickly breaks down.

As the business continues to deploy applications without the involvement of IT, the bridge between them increasingly becomes longer.

How to embrace shadow IT

If shadow IT is here to stay, how do you embrace it, not fear it?

Bridging the business-IT gap

Perhaps your relationship with the business needs patching up? That’s ok. Take it to counselling.

Managing shadow IT effectively will require a change in the mindset of CIOs and IT teams. You’ll need to change the focus from operational efficiency and technical implementation to a more strategic, holistic approach to delivering what the business needs.

This also means that both the business and IT need to have shared goals. When you eliminate independent objectives from the equation so that both are working towards the same goal, suddenly the bridge doesn’t appear as long.

Successful IT transformations will allow SaaS platforms used by the business to do much of the heavy lifting, (but will still provide overall visibility of applications deployed via control centres managed by IT). This will leave more time for IT to advise the business on how to run projects in a better way; how to reduce costs, how to make projects more secure and how to work effectively with software providers.

Ultimately, you will need to completely change the way IT engages with stakeholders. You’ll need to move away from playing a technical role to more of a consultancy based role with a stronger emphasis on customer satisfaction and softer relationship skills.

As a result, this changes the skill sets required to nurture the business-IT relationship effectively and deliver on the digital strategy.

With such a huge shift ahead, don’t underestimate the need for organisational change management. This is often one of the most overlooked functional requirements of a transformation program.

Use low code application platforms

As organisations continue to transform, the demand for more technology and software will only get stronger.

The emergence of low-to-no-code application development — the ability to build applications with limited input from hand coding— empowers both business leaders and IT teams to build working applications quickly and effectively.

Low code is essentially the digital evolution of classic Rapid Application Development (RAD) which priorities quick design and prototyping over strict requirements building and long implementations.

This type of software development allows citizen developers (non-developers or the average+ knowledge user), to compose business applications independently from IT. Essentially, it requires less technical skills which in turn empowers citizen developers to achieve MORE digital solutions with LESS code.

On the surface, the concept of low code application development may sound like its fuelling shadow IT. After all, it’s empowering the business to build apps without IT support, something which up until now IT was trying to avoid.

However, if IT embrace low code application development, monitor deployed applications centrally and consult the business on how to best utilise these platforms, low code actually becomes the holy grail for both sides.

If we look at why IT projects fail, one of the most common reasons is because of poor communication. As a CIO in charge of IT transformation, listening and communicating with the business regularly will be fundamental.

That starts with taking citizen developers under your wing. These are the people who will be building applications. Automatically including them as part of IT support will ensure you have increased visibility of what’s being implemented across the organisation.

Low-code platforms, such as AgilePoint, also make it easier to technically align IT and business units, using open APIs and central control centres which provide an overview of all applications in development and deployment across the organisation. Implemented well, this ensures overall security measures and governance policies are never compromised.

Assign budget based on income revenue

Traditionally, IT are assigned budget on an annual basis, meaning targets are reported annually. The change in customer demand means the business is likely to have 6 monthly targets, maybe even quarterly. This results in a misalignment which can often cause tension.

Successful IT transformations will create a budgetary framework that integrates both; preferably a framework that ties budget allocation to revenue. Alternatively, as a first step IT should be allocated budget on the same frequency pattern as the rest of the business.

This is again a huge shift because it suggests IT should no longer be seen as an overhead but a strategic function that drives business revenue.

In addition to restructuring from a budget perspective, a transformation will also involve organising a range of skill sets around the business into product teams instead of traditional project teams with set deadlines for completion.

This agile approach instead focuses on the product life cycle which drives a return on investment; revenue which can be fed back into the business to help make decisions on where the product value lies and when to implement new initiatives for increased growth.

Key takeaways

Here’s how you should start embracing shadow IT:

– Bridge the business IT-gap by focusing less on technical requirements and more on consulting business leaders on how to run projects more efficiently.

– Use low code platforms to empower citizen developers to create more digital solutions with less code, while centrally managing the deployment and usage of applications.

– Re-define your governance model with flexibility in mind

– Allocate budget tied to revenue income which means move away from “project money” to “product money”

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