Using Shadow IT to Increase Innovation
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
Shadow IT can be both a blessing and a curse. In today's business environment, it's a reality that every CIO must address.
By Samuel Greengard
Not long ago, it would have seemed unthinkable for someone outside the IT department to procure and install enterprise hardware, software or services. Although employees have always found ways to bypass IT policies and controls, organizations have traditionally taken a hard-line position about the use of unauthorized devices and software. CIOs and other executives have viewed shadow IT as nothing less than a serious problem—and a security threat.
But that was then and this is now. "We are living and working in an entirely different era. Shadow IT has emerged as an important issue that every company must confront," observes John Mahoney, vice president and distinguished analyst at Gartner, Inc. "There are some business and IT leaders who view the concept negatively. In reality, it's an opportunity … it often demonstrates missing features, tools and capabilities. People are trying to get their work done more effectively and shadow IT often fills the gaps."
To be sure, a growing number of business leaders and employees are turning to devices, tools and services that haven't been expressly developed, installed or approved by a CIO or enterprise IT team. In the past, shadow IT was a minimal concern because IT departments could more easily control networks and monitor devices. But thanks to the proliferation of smartphones, tablets and other devices—along with the cloud and ubiquitous access to the Internet—shadow IT is suddenly in the enterprise spotlight.
Says Mark Sullivan, IT strategy leader for North America at Accenture consulting, "If you walk into any major Fortune 500 company that's older than 30 years, what you see is an increasingly costy footprint and an outdated, poorly performing infrastructure layer that requires a lot of remediation." On the other hand, a well-defined strategy that embraces shadow IT can speed the adoption of new tools and technologies. And it can unleash a level of innovation that would have been unthinkable only a few years ago.
A New Era of IT Emerges
Shadow IT is an issue that cannot be ignored. Gartner predicts that 35 percent of enterprise IT expenditures will occur outside an IT department budget by 2015. Marketing executives, finance departments, HR leaders and others are increasingly procuring technology that suits their specific needs—often using no more than a credit card. According to a recent Blue Coat survey, eight in 10 executives believe greater IT autonomy is critical if their business is to grow and to become more efficient. Among the most common applications installed without IT's knowledge: office and communications software, security and social media apps, and cloud storage services.
For many CIOs, it's a world of enterprise technology turned upside down. "There's always been organizational politics and people attempting to test boundaries and see what they can get away with," Mahoney explains. "But the role of the formal IT organization serving as the policeman and controlling the technology used within the enterprise is over. IT has a very important role to play in the enterprise, but the selection of technology is no longer its exclusive domain."
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