Shadow IT: Déjà Vu All Over Again

I’m a bit surprised with all of the recent discussion and debate about Shadow IT.  For those of you not familiar with the term, Shadow IT refers to software development and data processing activities that occur within business unit organizations without the blessing of the Central IT organization.  The idea of individual business organizations purchasing technology, hiring staff members, and taking on software development to address specific business priorities isn’t a new concept; it’s been around for 30 years.

When it comes to the introduction of technology to address or improve business process, communications, or decision making, Central IT has traditionally not been the starting point.  It’s almost always been the business organization.  Central IT has never been in the position of reengineering business processes or insisting that business users adopt new technologies; that’s always been the role of business management.  Central IT is in the business of automating defined business processes and reducing technology costs (through the use of standard tools, economies-of-scale methods, commodity technologies).   It’s not as though Shadow IT came into existence to usurp the authority or responsibilities of the IT organization.  Shadow IT came into existence to address new, specialized business needs that the Central IT organization was not responsible for addressing.

Here’s a few examples of information technologies that were introduced and managed by Shadow IT organizations to address specialized departmental needs.

• Word Processing. Possibly the first “end user system” (Wang, IBM DisplayWrite, etc.) This solution was revolutionary in reducing the cost of  documentation
• The minicomputer.  This technology revolution of the 70’s and 80’s delivered packaged, departmental application systems (DEC, Data General, Prime, etc.)  The most popular were HR, accounting, and manufacturing applications.
• The personal computer.  Many companies created PC support teams (in Finance) because they required unique skills that didn’t exist within most companies.
• Email, File Servers, and Ethernet (remember Banyan, Novell, 3com).  These tools worked outside the mainframe OLTP environment and required specialized skills.
• Data Marts and Data Warehouses.  Unless you purchased a product from IBM, the early products were often purchased and managed by marketing and finance.
• Business Intelligence tools.  Many companies still manage analytics and report development outside of Central IT.
• CRM and ERP systems.  While both of these packages required Central IT hardware platforms, the actual application systems are often supported by separate teams positioned within their respective business areas.

The success of Shadow IT is based on their ability to respond to specialized business needs with innovative solutions.  The technologies above were all introduced to address specific departmental needs; they evolved to deliver more generalized capabilities that could be valued by the larger corporate audience.  The larger audience required the technology’s ownership and support to migrate from the Shadow IT organization to Central IT.  Unfortunately, most companies were ill prepared to support the transition of technology between the two different technology teams.

Most Central IT teams bristle at the idea of inheriting a Shadow IT project.  There are significant costs associated with transitioning a project to a different team and a larger user audience.  This is why many Central IT teams push for Shadow IT to adopt their standard tools and methods (or for the outright dissolution of Shadow IT).  Unfortunately applying low-cost, standardized methods to deploy and support a specialized, high-value solution doesn’t work (if it did, it would have been used in the first place).  You can’t expect to solve specialized needs with a one-size-fits-all approach.

A Shadow IT team delivers dozens of specialized solutions to their business user audience; the likelihood that any solution will be deployed to a larger audience is very small.  While it’s certainly feasible to modify the charter, responsibilities, and success metrics of a Centralized IT organization to support both specialized unique and generalized high volume needs, I think there’s a better alternative:  establish a set of methods and practices to address the infrequent transition of Shadow IT projects to Central IT.  Both organizations should be obligated to work with and respond to the needs and responsibilities of the other technology team.

Most companies have multiple organizations with specific roles to address a variety of different activities.  And organizations are expected to cooperate and work together to support the needs of the company.  Why is it unrealistic to have Central IT and Shadow IT organizations with different roles to address the variety of (common and specialized) needs across a company?