"Shadow IT" is a term used to refer to technology efforts taken on by business units, usually without the knowledge (or blessing) of the IT department at large. Shadow IT can be a double-edged sword. You should understand the potential problems of Shadow IT and how to manage it. Let's start by understanding how Shadow IT is formed.
Formation of Shadow IT
Shadow IT forms when there is a disparity between the need for technology and avaialble resources to implement the needed technology. Companies such as Microsoft Corporation have long carried the vision that technology exists to support a business. As such, they tend to try and make technology easy to implement. There are some technologically-saavy folks in business units. Despite the fact that they don't have formal technology education, they can build some software fairly quickly. So here's the equation:
(Business Unit Need) - (IT Resources) + (Relative Ease of Technology) + (Saavy Business Users) = Shadow IT
Problems with Shadow IT
Why is this bad? I mean, after all, aren't problems being solved? Overall, Shadow IT is generally a good thing. However, there are some potential problems related to Shadow IT that you should understand.
- Enterprise Architecture - Shadow IT typically starts with "utility" applications. However, as businesses and business units grow, the utility applications start to integrate data from disparate systems. Additionally, the user base will likely grow. As these aspects of the application change, the architecture changes. The problem is that the utiliity application was never architected in accordance with the enterprise architecture. So it's possible (and, in fact, likely) that the utility application does not adhere to the IT department's decisions related to security, archiving, performance, deployment, etc.
- Maintenance & Support - Another problem with Shadow IT is related to support. Invariably, the utility applications will reach a point of technological complexity that exceeds the knowledge level of the Shadow Technologists. (This is no different than a geek trying to perform tax accounting...without proper training and staying up-to-date on tax laws). At these points of complexity, the Shadow IT department will call on the IT department for help. But the utility application does not adhere to enterprise architecture constraints and is not part of the application portfolio. So the IT department at large does not know anything about this utility application and, when they start to learn, they realize that it is (potentially) not inline with standard development practices (different platform, lack of adherence to coding standards, etc.)
Managing Shadow IT
Despite the potential problems with Shadow IT, it is going to form. Again, the big reason is that the business units truly need the technology and they will get it one way or another. So how can you manage Shadow IT? There are a few techniques you can use to help manage the technology that Shadow IT implements.
- Business Analysts - Implement business analytics and hire business analysts to work with the business units. The analysts should be in touch with the business units and should see these potential projects coming. They should then report the need to the Project Management Office (PMO) who, in turn, schedule (or not) the project. Here's the kicker: If the schedule is inappropriate for the need then considering outsoursing the project to a local consultancy. If the PMO opts to NOT make a project then Shadow IT will form.
- Service Level Agreements - Regardless of Shadow IT, the IT department should have Service Level Agreements (SLA) with the business units. These agreements cover topics such as response time to issues, up time / availability for busines applications and the like. You can add to this and include items such as what technologies are supported by the IT department. Suppose, for example, the IT department uses Windows(R) as its primary platform and a business unit finds a Linux solution. In this case, the business unit should know ahead of time that they won't be getting support from IT.
Here's another thought...perhaps IT departments should encourage Shadow IT. That's right. I know you may think I'm crazy for suggesting it but Shadow IT can be a good thing. The IT department can be free to focus on Captial Projects and Operational Aspects of the technology in the organization. As long as it's managed (business analysts, SLAs, etc.) then perhaps it will alleviate additional burden on the IT department so they can focus on other areas.
Let me know what you think about Shadow IT. What are your experiences (good and bad)? What suggestions do you have for managing Shadow IT?