What is Shadow IT?

How does Shadow IT impact on Organisational Efficiency?

Baxter Thompson Ltd, Jon Baxter

The rise of SaaS (Software as a service) applications over the last few years has opened up opportunities, and created challenges for anyone in the business of managing organisations of all sizes.

While SaaS has enabled smaller businesses to scale up quickly and cheaply, widespread use of SaaS within larger organisations can create headaches for IT departments, and senior managers trying to get their individual teams as effective as possible on their allocated budgets.  

Where IT management has not been fully integrated into every business department, the use of SaaS has created an environment for ‘shadow IT’ (or ‘stealth IT’) to flourish.

What is Shadow IT?

Shadow IT is the term used for software applications that run outside of the IT organisation’s current capacity to provide support or IT planning. If you’ve ever used your own personal email to send yourself work documents so you can work from home, or set yourself up an Access database to keep track of your own workload, then you have fallen into the shadows of IT in your organisation.

Plenty of people use shadow IT to help them get their job done, and despite the name, the use of shadow IT doesn’t necessarily indicate that something shady is going on. There are lots of applications that will help employees to work more effectively and that provide excellent results against departmental and company goals.

The problem with shadow IT is that the use of it, without the knowledge or approval of the official, central IT team, could indicate more fundamental problems with how the company uses and deploys its IT resources. Shadow IT can be symptomatic of organisational inefficiencies and bad practice and can increase business continuity risk, IT support costs, vendor lockin, reduced data visibility. It can actually increase manual processing once data is needed from several systems in order to complete a process, say from purchase to payment.

How to ‘solve’ the problem of shadow IT

The disadvantages of shadow IT is something that can be reduced with IT Business Partnering. Employees coming up with their own IT solutions can be a sign that the communication and planning  between your IT department and the rest of the company isn’t as good as it could be.

Reasons for shadow IT

There are lots of reasons why a ‘rogue’ department or employee are using IT solutions which are not on the radar of the IT department.

1)    The employee or department didn’t think they had to get the use of the application approved by someone in IT. This is a problem where the IT department have a tight remit and limited resources, and the employee perceives that them using such a small application or third-party service is something with which to bother the IT department. 
2)    The IT department are closed-minded to third-party applications or services. Where the IT department have no knowledge of the application and have no resources to support it if something should go wrong, the IT department may not approve its use. However, this does not stop the employee or department using the service anyway. 
3)    The reason for needing the IT service is not part of the organisation’s core business. 
Shadow IT is not a bad thing in itself, but it does need management to bring it out of the shadows and put it on the radar of the IT department so that it can be made more efficient and effective.

Read more about Shadow IT and how it can be managed at Read More 


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