Shadow IT is the label used to describe IT computing infrastructure, software and external IT services being used by business departments without explicit organizational approval and without IS department involvement.

Some pundits, with a positive outlook view, view shadow IT as good because it’s an important source of innovation. Other skeptical pundits express strong opinions that shadow IT is bad for most organizations because of integration and application maintenance issues. A few Machiavellian pundits view shadow IT as just ugly because it adds more risk than value.

But which view is really accurate? Read on.

Shadow IT is good
Shadow IT is a positive, helpful feature of IT delivery in many organizations. Increasingly sophisticated end-users that grew up with technology are happy to apply end-user development tools and many cloud-based services to business problems without waiting for the process-heavy IS department. These innovative solutions are often fit-for-purpose even though they lack reliability features IS departments insist on.
These shadow systems help organizations achieve first-mover advantages for new products and services. Often shadow systems tangibly describe requirements that can become the basis for replacement formal systems. With a reasonable framework to avoid potential risks, shadow IT can be an important complement to the formal IT delivery and maintenance that is well managed by the IS department.

Shadow IT is bad
Shadow IT is a horrible, risky and painful adventure for most organizations. Shadow systems create silos of poorly-managed corporate data that can’t be integrated for value. It undermines data quality through inadequate or non-existent editing. Shadow systems place competitive data at risk of theft through poor access controls. The cloud-based service providers involved sometimes rip off the naïve end-user playing the role of system developers with little or no relevant background. Often inappropriate technology is used because of the experience of the wizard end-user developer. Many shadow systems experience excessive unscheduled down-time due to poor software quality and a shaky underlying architecture.

Instead of bad shadow IT, organizations should strengthen their IT delivery organization to deliver formal systems faster and operate with more resiliency to respond to changes in customer trends.

Shadow IT is just ugly
Shadow IT is just ugly. Shadow IT may well deliver innovative ideas and benefits in the short term. However, shadow IT typically leaves a big mess behind that someone has to clean up. For example, think of how many abandoned SharePoint instances your organization has kicking around.

Here’s a typical scenario. An energetic wizard in a business department conjures up a truly great idea and builds an informal system that provides the required functionality. Real business value is apparent. Over time many small features are added as needed with no thought about an overall design. Response time is only so-so and outages are an on-going problem because the system was never architected.

Then the original wizard is transferred and promoted. A new person takes over development, support and maintenance. He or she introduces their ideas and their favorite technology into the mix. Business value grows as more end-users are added. Eventually the combination of growing data volume, the increasing number of concurrent end-users and an inadequate architecture causes the informal system to collapses under its own weight. At this point a vice president panics because his or her division can’t operate.

Now someone, typically the beleaguered IS department, is drafted to clean up this ugly mess. The organization would have reduced risk significantly by starting the process of redeveloping the informal system much earlier.

Can you share your experience about how shadow IT is good, bad or just ugly for your organization and its IS department?

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