Many pundits appear to believe that even small amounts of Shadow IT is a recipe for chaos that ensures poor organizational performance and significant under-achievement of IT benefits.

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

Perhaps I’m a contrarian, but I see lots of immediate benefits in Shadow IT for the astute CIO and the often over-burdened IS department.

Shadow IT takes budget pressure off CIO

Every year at budget time, the CIO is beaten up for consuming a significant chunk of the capital and operating budgets of the organization. To add insult to injury, the initial draft IS department budget typically proposes a noticeable increase for the upcoming year.

Somehow, during budget time, the other senior executives forget about the fact that most of the IS budget consists of line items that express their service level expectations and their individual project requests.

By proposing a flat or even decreasing budget, the CIO can look like a hero at budget time and side-step budget pressure exerted by other executives. The implication that almost every executive will be forced to acquire Shadow IT Software-as-a-Service (SaaS) solutions or sign outsourcing agreements with vendors can be safely ignored.

Shadow IT takes delivery pressure off CIO

No matter how well the IS department delivers projects, there are always a ridiculous number of self-serving critics who think it took too long, cost too much and didn’t deliver enough functionality.

Using a flat or even decreasing budget as cover, the CIO can honestly state that the IS department doesn’t have the capacity to take on newly proposed projects and thereby side-step delivery pressure from the other executives.

Now the executives who require IT projects will be forced to acquire Shadow IT SaaS solutions or sign outsourced development agreements with vendors and bring delivery pressure on themselves through their Shadow IT solutions.

Shadow IT takes knowledge pressure off CIO

In many organizations business groups expect that business analysts from the IS department will somehow magically know a lot about the details of the business function. The business analysts are expected to contribute mightily to the opportunity conversation, the problem analysis and the design refinement.

This stratospheric knowledge expectation is an impossibly high bar for even talented business analysts. When executives become disappointed by slower than warp speed project progress, they hire their own Shadow IT business analysts that supposedly can leap tall buildings in a single bound.

This Shadow IT hiring takes knowledge pressure off the CIO and the IS department.

Shadow IT can spur appreciation for CIO

The hands-off attitude and the careful maneuvering to avoid responsibility, as described above, is unlikely to enhance the standing of the CIO among the executive team. There’s a better way for the CIO to respond to and drive value from Shadow IT.

The CIO can show leadership on Shadow IT among the senior executive by:

  1. Explaining the value and the risks associated with Shadow IT.
  2. Achieving a consensus that managers, who make IT-related investment decisions, will be held accountable for those decisions.
  3. Illustrating how the IS department will support Shadow IT initiatives.
  4. Describing the circumstances where Shadow IT solutions are appropriate.
  5. Briefing the executive team about the extent and nature of Shadow IT across the enterprise.

If you want to know more, please read this Gartner monograph titled: Embracing and Creating Value from Shadow IT.

Can you share more ideas for how Shadow IT can take pressure off the CIO?

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