Gartner recently forecast that of the $4 trillion spent annually on enterprise IT around the world, over 80% is spent on system maintenance. It notes that IT backlogs are compounding annually at 10-20%.
All this means that more and more of your organisation’s IT budget is devoted to simply maintaining legacy systems.
No wonder business leaders get so frustrated at Group IT’s inability to deliver new innovations.
So, with nowhere else to turn, Business often turns to the somewhat mysterious domain of ‘Shadow IT’, to ensure the organisation keeps pace with the demands of the digital economy.
I say mysterious, because the concept of shadow IT is tainted with a number of misperceptions. Many wonder whether Business should be buying technology without the involvement of the central IT function:
Won’t there be challenges around integration? Governance? Information security? Won’t it lead to duplication of effort throughout the organisation? Wasted resources? Will business be able to maintain and evolve the technology? Or will it eventually be thrown to Group IT to manage?
The reality is that these concerns can be thoroughly addressed (I’ll look at this in my next blog as a part 2).
Shadow IT is not a dark art that should only be spoken about in hushed whispers. It’s arguably an essential feature of a modern digital enterprise – alleviating pressure on a highly-constrained IT function, while empowering Business with the latest digital advancements.
Various trends appear to be converging to make Shadow IT more viable than ever:
- Consumerisation of IT… the increasing use of consumer technology which then drives the design and application of workplace technology.
- The increasing technology budgets assigned to the Chief Marketing Officer in particular, and other functional heads to some degree.
- Rapid advancements in Cloud computing and Software-as-a-Service… enterprise-grade IT services that can be instantly provisioned without the need for Group IT resources.
While these create the enabling environment for Shadow IT to flourish, perhaps the real driver of this trend is something more esoteric:
Consider that the broad concepts of digitisation and transformation have now been bandied around, often glibly, for the past few years now. But the concept of ‘digital’ has been so broadly applied, and so vaguely defined, that many people have lost sight of what it means – practically – in their organisation.
Put differently, executive visions around digitisation are often so lofty that they break down when being translated into specifics.
But line-of-business leaders and lower-level business management staff are often best placed to know where and how digital technologies will make a difference. They know how digital can solve specific problems or achieve better customer engagement at the critical moments of truth or point in the process.
By adopting Shadow IT, lines-of-business are able to finally attack those customer pain points and those tangible business opportunities – by flexibly and quickly acquiring the technology resources they need.
Time-to-market is increasingly a killer competitive advantage. Business cannot afford to wait for the typically lengthy Group IT processes of prioritisation, budget allocation and supplier or resource onboarding. It demands the agility to test opportunities and technologies in days or weeks (not months or years).
Of 10 ‘experiments’, maybe only 3 will work. But these could be three innovations that radically improve the organisation or the experience it provides to its customers.
And that’s the name of the game in today’s world: being able to fail quickly, and address real customer demands – like increased convenience, higher rates of innovation, and always-on access to services at the right moment in time.