Shadow IT — IT systems bought or built within an organization without organizational approval. In the world of SaaS, shadow IT is bought by the business units to immediately solve efficiency issues, increase productivity, provide education, and drive value within the department.
Then, Shadow IT Had Benefits
Believe it or not, some say that Shadow IT, in moderation, is good for business. When business units are independently purchasing solutions (often best-in-class, one-off solutions), the organization as a whole innovates at a rate faster than if all purchases were handled by Sourcing, Procurement, or IT teams.
— Tim Crawford (@tcrawford) July 19, 2018
Five years ago, I might have been inclined to agree. During my time in enterprise Procurement, Shadow IT was a reality, an inescapable reality that included risks and sunk costs. However, IT and Procurement would greatly hamper innovation if we were to halt disparate solution adoption in order to regain control.
Now, Shadow IT Carries Zero Benefit
Today, IT leaders should shine a light on all shadow IT in the business. The visibility that Zylo provides IT leaders empowers business units to continue researching and seeking solutions, safely. With Zylo, IT leaders can measure value, determine thresholds for centralized governance, and benchmark costs.
Therefore, today we see Shadow IT as an unnecessary repercussion of preserving business agility. Enterprises must seek solutions to uncover all shadow IT purchased throughout the enterprise. In short, today we agree with these CIO tweets:
One clarification: #shadowIT in the sense of "wild" ungoverned use of credit cards can be a challenge – an IT #strategy that recognizes the business unit is better suited to make some tactical investments within a known box and transparent guidelines can help #TTM. #CIOChat
— Wayne Anderson (@DigitalSecArch) July 19, 2018
Have never seen a net pos benefit from any #ShadowIT action. #CIO has to meet the needs of the org as a whole, and often what’s opt for the whole is subopt for at least some individual depts. and conversely what’s fully opt for a single dept will be detrimental to the whole.
— Stan B (@xstanbx) July 20, 2018
Who is to Blame for Shadow IT?
More often than not, our customers report that the organization blames Procurement and IT for the proliferation of Shadow IT.
As organizational software management decision-makers, IT is first blamed for hindering the adoption of effective solutions while enforcing the implementation of ineffective solutions.
Consequently, seen as blind to the needs of individual departments, IT managers lose control of Shadow IT when business units begin the covert purchasing of SaaS applications. The application spend is misplaced in expense reports: Shadow IT prevails.
— Tim Crawford (@tcrawford) July 19, 2018
When these purchased solutions are poorly implemented, business units rely on IT to troubleshoot on-demand. Without previous knowledge of the application, IT managers cannot forecast support and therefore fall short of resources. Once again, business units deem IT ineffective and continue operating under the radar.
Finally, when addressed in terms of security and ROI, IT leaders are blamed again for their inability to wrangle, manage, measure, and secure on all software solutions across the organization. It seems that no matter who purchases the software within the organization, at the end of the day, the blame always ladders up to IT and procurement.
Zylo Eliminates the Blame Game
At Zylo, we are empathetic to IT and procurement professionals. In fact, we built our platform with the promise to eliminate the blame game and drive solutions: Zylo is software management for the modern enterprise.
Zylo scrapes all expense reports, alerting our customers each time software is bought within the enterprise. Furthermore, our patent-pending matching model categorizes each application, combining spend and function. Finally, Zylo provides the contact information of the purchaser, enabling IT leaders to drive value at the source, the buyer of the business unit.
Today, Shadow IT is a reality for every enterprise. However, Zylo enables our customers to overcome the cost, security, and efficiency challenges inherent to Shadow IT. Request a demo to solve the Shadow IT problem at your company.