Shadow IT, systems built and used by business units without approval from the IT function, are now pervasive. Given that shadow IT is now a reality, this article outlines how companies and IT departments can embrace the trend in order to properly manage it and reap its benefits, in terms of increased productivity, innovation and flexibility.

Shadow IT is a term used to describe technology systems and solutions built and used by business units in enterprises without explicit organizational approval from the IT function. Shadow IT is becoming both pervasive and unavoidable across a wide range of departments within most organizations. Technology now allows business users to download their own digital solutions without the permission, participation, or even knowledge of the official IT department. There have been many negative stories around the consequences of this trend. However, if managed correctly, shadow IT can actually serve as a key enabler, driving innovation and rapid time to market, rather than becoming a sinkhole for effort and budget. Given that it will happen regardless of attempted central control, IT departments should therefore learn to embrace shadow IT as an essential element of modern business life – and be prepared to manage it effectively. In doing so, they will genuinely empower employees and start to demolish the traditional divide between the business and IT.

In this article we will look at some of the drawbacks and potential benefits of shadow IT, and how companies can go about reaping these benefits. We will focus on the software-as-a-service (SaaS) aspects of shadow IT, not because all SaaS solutions are deployed as shadow IT, but rather because SaaS is currently the approach most used by employees to install shadow IT solutions.

Why shadow IT is unavoidable

Enterprise software is set up and configured to satisfy the requirements and needs of the business, rather than those of individual users. The aim is therefore to deliver a consistent, standardized approach. However, in today’s highly personalized world, where the commodity off-the-shelf applications we use every day can be heavily customized, users now expect far more of the systems they use in their business lives. In many cases standardization has led to businesses deploying inflexible, bureaucratic, non-intuitive software applications, for which it feels as if the solution is the master and the employee the servant. IT organizations, processes, tools and technology have evolved over time to address major project and business needs – such as delivering back-office efficiency through ERP software. However, the process of re-platforming from legacy technologies and ways of working to current-day needs has simply not provided the same level of personalization and user-friendliness that employees expect in today’s consumer-driven digital world.
By contrast, shadow IT is seen as fresh and new, using what is perceived by employees as leading-edge technology. It aligns perfectly with their demands and requirements, as it was set up by business users. In addition, shadow IT embraces the latest technologies via SaaS, platform-as-a-service (PaaS), infrastructure-as-a-service (IaaS), and other consumption-based models, and is agile by design – not as a costly retrofit.
Focusing on shadow IT using the SaaS model, it is obvious why users are embracing it:
 

1. Ease of access. A SaaS application is accessible over the internet, usually solely through a browser. Little or no client software is needed, so the employee can access the service from anywhere.
2. Ease of maintenance. SaaS applications are maintained by the provider. There is no necessity for the end user to install patches or updates, and no need for expensive and/or scarce internal technical resources.
3. Free/low cost. SaaS applications are generally available through a pay-as-you-go licensing model – all that is needed is a credit card, with no requirement for an enterprise-level agreement (and all the complexity attached). Many are free for small-scale or personal use. Subscriptions can be terminated at any time, meaning there is no residual cost or need to write down capital expenditure.
4. Fast deployment. Solutions are available on demand – end users do not have to wait to have their applications deployed or for an enterprise agreement to be signed. They can just get on with their work.