Shadow IT, the purchase and provisioning of non-IT sanctioned hardware and software, is a recurring lament among IT leaders these days. At the highest levels of the organization, shadow IT may extend beyond mere cloud services or unsanctioned hardware, and business leaders may seek outside vendors to implement entire systems and major IT-relegated initiatives without the knowledge or consent of the IT department. IT leaders generally gloss over the rationale for these decisions, assigning blame to people who procured shadow IT for being uncaring, unsophisticated in the ways of security, or downright malicious. This largely misses the point that IT is becoming increasingly commoditized, and no longer under the exclusive control of an IT organization. Not only can one acquire anything from cloud file storage to entire CRM systems on the open market, but they can also find a litany of service providers who can fill IT's traditional role of evaluating, procuring, and implementing software without ever setting foot into the CIO's office.
It's not about the technology
The use of shadow IT is often not directly related to the technical capabilities of an internal IT organization versus an external one, but more about responsiveness. Working with a large company recently, I met several flabbergasted executives who were employing external organizations to fulfill traditional internal IT roles. They each mentioned that they were avoiding internal IT, since the organization had created such a complex project evaluation process, that it took nearly nine months to evaluate, plan, and estimate a mid-sized IT project that would take about 12 months to execute. With little more than a phone call or two, dozens of service providers could produce estimates and good enough proposals to allow for a go/no-go decision on the project, securing funding and launching while internal IT was barely getting started with its evaluation.
Rather than focusing on complex internal service level agreements or overwrought IT management methodologies, simply consider what business needs are driving a project and act accordingly. If you're tasked with implementing a medical- or life safety-related application where human lives are literally at stake, or must estimate extremely accurate costs or the company could face financial ruin, a nine-month due diligence period might be appropriate. However, if you're asked what a new reporting rollout might look like, a "good enough" response and commitment to move the project ahead and refine the details later may be more appropriate.
Use your advantages
With external software, hardware, and services so convenient, it may seem impossible for internal IT to compete. While they might have a superior product, internal IT generally has unassailable advantages in terms of company knowledge, experience with existing systems and, perhaps most importantly, relationships with key internal parties. As someone who has routinely played the role of external service provider, I'm often amazed at the breadth and depth of knowledge and relationships possessed by most IT leaders. These are assets that could be used to provide superior capabilities to internal customers, but are often squandered in favor of following the process. Most consultants quickly learn that companies buy people and relationship rather than services and technology, and the same applies internally as well.
Compete for the business
As you identify initiatives that have been sent outside your IT organization, in those cases where you feel you could have successfully and cost-effectively completed the initiative, take a different approach to analyzing the cause. Rather than taking the easy path and dressing down whomever made the decision to go outside, and regaling them with tales of IT standards and security, apologize for internal IT not being able to meet their needs. Ask them what capabilities or discussions would have led them to select internal IT assets, and vow to improve on them in the future.
If you run your IT shop like the average Department of Motor Vehicles, forcing customers to take a metaphorical number and then be subjected to surly employees, you'll find your waiting room empty if external competition were suddenly to become available. With the massive array of products and services available on the external market, once you start leveraging your superior internal knowledge and relationships, and apply a bit of customer service savvy, you'll become the preferred option within your company rather than provider of last resort.
Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent over a decade providing strategy consulting services to Fortune 500 and 1000 companies. Patrick can be reached at email@example.com, and you can follow his blog at www.itbswatch.com. All opinions are his and may not represent those of his employer.