Hooray for Shadow IT!

In this series of posts, Arnaud looks back to his active working life of the past 35 years or so and shares his perspective on corporate life. All are based on real experiences although any resemblance with real people is purely coincidental.

It is time for a spotlight on Shadow IT

In many organisations Shadow, IT is a synonym for Evil. It is bad, it is a major cost that can be avoided, it undermines IT credibility, results in data, security & compliance issues and it should be eradicated ASAP. Unfortunately, IT organisations have had these discussions for so many years and have not been able to eliminate them with any major success. Maybe it is time for another if-you-cannot-beat-them-join-them approach.

I present you the Mr Kissinger solution for this age-old standoff between IT and Business. I refer to is as the Kissinger solution as it requires a diplomatic approach to make it work.

A history lesson

In my article "How IT lost its glamour and how DevOps comes to Rescue!" I explained the history of the Shadow IT Organisation as follows.

In many companies IT was hocus-pocus; it was for the IT-Magician in the house to fix anything broken that had a plug.

So that Techie became the corporate hero. Too often the CEO (and his leadership team) would rely on him for any issue they had, even if it had nothing to do with the company. Unfortunately, these Techies work in a department that is usually an enterprise cost centre, they had a specific pay-grade and the glass-ceiling for IT staff was rather low. As a result, ambitious, extremely skilled IT Techies had only a few options in case they wanted to monetize their skills; become a Manager of Techies (what I did), leave the company, or move into a department that uses Technology and become the interface to IT. Somehow that IT knowledge at the other side of the IT fence got financially much better rewarded.

So many of the best Techies left IT and some ended up in 'the business'. However once a Techie, always a Techie, and that Techie continued to do what he was good at and what had gained him so much recognition. This created the so-called shadow IT organisations in many large enterprises. A great source for continuous internal politics and a major waste of efforts and time. The end result was that every business in the enterprise had its IT skills, and firmly believed they could do IT better, cheaper, and faster, and would be very critical against their ex-IT colleagues! In many enterprises that's how IT lost its glamour.

Let's have pity for the Shadow IT boys and girls

So IT to be blamed itself for the current situation. By not paying them enough, their real talents left. As a result, we now end up with a set of frustrating ex-IT colleagues. Yes, they got a grade increase and pay rise but they are now in no-man land. They are not IT as they are not on an IT Cost centre. They are often the pariah of IT. Have pity for them.

They are also not really seen as business experts as the business sees them as an extension of IT and will not be able to offer them a career in the business organisation. They are locked up with golden handcuffs. Poor guys!

1+1=3

There is hope, however, it requires a diplomatic approach to bring peace to this age-old standoff to avoid business-IT meetings like these:

It requires a grown-up discussion between IT and business for them to start closely working together rather than arguing. Once the parties get over that mode you will see there are many benefits for the teams to work together.

1. Cost - in a time where IT budgets are under pressure, cooperation will turn out to be much more effective than fighting who owns who. Today IT may have put business analysts in place that basically talk to Shadow IT staff to understand their needs. That layer can be removed. Time is of the essence here. You will see that companies that are under pressure to downsize business may be tempted to take out shadow IT resources. This can result in a major knowledge loss.
2. Business Knowledge - Bringing the Shadow IT staff with IT will bring business knowledge way closer to IT, improving the IT deliverables.
3. Culture Change - Rather than the current toxic us-them mentality, accepting these as knowledgeable colleagues will result in a major culture shift.

Give me one good reason why one wishes to maintain the current setup. Let's see how this could work.

Your new organisational template!

In hierarchical organisations these discussions are not easy. He who owns the people has the money and has the power, and these discussions end up in a power play between IT and the business. Only when that vicious circle is broken and people sincerely are willing to work together in self-managed multi-disciplinary teams do you have a chance to change that culture. So the answer to owns shadow IT is NOBODY!

Now it is time for the CEO or President to step in.

Only by making these teams truly stand alone without any reporting line to a business leader or IT leader you can break that impasse. If you organise the teams along value streams the senior value stream leaders could be all placed in a single shared service organisation, with its own manager. This team serves both IT and the business. Especially for an organisation that struggles with their transformation to get off the ground, this may be an elegant way to speed things up.

The Value Stream organisation has a very minimal leadership just to keep the ways of working flowing. The role of the IT in this structure will be reduced to deliver technology platforms

Our Shadow Colleagues can play a very strong role in this new Value Stream Organisation. They could own value streams or find a role in some of the autonomous teams.

Problem fixed. Next!