One of the characteristics of innovation is to simplify and make more accessible technologies that previously required experts to handle them. Pregnancy tests illustrate this phenomenon: while in the 60s it was necessary to visit a doctor to perform such a test, it can now be performed by buying a $5 kit in a pharmacy. The change for a given technology is therefore translated by two factors: a reduction in costs and simplification. In other words, because the technology becomes cheaper and easier to use, experts are less and less needed for a given problem to solve. Indeed, those pregnancy tests are more and more bought online, thus removing the need for the pharmacist. In 50 years, solving this problem have moved from the doctor to the pharmacist, then from the pharmacist to the user.
The same happens in the IT field: Only a few years ago, developing a merchant website meant a project with a substantial budget and time. Today, with tools like Amazon Web Services, many bricks are available that can drastically lower the required technical level and accelerate the speed of development. The development of off-the-shelf tools is an additional factor that lowers costs and increases simplification.
The increasing availability of powerful and inexpensive tools was originally a first phenomenon that has been called “BYOD” or “bring your own device”, a practice of bringing personal tools for use in a professional context. This practice has several origins: first, the fact that the “Equipment Police”, i.e. the IT department, is always one war late, frustrating users who are at the forefront of technology. It takes time to certify tablets, Macintoshes, and accept other phones than…. Blackberry! Tension exists because again, users themselves often become experts in certain fields, and want to move faster than the IT department can to serve their business needs. The latter is obliged to comply with protocols, regulations and new standards. The development of cybercrime accentuates the slowing pace of IT – It becomes increasingly focused on security and standards compliance at the expense of service to users. When IT is involved in migrating to a new application or a new platform, it’s even worse. Everything has to wait and it’s no wonder typical time-frames for IT plans is 18 months to sometimes 5 years.
But users can’t wait. This is particularly true of business units that are in contact with customers and who are tired of waiting months to update of a requested Web page. Users’ typical time frames are expressed in weeks, not months. With the rapid development of digital, time accelerate even more. According to Gartner, a significant new digital platform emerges every six months (think twitter, Facebook, Tinder, etc.), and ignoring it can result in significant opportunity cost.
As a result, a second phenomenon develops that some have called “Shadow IT”, i.e. computer solutions autonomously developed by Lines of Businesses, which thus exist in the shadow of the official computer system. For instance, a group working at launching a telecom box within a large telecom operator set up its own CRM for less than 150K in a few days and could launch its product. The initial IT response had been to plan the development in an 18-month time frame!
Shadow IT is undoubtedly a risk, since it is developed by amateurs, but companies must also balance this risk with its benefits – as well as opportunity costs: speed of development, guided by LOB innovations, and appropriateness of solutions. In short all the benefits-driven innovations needed by users. And rightly so, because this innovation is carried out by those who need them. Shadow IT is thus a true agility factor.
Such a development is naturally resisted by the experts, who are deprived of their power – and in the end of their usefulness, just like doctors with pregnancy tests. The political dimension of such a development is not to be underestimated. Enterprises face a dilemma: Validate a system working around its process and rules, thus potentially dangerous, but that fulfils the needs of business units, or enforcing the rules but then slowing down and missing opportunities. That being said it is not so obvious that Amazon services, for example, is more dangerous to use than an application developed internally … The value of cloud-based tools and bricks is to have been tested by many other people when used. It’s the benefit resulting from a factorization effect from a standard tool, or a direct benefit of the division of labour.
Finally, shadow IT is an organisational disruption because it redistributes the power within the organization between IT depositary of an authority and expertise – but increasingly struggling to meet the needs of users – and the users accessing tools and knowledge to quickly and easily solve their needs. It is also a disruption because its development is a source of opportunities for all suppliers of technology and services that will leverage this on-going evolution. The traditional suppliers of IT systems and solutions are structured to meet the demands of IT services, i.e. deal with technical experts. Meeting the needs of ‘amateurs’ (business users, not techicians) requires different skills and different mind-set. Hence it is expected that the players in the shadow IT world will be new entrants not tied to their engagements with IT departments.