If CIOs hope to eradicate shadow IT from their businesses, they can’t expect to accomplish that with an edict from the IT organization. Instead, they have to provide the business units with the means to do what they need to do without having to resort to sourcing technology on their own, which they almost certainly never wanted to have to do in the first place.
That was my main takeaway from my recent conversation with Simon Tucker, chief customer officer at Anaplan, a cloud-based business planning platform provider in San Francisco. Given that not everyone even agrees on what constitutes shadow IT, I asked Tucker how he thinks of it. He said what matters is how his customers look at it:
As we talk to more and more CIOs out there, what they’re discovering is that as the marketplace has consolidated, as invariably it does over the years, a lot of point solutions get rolled into bigger companies, and applications become more and more complex and can only be configured by the IT teams. That situation is slowing down the process of planning in the business. However, business is moving much more quickly today — it’s much more global, there’s much more data, there’s much more globalization of companies, and it’s moving very quickly. Competition is very volatile. And that’s why people have to change their business processes and their business strategies on the fly, and they have to quickly plan for that. What happens is, the business starts taking matters into their own hands, and they start running their own systems — in other words, a business unit is running its own technology.
Tucker explained that the way Anaplan helps with that is to bring in a single platform across the different business functions, and across all of the major planning and analytical processes:
In a sense, it’s managed by IT, but because it’s software-as-a-service, it’s really being managed by the vendor, which is Anaplan. The business can self-serve on this platform that’s still under the control and the governance of IT. So that’s really how CIOs see that Anaplan is eradicating this shadow IT. It’s really good for both parties. IT wants to be able to control systems in the business, because they want to make sure that they maintain security and integrity and consistency, etc. The business units don’t want the burden of having to create reports, which is the traditional area of IT for the business. They want to be able to have IT run the technology side of the house, but for business to be able to self-serve on a platform, and build their own models under the governance and guidance of IT.
I asked Tucker who within a company Anaplan targets with its business planning platform. He said it’s a multitude of people:
If you’ve got a company that’s looking to really bring in all the shadow processes into a single platform, then very typically it’s the CIO that we’ll talk to. However, sometimes we’ll actually start off in a company in a slightly smaller way. A company will invite us in to bid for a single, simple-use case to get going. So that could be, for example, the vice president of sales ops, or the vice president of HR. Or it could, of course, be the CFO, who wants to do anything from zero-based budgeting, to normal planning and budgeting and forecasting, to strategic financial planning, to consolidation, to managing their financial statements. So we really operate across the entire business.
So how common or uncommon is it for there to be a backlash from the IT department when there’s some perception that Anaplan is sidestepping IT? Tucker said there isn’t too much of a backlash these days:
Certainly, if the internal function didn’t consult the IT team, then there is potentially backlash, because IT wasn’t involved in the situation. We see that less and less these days. But sure, if IT doesn’t get involved, and the business goes off and does their own thing, you will naturally get a backlash from IT, certainly.
I mentioned to Tucker that I had recently spoken with Steve Betts, the CIO of a large health insurance provider in Chicago, who said this about shadow IT: “The days of demonizing shadow IT I think are well behind us. There is an increasing convergence between solving business problems, and technology … and I think it’s the wrong perspective to try and stop shadow IT. … I actually encourage technology capability in our business units, and look for that strong partnership.” I asked Tucker for his thoughts on that, and he said he would put a slightly different spin on it:
CIOs want to encourage the business to self-serve with the technologies that will equip them to manage their business functions. So that’s the foundation — IT wants to enable the business to self-serve. However, what IT doesn’t want, and the business doesn’t want, is a set of individual, stovepipe business functions going out and doing their own thing, and using different versions of the truth — different business hierarchies, different datasets, and creating all these silos of information that are not connected together, and can’t form the backbone or the spine of decision-making for the business. So shadow IT, in our mind, is a business function that goes off and does its own thing, independent of a centrally managed set of data, best practices, etc.
The bottom line, Tucker said, is that the CIOs he speaks with absolutely want to eradicate shadow IT:
Late last year, I met with the global CIO of a big consumer packaged goods company. She’s been in the job for two years, and her mandate was to try to eliminate the vast majority of 7,000 systems that they had in the business. She had identified that there were shadow IT systems everywhere, and her role was to try to eliminate that. But of course, she was smart enough to know that she couldn’t just go to the business and say, “Stop doing that.” She has to go to the business and say, “Don’t use this system. I’ve got one that you can use, but I’m going to manage it centrally for you, and you’re going to get the right data and metadata, etc.” So we’re having these conversations with CIOs all the time, because these shadow IT processes are all over the place, especially in large businesses. And by the way, they’re also in small businesses. You don’t have to be too big of a business to suddenly have created a bunch of different systems that people don’t share.
A contributing writer on IT management and career topics with IT Business Edge since 2009, Don Tennant began his technology journalism career in 1990 in Hong Kong, where he served as editor of the Hong Kong edition of Computerworld. After returning to the U.S. in 2000, he became Editor in Chief of the U.S. edition of Computerworld, and later assumed the editorial directorship of Computerworld and InfoWorld. Don was presented with the 2007 Timothy White Award for Editorial Integrity by American Business Media, and he is a recipient of the Jesse H. Neal National Business Journalism Award for editorial excellence in news coverage. Follow him on Twitter @dontennant.