Partnering with Your Business and IT Leadership to Address Shadow IT

The IT and procurement departments used to act as the gatekeepers between a company and its third-party software solutions. Although these teams still serve a critical role in major purchases, technology vendors are now marketing their products directly to end users.

As a result, many end users are buying features and products without the IT department’s knowledge. This shadow use can increase costs for companies, and it can also compromise security.

Here, we’ll explore how procurement can partner with business and IT leadership to address "Shadow IT.”

What is Shadow IT?

Shadow IT is the use of technology by employees or departments without explicit organizational approval. It often arises when users purchase, install, and use software applications on their own to solve a particular problem or fill a specific need in the organization.

Departments with discretionary spending budgets may inadvertently divert resources toward the acquisition of these products. Furthermore, these types of acquisitions can lead to risks such as data privacy and security issues, as well as missed opportunities for cost savings and improved efficiency.

Shadow IT has become increasingly important for organizations to track, manage, and secure due to its potential for misuse or abuse. However, it can be difficult to manage without cooperation between procurement, IT, and business leadership.

Identifying the Causes of Shadow IT

Shadow IT typically occurs when an end user, such as an employee, needs a solution to solve a problem in their work, and it is easier for them to acquire a solution on their own rather than take the issue to procurement or the IT department within the organization.

For example, a company could use a type of legacy software for a specific function. Users who feel that the software doesn’t provide them with the functionality they need may take it upon themselves to use a different type of software on their own.

That means company data could be transferred to that software without the knowledge of IT or business leaders. If the user has the right access and permissions, they could even spend company funds on the new software.

Shadow IT can also occur when policies relating to software applications aren’t clear. Employees are often given a certain amount of autonomy, and they may believe it is acceptable for them to go outside regular procurement processes to get the solutions they need.

Addressing Shadow IT Through Cooperation and Policy

Procurement, IT, and business leaders can work together to reduce shadow IT by implementing policies that provide clear guidance on the purchase and usage of technology applications. These policies should be easily communicated to all employees and should emphasize the importance of using approved applications whenever possible.

Procurement teams are also in an important position to monitor instances of shadow IT spending. They can use automated tools to track software purchases across the organization, while IT teams can provide easy access to required software platforms or applications.

Business leaders should ensure that employees are given the necessary training or support for all app-related tasks. It could also help to obtain employees’ opinions about the company’s current technologies. If employees are unhappy with a specific technology, it may be time to replace it—this could help prevent employees from acting on their own to acquire a more preferable technology.

Learn More at ProcureCon IT Sourcing

Shadow IT is a complex problem that can be difficult to address in large organizations. However, with a concerted approach, business leaders can reduce unauthorized spending and risk by helping employees make the right decisions about technology.

To learn more about how your company can address shadow IT, don’t miss the ProcureCon IT Sourcing event happening from June 26th-27th at the Marriott Copley Place in Boston.