RESEARCH & RESOURCES

The Changing Role of (Shadow) IT in BI

IT can no longer expect to justify projects on the basis of their value to its own performance or operations. Instead, projects and spending initiatives must be yoked to business priorities.

At the 14th annual Pacific Northwest BI Summit, held this July in Grants Pass, Ore., industry luminary Jill Dyché spoke about the thoroughly modern -- and increasingly protean -- IT organization. Dyché, a vice president of best practices with SAS Institute Inc., led a lively discussion about the ways IT and the line of business are -- after years of figurative (if nerve-wracking) detente -- coming to terms with one another. The exigence for this is shadow IT, according to Dyché.

"I had written a blog post for the Harvard Business Review called 'Shadow IT Is out of the Closet,'" Dyché told attendees, referring to a 2012 article in which she assessed the pros and cons of shadow IT, a phenomenon whereby the line of business claims ownership of (and, stingingly, at least from IT's point of view, receives funding for) its own IT assets and/or resources.

"Shadow IT has burst out of the closet and is waltzing around the corporation, leaving IT departments rushing to do damage control," she wrote in her article.. "Lines of business are now getting their own official technology budgets for non-standard software products. Departments can automate a business process in the time it would take to enter IT's development pipeline. Shadow IT has been freshly-labeled 'departmental IT.'"

Three years on, shadow IT's acceptance is a fait accompli. It isn't going anywhere. This precipitated a radical reconfiguration of the status quo, with the result that IT organizations have had to recast, reinvent, and -- in a sense -- re-justify themselves. In practice, this has meant hashing out questions of ownership -- not only vis-à-vis the line of business and shadow IT but with cloud and external services providers, too -- as well as relinquishing traditional perquisites.

This isn't always a bad thing, however. In some cases, Dyché noted, IT leaders are happy to cede areas of responsibility or operations to the line of business -- or to assign them to external (cloud or external services) providers -- as well as to take on new roles. In others, she conceded, this reconfiguration has diminished the influence, prestige, and perquisites of the IT organization.

The material point, she argued, is that IT can no longer expect to justify its projects or spending initiatives on the basis of their notional or putative value to its own performance or operations; projects or spending initiatives must, instead, be yoked to specific business priorities.

"There's a temptation ... to wrap all of this [discussion about IT projects or spending initiatives] around a[n IT] modernization conversation," she observed. "A lot of IT leaders will try to justify some of these initiatives in terms of IT modernization, and IT modernization, as important as it is, may or may not be the right context for justifying some of these nascent initiatives, like the digital enterprise [or] like resuscitating an analytics program that is meaningful for the business."

Earlier this year, Dyché published a book about this reconfiguration, aptly titled The New IT. That book explored the changing roles and responsibilities of IT organizations in the context of shadow IT, cloud, self-service, and other destabilizing forces. In researching The New IT, Dyché uncovered an ironic phenomenon. In many cases, she said, shadow IT organizations have discovered that designing, implementing, supporting, and maintaining IT infrastructure is hard stuff.

One upshot of this, she reported, is that shadow IT teams are re-gifting IT resources or assets back to in-house IT. Another is that business leaders are increasingly holding shadow IT and the line of business accountable for their spending decisions. In her presentation at the Pacific Northwest BI Summit, for example, Dyché cited the case of one such business leader, Comerica Inc. executive vice president Paul Obermeyer, whom she profiled in The New IT.

"Fifty-two percent of business people now say they're solving their own technology needs. That's a fact of life," she told attendees. "Paul Obermeyer ... understands that shadow IT is a reality … but he actually has a dashboard [so] that when a line of business makes an IT investment over $50,000, he gets a message sent to his dashboard. It allows him to cast a net out to the business and say, 'What problem are you solving that IT hasn't been solving for you?'"

Throughout The New IT, Dyché argues that the IT of today finds itself slotting into one of six "archetypes" -- from IT as "broker" to IT as "order taker" to IT as "data provisioner."

At the Pacific Northwest BI Summit, she described a scenario in which an IT organization both identified with and, more important, touted its performance in its new role -- in this case, that of data provisioner. "IT organizations that have had seminal success with data provisioning have been celebrated for getting new data into the business in a timely way," she said. "[They're saying] we might be that central focal point of data provisioning, not just for analytics ... across these business units. Maybe this is our forte ... maybe this is where our value proposition lies."

Donald Farmer, vice president of innovation with self-service business intelligence (BI) specialist Qlik Inc., said he's observed this phenomenon among Qlik's own customers. "We call this the move from being gatekeepers to shelfkeepers," said Farmer, in response to Dyché's point. "IT promote their goods. One of the things we recommend is that they need to have an internal marketing budget for doing this. If you're going to be a provisioner, you've got to promote this provisioning."

Dyché agreed. "There's missionary work endemic in this because ... this [change] has to be proselytized," she said. "It's a change in the brand, and in any brand you have to do that."

TDWI Membership

Get immediate access to training discounts, video library, BI Teams, Skills, Budget Report, and more

Individual, Student, & Team memberships available.