Why smart companies are embracing shadow IT — Jeanne Ross

Jeanne Ross, Director & Principal Research Scientist at the MIT Sloan School's CISR

Jeanne Ross, Director & Principal Research Scientist at the MIT Sloan School’s CISR

From Hewlett Packard Enterprise

Companies have no end of opportunities when it comes to spending their technology dollars. And over the years, individual business units have become adept at making their cases for the IT projects they want funded.

But according to our research at MIT Sloan School, top-performing companies are bypassing nice-to-have projects in favor of absolutely must-do ones by focusing on their most strategic opportunities for business transformation.

Practically speaking, this means narrowing down the programs that get funded to just a handful—and rejecting proposals for any IT projects that don’t advance one or more of those programs.

We call this “demand shaping.” Demand shaping is the process of negotiating and learning that goes on within a company as it identifies its most valuable and achievable business-change opportunities, and decides which IT programs will best support those opportunities. (Read my HPE Business Insights article “Don’t satisfy demand for IT services—shape it instead” for more on this process.)

But what about the projects that don’t get funded? Isn’t there a risk that they will just be driven underground, contributing to the ever-growing shadow IT challenge companies face today? Shadow IT, of course, is what happens when technology is brought into an organization without IT’s permission or knowledge. Some estimates put shadow IT expenditures as high as 30% of official IT budgets.

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