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The upside of shadow IT

Julia King | April 24, 2012
First, a scary statistic: Gartner predicts that in less than three years, 35% of enterprise IT expenditures will happen outside of the corporate IT budget.

Here's how you can -- and why you should -- lead your technology organization through the transition from "command-and-control IT" to what Hinchcliffe calls "cooperative IT."

Accept the inevitable

At Genworth, the company's trading team is using an outside application developer for certain services. "IT knows about it, but we're not driving it," Murray says, noting that IT doesn't operate at the speed that the trading team requires.

Today, "applications are not done by IT; releases are not done by IT. Instead, [business is] operating in a different sandbox, which requires a different team and a different cycle," he says. Instead of tussling over ownership and control of certain services and applications, Murray says IT focuses on what data the applications use, whether or not an application is mission-critical, and who is in the best position to know the application is running properly.

"The world is changing, and you have to be honest enough to acknowledge that your business customer is sometimes the most appropriate owner of a particular application," he says.

Instead of fighting to retain control, IT leadership should focus on managing risk and learn to spot where employees are adding value with their self-provisioned tools and services, says Brian Lillie, CIO at Equinix, a Redwood City, Calif.-based company that operates large data centers in 13 countries.

Workers in Equinix's vertical marketing group used the Amazon cloud to build what Lillie describes as "a very slick sales tool" that measures network latency around the world, depending on where your IT assets are located.

"My team didn't do it, but I still like to brag about it. It's a key tool," Lillie says. Now, IT is exploring how to integrate the tool into other systems at the company.

"Instead of us throwing up roadblocks, we said, 'Let's enable this and give these guys a way to exploit it,' " he says. "It definitely requires a mind shift [for IT]. "But people are creative and want to innovate, and sometimes real breakthroughs can come from anywhere."

Get ahead of the demand

New York-based Sesame Workshop, the producer of Sesame Street, has more than 100 employees working with outside vendors to make interactive games and toys licensed by the nonprofit organization. They were using cloud and consumer technologies, such as YouSendIt, a digital file delivery service for exchanging large design and video files. CTO Noah Broadwater took notice, and then contacted YouSendIt to secure an enterprise version of the popular service.

The upshot: "IT has become a trusted business partner. It now helps users with contracts," says Broadwater.

The IT group also launched a dedicated R&D group that focuses specifically on consumer technologies and works on projects dealing with how to best leverage Facebook, Google, Twitter and mobile devices. Broadwater is fond of pointing out that Sesame Street character Big Bird has been tweeting for the last two and a half years.


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