Early this month I visited a friend who heads IT department in a leading Trading company. He looked pensive and asked “Without my knowledge our finance department has purchased a cloud based finance system and given me a login Id – what should I do?
In a survey by IDC of CIOs across the globe found that around 45% of technology spending undertaken by organizations is now drawn from budgets outside the IT department. This typically represents a mix of business-funded technology projects where the relevant line of business works hand in hand with the IT department (28.5%) and those that the IT department is aware of but plays no role in (16.8%). However, there is a third type that is potentially disruptive to the ROLE of the CIO — Shadow IT.
“Shadow IT is a term often used to describe IT systems and solutions built and used inside organizations without explicit organizational approval. It is also used, along with the term “Stealth IT,” to describe solutions specified and deployed by departments other than the IT department … shadow IT solutions are not often in line with the organization’s requirements for control, documentation, security, reliability, etc.…”
Simply put, SHADOW IT is spending on technology that is UNKNOWN to the IT department. Shadow IT is driven by
- IT suppliers that are directly targeting business users bypassing the IT department.
- Business owners demanding that IT projects are implemented at a much faster rate than their own internal IT departments can possibly deliver
- BYOD – Bring Your Own Device
- Free or Minimum initial investment (Subscription model)
Having said that the indirect cost of Shadow IT is 4 – 8 times higher than the visible cost such as increased risk of data loss, bandwidth latency, Vendor management and so on. Hence CIO can either play OSTRICH – hide the face and pretend Shadow IT does not exist or an EAGLE, blanket a controlled process over Shadow IT.
Solution: “CIOs can’t transform their old IT organization into a digital startup, but they can turn it into a bi-modal IT (Concept coined by Gartner in early 2014) organization,” wherein CIO creates two modes of IT called Bimodal IT. It is the practice of managing two separate, coherent modes of IT delivery, one focused on stability (Mode – 1) and the other on agility (Mode – 2) .
Mode 1: is TRADITIONAL and sequential focused on safety, accuracy, rigour & efficiency. A safe IT within the organization.
Mode 2: is EXPLORATORY and nonlinear focused on agility, speed, information & innovation. It fills the divide between traditional and what business needs now from Technology.
In other words, bimodal IT allows organizations to embark upon their digital journey without disrupting what already exists. And to progress on the road to Bimodal IT follow the three steps process …
- First Step – take inventory of your cloud services using services such as Cisco Cloud Consumption Services.
- Next Step: Mode 2 teams sit alongside, and augment, Mode 1 teams, allowing each to focus on what they do best.
- Work on four 4 Ps (Portfolio; People; People & Platform) to successfully developing the Mode 2 capabilities to drive digital innovation ….. “ How to Implement Bimodal IT: focus on 4Ps”
Bi-Modal IT requires shift in CIO’s mindset towards how IT is consumed and develop leadership and organizational approach that can handle two modes of IT parallel. Finally CIOs must stay informed of new and disruptive technology that could help one of their company’s business units.