Dec 13, 2018

What is Shadow IT, and Why Should I Care About It?

Shadow IT has been around for years, and just like technology, the scope of Shadow IT has evolved.

Shadow IT refers to any device, application or IT initiative that happens outside of the visibility, control, or management of IT. But while shadow IT can grow and develop on-premises, the ease and flexibility of cloud services means that shadow IT spreads further and faster in off-premise solutions and applications.

What is Shadow IT | Aspera Software Asset Management

Cloud computing expands shadow IT scope

On-premises installations usually require administrator permissions, passwords, and support. This means that at some point in the process, usually very early on, IT will become involved in deploying, discovering, or managing the software.

But the increasingly fast growth and adoption of Cloud and SaaS software and services among organizations means that Shadow IT is becoming increasingly front and center for Software Asset Management. Unless they are a hybrid solution, cloud services do not require the same intervention and support (at least not early on) as on-premises installations.

Shadow IT or “Shadow Cloud” (as the case may now be) can now be as small as a single employee purchasing subscription software with the company credit card, or as large as an entire business unit selecting and adopting a new SaaS solution without consulting IT.

Why should I care about shadow IT?

The problem with shadow IT is not its existence, but its size. If you don’t shine a light on it, it will grow like a weed in an otherwise well managed garden. While you want your organization to have the flexibility to respond quickly to their changing business environment, you still need to be able to plan for and control costs.

Unaligned cloud service adoption can lead to:

  • Duplicate SaaS purchases
  • Redundant SaaS Services
  • Unused and under-utilized licenses
  • A proliferation of associated fees
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Is shadow IT something to be afraid of?

No. Shadow IT is simply one result of when business needs, rather than IT processes, drive technology purchasing and deployment decisions.

However, if you don’t begin to manage Shadow IT, things can get out of control fast.

If it isn’t already, shadow IT can quickly become a costly and complex problem for Software Asset Managers to deal with (on top of all the other fun problems you are already trying to solve).

How should I manage shadow IT?

This is a little more challenging. If you’re facing communication silos in your organization, then overcoming those silos can be your biggest hurdle. Regularly engaging with stakeholders about software purchasing can help reveal shadow IT and lead to better software license management.

Here are 3 strategies you can use to manage shadow IT in your organization:

What is Shadow IT | Aspera Software Asset Management

1) Find shadow IT

I don’t know a single employee who would use their own money to buy software for work. This means there is always a money trail. Expense reports and credit card bills can tell you about recent software purchases. This will help narrow down which cloud platforms are being used within the organization.

2) Develop policies 

Too many organizations have antiquated policies relating to software. Most of these are governed by spend maximums (i.e. if the software will cost more than $500, then IT must be involved). This simply does not work with most cloud services, especially ones with lower ‘monthly’ fees that fall under the thresholds set by older policies.

If your policies did not need updating for cloud services as a result of the GDPR new world, then they almost certainly need a review in the face of this new ‘SaaS world order’. Your job is ensure your policies are changed to ensure effective management, while not constraining the innovative impulse within your organization.

Mandated reporting of new software purchases (after the fact) will help keep all stakeholders in the loop and allow your business units to acquire new software without having to cut through red tape.

3) Implement a software license management tool

While the problem of shadow IT appears like a new bigger, scarier, and more costly strain of last year’s flu, the solution is fortunately a familiar one. Get a SAM tool. A software license management tool and an IT asset management tool are your first and best lines of defense against the SaaS spend surprise. These tools can give you the insight and information into your IT environment, both on-premises and in the cloud, that you need to manage and control license purchasing.

What next?

Now that you are more informed about the issues with, and management strategies for shadow IT, you can face this problem head on with an informed approach. By applying the tools and strategies you already have in your arsenal and getting a Cloud Software Asset Management solution, you can shine a bright light on your IT environment and get rid of the shadows.

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Topics: ITAM/ITSM, SaaS, SAM 101, SAM Education