Op/Ed: Three Reasons for CIOs to Love Their Bank’s Shadow IT

There’s no doubt that shadow IT, the term used to describe the systems and solutions for Information Technology that are installed and used in organizations without the explicit authorization of the company, poses a real and urgent risk to banks. But shadow IT can also be a boon to the bank in many ways, because it is an important source of innovation for the future of the organizations that implement systems internally, as has happened with applications such as Google Docs, file transfer using Skype, among others.

In particular, there are three good examples of how shadow IT can actually serve as a benefit to many banks:

1. It allows for a better use of resources. CIOs and their IT experts can give up a losing battle and instead embark on successful pursuits. Total control of enterprise IT is no longer the CIO’s job, collaboration is. Unless you are the rarest of banks, your IT has already been “consumerized,” and it’s not going back.

Employees of all ages and cultures are comfortable trying out new applications to help them be more productive. They use the devices they choose, often multiple devices. Describing a bank employee who routinely travels with two iPhones, an iPad Mini, and a Wi-Fi hot spot is probably not describing anyone unusual or unique.

Your bank’s business leaders are pursued by special vendors in that business line to adopt their applications. Gartner estimates that by 2017, chief marketing officers will be spending more on IT than CIOs. Throwing up obstacles is a waste of IT resources and attention.

2. It encourages empowerment and innovation. Some CIOs choose to think of shadow IT as outsourcing technology innovation to their own trusted internal partners. A recent article describes how one major CIO “has turned her 5,500 person IT team into an approachable organization that employees want to come to with ideas – a model that naturally chases out shadow IT, a top concern of many CIOs today.

When business leaders and individual workers are choosing their applications, there’s a pretty good chance they know best exactly which ones will best serve their needs. It is virtually impossible for IT people to have the same depth of knowledge about the business issues. Why force them to use something they think is inferior or delivers just average performances, unless there are powerful security and compliance issues with their choice? After all, people who are empowered to do things their way are known for performing better. Not empowering them is just a different kind of risk.

3. It creates a better role for IT. For years organizations have been trying to “bridge the IT/business divide.” Shadow IT creates the right environment for finally making that a reality. With all the technology and experimentation going on across the enterprise, it’s impossible to predict where new breakthroughs will occur. IT can focus on creating a culture that actively seeks to learn where employees are adding value with applications of their own choice. Very often, those breakthroughs are taking place at the far periphery of the organization, where people have problems that they need to solve in hours, not weeks and months.

When these breakthroughs are identified, IT can bring these accomplishments into the open and enable the employees to extract additional value, and while they are doing so, also solve for security and compliance concerns.

CIOs who have done so report that once IT gets a reputation for working with the shadow IT acquirers, other users come out of the shadows and look for assistance. IT gets to redefine its role as a partner to the businesses, as well as an educator and policymaker.