A Practical Approach for IT Governance

Is “Shadow Sourcing” here to stay?

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We have heard of shadow IT (also referred to as “rogue IT”). Shadow sourcing (“Rogue Sourcing”) is a result of shadow IT directly sourcing technology solutions from providers without IT’s approval. I actually prefer the term shadow to rogue, and I also have eShadow Sourcingncouraged CIOs to understand why shadow IT exists and refine the IT approach to meet user needs and focus on less obtrusive IT Governance processes.

Consultants have created a plethora of adjectives to differentiate themselves from outsourcers: smart sourcing, right sourcing, strategic sourcing and the like. Now shadow sourcing? Before the reader frowns, I will freely confess that I created it. Please view me as a career CIO who coined this term and not as a consultant.

To provide a bit of a background, IT is facing the daunting task of delivering more for less. The result is that users (like marketing, finance, operations) are seldom getting their projects done by the internal IT department. Naturally they resort to outsourcers. A very harsh phrase to use, but shadow sourcing refers to IT sourcing by non-IT departments. Of the many challenges with shadow sourcing, the three that kindle their way to the top are: management overhead, higher costs, and lack of a review and credentialing process potentially leading to poor delivery quality.

The way to mitigate shadow sourcing is not to outlaw it, but accept it as a weakness in the IT department in how it is managing user requests. IT governance helps facilitate decision making across all users. This prevents IT from independently making and later being held solely responsible for poor decisions. The guiding principle is to deliver value to the business without injecting onerous controls that stifle productivity. To achieve it, the IT Governance framework should provide complete transparency on IT activities and make it simple for users to make, monitor and prioritize IT requests. In order to achieve transparency, IT management will need to establish controls and processes to deliver quality technology solutions on time and within allocated budgets.

Outsourcing can actually enable effective IT Governance as it provides a scalable resource base to work in conjunction with internal IT resources. IT can transform itself as a nimble service based organization taking advantage of outsourcing. This will significantly mitigate the risks of shadow sourcing.

Written by Subbu Murthy

October 27, 2014 at 3:25 pm

Posted in IT Governance

Tagged with ,

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