For decades CIOs have been fighting shadow IT organisations within their companies. The widely accepted view was that everything relating to IT needed to be controlled centrally by the CIO and his/her IT organisation. This was justified by risk mitigation, cost optimisation, avoiding duplications and chaos, standardisation etc.
While costs might have been optimised by centralising all of IT, the downside was that speed, innovation power and closeness to the business suffered from such an approach. This is what CIOmover Patrick Naef says about his suggested topic for Ireland. Shadow IT teams, by contrast, are typically much closer to the business – in fact are fully embedded – and they understand the business better than centrally shared IT organisations and are much faster and nimbler due to their small size and limited overhead. Maybe shadow IT teams should be seen as more of a blessing than a curse, as long as CIOs are open to collaborating with them. The fact that business leaders support and defend shadow IT teams shows that they do care about IT and see it as an essential and strategic component of their business, and this is not a bad thing at all.
Patrick believes that the time of large, centralised IT organisations that control all of IT throughout the company is over. With companies and their products/services becoming more digital, ownership over IT must move (back) into the business as a strategic part of the business. Innovation through technology should take place at all levels and be as close to the business as possible. Therefore, shadow IT teams are best positioned to innovate through technology, since they sit right at the heart of the business.
However, simply distributing IT teams back into the business units in the traditional hierarchical structures and accepting duplication, inefficiencies and incompatibilities can’t be the answer. Rather, in the network age, we need to move away from traditional hierarchical structures and create a networked structure of IT professionals throughout the organisation who work together towards common goals and are driven by a common purpose rather than focus on reporting lines. This is comparable to the way agile squads are organised and work effectively together. These teams are comprised of members from different organisational units (in the traditional hierarchical sense), are driven by a common purpose, work towards common goals, mostly manage and organise themselves and don’t worry about reporting lines and hierarchical company structures.
However, the role of the CIO needs to fundamentally change from controlling IT as an operational unit to becoming a catalyst and network leader, enabling the business to become digital. The CIO also needs to actively move away from traditional hierarchical thinking and be a role model for a networked organisation. It is not the size of the IT organisation or the amount of the IT budget that defines the importance of IT and the CIO but rather the added value that the CIO brings and the impact that he/she can have on the company’s stakeholders, i.e. the business, employees, customers, environment, etc.
CIOs need to be able to collaborate with shadow IT teams across the company, benefit from their closeness to and understanding of the business and profit from their agility and innovation power, let go of the view that all IT resources need to be managed centrally, while not compromising cost or security or drifting into ungoverned chaos.
Patrick has dealt with this topic in much greater detail in his book ‘The Technology Illusion: The Demystified Myth of Digital Transformation.’ Patrick devotes an entire chapter to this topic in the book.
The book states:
‘The digital revolution challenges us to think outside the box of the familiar. In a world that is changing faster than ever, CIOs are challenged more than ever. This book invites you to rethink the role of the technology leader. What does it mean to be successful in an era of constant disruption? How can we use technology not only to optimise processes but also to create new business models? Discover new perspectives and challenge established ways of thinking. Draw inspiration from the stories of successful companies and actively shape the future of your organisation. This book is not a recipe book, but a thought-provoking read for anyone who wants to shape the digital transformation.’
At the moment, only the German edition is available: https://www.orellfuessli.ch/shop/home/artikeldetails/A1074791887 (Switzerland) or DoD Buchshop in Germany: https://buchshop.bod.de/die-technologie-illusion-der-entzauberte-mythos-der-digitalen-transformation-patrick-naef-9783759758163.
Patrick has told us that he is working on the English edition. It will probably be available from May, so before our CIOmove to Ireland. We’ll keep you posted!