The results of a recent survey out of Europe may be a good indication of changes that are coming concerning shadow IT and its impact on company spending.
Shadow IT is money spent on Information Technology that is not spent by the IT department itself.
The survey was commissioned by London based Atos and its cloud business Canopy and was conducted in September 2014 by an independent research firm. It involved interviewing 75 CIOs, 75 CFO’s and 50 Business Decision Makers (BDMs) in four key markets (UK, Germany, France, and the US) plus 50 CIOs, CFO’s and 50 BDMs were interviewed in the Netherlands. These individuals were in various businesses such as IT, telecoms, manufacturing, professional services, financial services (including insurance), transport and travel, utilities, logistics and consumer services.
Some of the key take-away items from the survey include:
- 60% of CIOs indicated shadow IT spend in their company was approximately 13 million Euros or $14.1 million USD.
- 51% of BDMs stated that 5-15% of their IT budget was being spent on shadow IT, an estimated 8.6 million Euros or $9.3 million USD.
- On the US side of this survey the total spent on Shadow IT is 26 million Euros or $28,169,706 USD double their European counterparts.
That money is being spent in several different areas:
- 36% on file sharing software
- 33% on data archiving
- 28% on social tools
- 27% on analytics
The primary reason for shadow IT, according to 37% of those interviewed, was the IT departments inability to test and implement new capabilities and systems in a timely manner.
“Surprisingly, shadow IT is being spent on back-office functions – areas which for most businesses should be centralised and carefully managed by the IT department,” said Philippe Llorens, CEO of Canopy. “This finding shows that stronger governance is still required in most IT departments. As businesses embrace digital, it is essential that the IT department not only provides the IT infrastructure and services to enable and support the digital transformation but also the governance model to maximise cost efficiencies, manage risk and provide the business with secure IT services.”
“As businesses become accustomed to operating at digital speed, using IT to enhance customer experience and top-line revenue opportunities, the IT department must be ready, both in terms of technology and governance, to support short term projects and accelerate the development of cloud native applications to improve service and increase customer spending,” concluded Philippe Lllorens.
Do you see similar issues in your companies that create an environment of shadow IT as well?
