Employees often believe that they can get more work done by going outside of their company-sanctioned IT. Using more familiar tools and systems, they think, can help them save time. This practice is what IT experts call “Shadow IT.” Although shadow IT might help your employees accomplish more tasks in the short term, the practice can give rise to a plethora of challenges in the long term.

 

Heightened Security Risks

When your employees access, store, and process business data and sensitive information outside of your IT department’s sanctioned systems, it poses a heightened security risk to your organization. External systems often are ungoverned, decentralized, and typically do not provide any visibility to your organization – including your executives.

Those factors put your company at a significant risk for a data breach. As Gartner’s Christy Pettey points out, your liability for a data breach “can be very large due to… costs that include notification penalties, auditing processes, loss of customer revenue, brand damage, security remediation, and investment, and cyberinsurance.”

Those costs have the potential to destroy your business, so you must get your teams on board with the need to stay with company-sanctioned IT tools. When there’s so much to lose, the short-term gains in productivity that your employees might realize by using unauthorized tools simply aren’t worth the risk.

 

Wasted Investment in IT

IT systems represent a considerable investment of your company’s finances. If your employees don’t use what you paid for, you aren’t getting any return on that massive investment.

However, if your initial IT investment is outdated, as Jill Dyche points out in her Harvard Business Review article, it’s no wonder your employees go over your collective heads to get work done. When you’re still on a legacy system, maintenance takes up the lion’s share of your IT department’s workday.

Although, it might be the case that departmental silos and fears about the cost of modernization hold your C-suite back from learning the whole picture, Dyche contends. Instead of investing the extra funds that modernization would require, executives pinch pennies, causing a slow bleed in the company’s bottom line.

Without a decent knowledge of the benefits automation, cloud-native computing, and other IT improvements could bring to the company’s ability to innovate, company executives will remain stuck in the last decade’s technology while other, more agile companies will pass them up.

Business owners and management personnel owe it to themselves – and their investors – to tear down departmental silos and learn what drives success for other parts of their business.

 

Lower Productivity

Though employees who use shadow IT believe themselves to be increasing their productivity by using technology outside of your company, reality tells a different tale. When employees use multiple cloud apps as opposed to company systems, they often duplicate data, leading to confusion or wasted time.

Secondly, each of the consumer-grade applications and platforms they are likely to use often provide incomplete information. That means that they will likely spend more time looking for the information they need, taking time away from productive tasks.

With a comprehensive, company-approved source of information, however, employees will not have to shift back and forth between applications and platforms. All the information they need will be at their fingertips.

The result: increased productivity and a cohesive workforce. When you eliminate shadow IT, your productivity – and your profits – will likely rise to new heights.

 

Employee Disengagement

One of the most massive effects of shadow IT, however, is employee disengagement. When employees see that their company holds them back by not providing the technology they need to do their jobs most efficiently, they’re likely to look elsewhere for it.

That “elsewhere” might happen to be shadow IT – which carries with it all the negatives we’ve already discussed. If your employees are dissatisfied enough, that “elsewhere’ might be another employer.

According to Forbes’ Bill Connerly, the cost of just one frustrated employee leaving your company is massive. When an entry-level employee leaves, statistics show that it costs 50 percent of their salary to replace them. For mid-level employees, replacement costs companies 125 percent of their salary, while for senior executives, the cost runs more than 200 percent of their salary.

Compared to the costs of losing your workforce, keeping your employees supplied with the tools and technology to do their jobs to the best of their ability is one of the most prudent decisions you can make. After all, your employees are the lifeblood of your business. Without them, your organization cannot function.

 

The Solution: Establish a Collaborative Culture to Equip and Empower Your Workforce

Lack of suitable IT is only a symptom of a more widespread problem – a siloed culture in which your technology leaders, senior management, and your other departments ignore the fact that there are other teams whose data and expertise can help them do their jobs better.

 

Tear Down the Silos

Company leaders must, rather, begin a dialogue among your IT team, your leadership team, and all the other teams in your organization. Senior management must be willing to make an effort to understand each team’s challenges, needs, and desires. Encourage collaboration as you break down the walls of those silos that hamper innovation.

CIO’s Jeffrey Bannister suggests that IT teams “embrace” shadow IT not by affirming its use but rather by taking a critical look at the “weak spots” in your company’s current IT infrastructure that caused employees to turn to outside sources in the first place. Only with dialogue with your tech-deprived employees, though, will you uncover those weaknesses.

If, for example, a shadow IT application works more efficiently than your current app, consider tossing out the current app and adopting the formerly shadow IT application company-wide. Keep your virtual nose to the ground – and when employees state their frustration about certain aspects of your IT, use that frustration as a springboard to find a better solution.

 

Educate and Communicate

At the same time, your IT team must become “educators,” Bannister points out, teaching employees about the security risks inherent of going outside of official IT channels, as well as other downsides of using shadow IT. When you keep everyone on the same page with open dialogue and a problem-solving approach, your employees will take on a sense of ownership in the company’s mission.

 

Empower Employees to Innovate

When you empower your employees with a sense of ownership, they’ll not only be one of the 30 percent of the country’s employees who are engaged on the job, but they’ll be likely to furnish your company with the kinds of ideas that will take your company to the forefront of its industry, points out Marketing Insider Group’s Michael Brenner. Instead of using shadow IT on the sly, they’ll be likely to bring the benefits of new tools to your IT team’s attention, helping build not only their own engagement but that of their fellow employees as well.

Most importantly, these newly engaged employees – empowered with the technology they need to do their jobs well – will likely become more enthusiastic about their work. Instead of putting the company at risk by using untested tech, they will build potential customers’ trust in your brand and its products well beyond the reach of your company’s official channels. For companies to rise to the top of their industry, that kind of trust is priceless.