'Shadow IT' Spotlights Chasm Between IT & Business to Advance Digital Agenda

Companies of various sizes have trouble competing and disrupting in a software-driven world due to persistent shortage of developers, as well as IT funding that falls short of supporting strategic goals.

That is one of the key findings in a survey, “The “Digital Disconnect: A Study of Business and IT Alignment in 2019,” from Boston-based Mendix, a Siemens business provider in low-code and no-code enterprise application development.

The research, conducted by California-based Dimensional Research, surveyed more than 1,000 business and IT stakeholders in medium and large companies in the United States and Europe. Fifteen percent represented financial services companies.

The survey spotlighted the rise of so-called “shadow IT” — when business teams pursue tech solutions on their own, independently of IT — to deal with the persistent shortage of software developers and inadequate budgeting to successfully implement digital transformation initiatives.

The survey found 95% all respondents agreeing IT’s involvement in strategic initiatives is beneficial. Additionally, 70% of those surveyed gave IT high marks as an enterprise value driver versus cost center. For example, 66% believe in IT’s potential to enable rapid, competitive responses to market changes and to increase employee productivity (65%).

The report noted the alignment between business and IT fades when considering budgeting and operational priorities. In the survey, half of IT professionals believed IT budgets are insufficient to deliver solutions at scale. Conversely, 68% of business respondents do not see any challenges with the funding level. Fifty-nine percent cited the need to support legacy systems as a drain on resources and impediment to innovation. Nearly half of IT (49%) reported difficulties in achieving stakeholder agreement on important business initiatives.

This report noted a shared belief that a huge pipeline exists of unmet requests for IT solutions (77% IT and 71% business), requiring many months or even years for completion. Sixty-one percent said less than half of their requests rise to the surface for IT implementation. Both sides strongly agreed (78%) business efforts to go it alone or undertake shadow IT projects have greatly increased over the last five years.

“While business and IT users agree on the urgent need to advance the enterprise’s digital agenda, they are worlds apart on how to eliminate the backlog and take proactive steps to develop critically important solutions at scale,” Jon Scolamiero, manager, architecture and governance, at Mendix, said.

Scolamiero explained the growth of shadow IT came about because of IT’s perception as a cost center. “Business leaders say they want IT’s help in achieving strategic goals and ROI, but only a small percentage (32%) grasp that current IT budgets are insufficient and inflexible. This disconnect is difficult for enterprises to surface, yet resolving it is a necessary first step in changing the calculus. The research findings point out the barriers that are impeding successful, cross-functional collaboration.”

Nearly all respondents (96%) agreed there is business impact when IT does not deliver solutions. But IT staff feels that impact largely as frustration and a staff morale loss. Business staff, on the other hand, believes these delays lead to missed key strategic targets and revenue reductions, loss of competitive advantage, and other ROI impacts.

“We also see a disconnect on the wish list of digitalization priorities from business, centering on innovations and new technologies that impact ROI,” Scolamiero said. “However, IT feels its hands are tied because the lion’s share of its resources goes to ongoing support issues, including legacy systems, back-end integrations, maintenance, and governance.”

The study revealed the sharpest contrast centers around business users’ preferred solution of undertaking digital projects without IT’s help, going it alone as citizen developers or shadow IT. Business respondents overwhelmingly (69%) believe such action to be mostly good, while an almost identical number of IT professionals (70%) believe it to be mostly bad.

IT is strongly united in its fear that business professionals tackling application development on their own will create new support issues that IT will have to clean up (78%), and open core systems to security vulnerabilities (73%). To underscore their concerns, 91% of IT respondents said it is dangerous to build applications without understanding governance, data security, and infrastructure compatibility guardrails.

However, there is virtually unanimous agreement (99%) that capabilities such as easy integrations, fast deployment, easy collaboration — which are inherent in low-code application development — would benefit their organizations. Scolamiero added low-code, when done right, solves much of the shadow IT problem by enabling people on the IT side and the business side to come together and make revenue-generating solutions faster than before.

The low code development movement involves automating manual processes. No code platforms employ visual application systems permitting users to build apps.

The survey found business users familiar with low-code’s capabilities had aggressive plans for adoption (90%); and more business executives (55%) than IT executives (38%) believed their organization would achieve significant business value by adopting a low-code framework.

“Enabling meaningful collaboration to bridge the gap between business and IT is one of the main reasons we founded Mendix and developed our unified low-code and no-code platform,” Derek Roos, Mendix CEO, said. “Years of budgeting and managing IT as a cost center has led to a crisis in business. Business and IT leaders must redefine teams and empower new makers to drive value and creativity and become top-performing organizations.”