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SMBs Say Shadow IT Efforts Create Positive Financial Impact

Despite risks associated with rogue IT projects, most SMBs report improvements to productivity and technology effectiveness, according to a new report from Capterra.

Shadow IT is any software, hardware, or other resource used on a network without the approval of the IT department and usually without its knowledge or oversight.

Shadow IT teams, also known as rogue IT teams, are the people who run those shadow resources. They have grown in popularity in recent years due to the rise of cloud-based apps and remote work, but this has led to operational tension and security risks within many businesses, say the study’s authors.

According to Capterra’s 2023 Shadow IT and Project Management Survey, 58% of small and midsize businesses (SMBs) have experienced high-impact shadow IT efforts outside the purview of their official IT department.

Financial Benefits Of Shadow IT Teams

Half of SMBs say shadow IT teams are most commonly formed because there’s a lack of understanding among employees about the process for acquiring new technology. This is closely followed by 41% of SMBs that attribute it to a perception that the IT department is too slow or cumbersome, and by another 37% who say an incubator team was created with a senior manager’s approval but without the IT team’s awareness.

Despite potential short-term negative impacts, SMBs have reported both financial and productivity improvements as a result of shadow IT teams. In fact, 80% say that shadow IT efforts have ultimately contributed to a positive financial impact in the long run. Businesses have also attributed these initiatives to higher productivity.

Integrate Shadow IT Efforts

Olivia Montgomery, associate principal analyst at Capterra, commented:

“As more tech-savvy employees find new ways to make work better, SMBs will need to not only have policies and procedures in place to guide them, but also foster a collaborative culture. “Businesses should embrace the innovative spirit deriving from shadow IT efforts while also taking a proactive approach in minimizing risks.”

To strike this balance, SMBs should consider developing a structured plan for integrating shadow IT efforts safely into their business while educating workers on the risks involved in these initiatives, the authors say.