Business Technology Is NOT Shadow IT Spend

Often I hear from clients or read in industry publications (including those by my Forrester colleagues) that the business is spending more on technology. They almost always refer to this spend as “rogue” or “shadow.” But this phrasing shows a perspective from sourcing and other IT professionals that is parochial and, worse, dangerous to their ability to collaborate with those business stakeholders.

Why? Because saying that the business’ IT spend is shadow spend implies that they are taking something from the IT group. However, the reality of the situation is that business buyers like CMOs are buying what they always bought – advertising, marketing tools, database list management, for example. The difference now is that all of those things are now technology-dependent. Any CMO or other executive buying these offerings has a very logical question when asked about bringing in IT – “what makes IT think they know more about this stuff than I do?"

Still not sure if the business is actually engaging in “shadow IT spend?” Here are a few questions to ask yourself:

  • Is this a product category or supplier IT has experience with? Most IT SVM teams haven’t negotiated with digital agencies like Ogilvy or TribalDDB before. Also, note that if it’s a division you haven’t worked with, the answer to this question is still “no.” – such as when your company’s supply chain team is working with PwC’s risk team – but you’ve only ever worked with PwC’s IT strategy group. This then validates the business users’ view that they’re better placed than IT SVM to do the negotiation because of their knowledge of the vendor and its solution.
Read more