The landscape of business IT is rapidly evolving from traditional infrastructure, all located in a centralized data center, to a hybrid model where cloud-based technologies enhance and accelerate business operations. This change goes beyond hardware assets; it includes the software providing core operational functionality. SaaS (software-as-a-service) has rapidly grown in business operations, with organizations averaging 371 different SaaS applications.
However, unlike traditional software deployments where IT helps to set up infrastructure and manage licensing, any business unit can sign up and start using these technologies almost immediately. Once purchased, these units can begin using it almost immediately, with little oversight regarding how they operate. This creates a ‘SaaS sprawl’ of untracked and unmanaged IT, exposing the organization to additional risk.
However, SaaS products acquired in this way do not have to be hidden risks. They can be safely incorporated into the organization without infringing on the freedom of business units to obtain the technologies they need rapidly. This article explores the difference between shadow technologies and business-led IT, providing actionable guidance on how organizations can transform this hidden tech into business enablers.
Understanding Shadow IT vs Business-Led IT
Understanding the distinction between Shadow IT and Business-led IT is crucial in managing SaaS. Shadow IT encompasses IT solutions and systems that are implemented without the explicit ahttps://www.savvy.security/blog/saAs-security-best-practices-for-business-led-it/pproval of the organization’s IT department. This typically occurs when employees or departments bypass IT procedures to meet their immediate technological needs, often leading to a lack of oversight and potential security risks.
On the other hand, Business-led IT involves technology initiatives that are driven and managed by business units but with the awareness or cooperation of the IT department. This approach fosters a collaborative environment where IT supports and guides business units, helping to align technology investments with the company’s strategic objectives while ensuring governance and security standards are met.
Shadow IT within enterprises: Shifting Perspectives
The perspective on shadow IT within enterprises has significantly transformed, shifting from a primarily negative connotation to a more constructive view as business-led IT gains acceptance. This evolution reflects the growing recognition of the benefits arising when business units lead on IT initiatives.
Technology has been a significant driver for this shift. Advancements in cloud computing’s use with DevOps have put the power of development to deployment in business units’ hands. Low-code/no-code platforms have also empowered non-IT staff to develop and deploy solutions that align closely with their specific needs without always relying on IT department interventions. Business units have seen massive gains in faster development cycles, driving more agile business models that better react to the market, making it easy to extrapolate this concept to SaaS.
As a result, Chief Information Officers (CIOs), who once focused on shutting down Shadow IT due to concerns over governance and security, are increasingly embracing these business-led IT initiatives based on tangible business improvements.
Benefits of Business-led IT
Business-led IT offers many advantages that can transform organizational dynamics by closely aligning technology with specific business needs, fostering enhanced productivity, and spurring innovation. This alignment ensures that technological adoptions are directly tied to the strategic objectives of business units, enabling faster and more effective implementation and adaptation of new tools and solutions. For instance, by allowing business units to lead IT initiatives, organizations can tap into a deep understanding of these units’ requirements, thereby boosting the speed and accuracy of technology adoption.
However, while the benefits are substantial, they do not come without risks. Security vulnerabilities, data privacy issues, and technology sprawl can still be significant challenges. These risks are often compounded by potential issues such as a lack of coordination between different business units and the IT department, leading to redundant technology efforts and a fragmented technology landscape within the company. Addressing these risks requires robust governance and a collaborative approach between IT and business units to ensure that business-led IT initiatives deliver net benefits to the organization.
CIOs Drive Change: Decentralizing Governance
As a part of this, the role of CIOs is shifting dramatically from traditional gatekeepers of technology to facilitators who enable and guide business-driven IT strategies. Using a “Federated IT” concept, governance is decentralized, and IT responsibilities are shared across various business units. In this model, CIOs collaborate closely with business leaders, co-owning SaaS apps and other technology assets to ensure they effectively serve the broader organizational goals. This partnership approach allows CIOs to provide oversight while empowering business units to innovate and respond more quickly to market demands.
Instead of controlling all IT aspects, CIOs are expected to support and enhance business units’ capabilities, facilitating technology solutions that align with strategic business outcomes.
Additional Drivers
The increase in business-led IT is propelled by several factors that reflect the changing dynamics of the modern workplace and technological accessibility. It starts with product-led growth (PLG) strategies, such as freemium models and trial offers, which allow business units to experiment with and adopt new software solutions without immediate financial commitments. This exposure enables them to assess the value of these tools in real-time operational contexts before making any investment.
The shift towards remote and highly mobile workforces, coupled with the rise of distributed teams, demands technology solutions that are flexible and accessible across various locations. Evolving operational needs and a reduction in traditional infrastructure accompany these changes in workplace structure. Organizations are pushing toward cloud-based solutions that facilitate a diversely located workforce and make hardware pay-as-you-go rather than outright purchases that rapidly depreciate from the moment they are installed.
The preference for subscription-based models over direct purchases is directly parallel to the cloud-based model for IT infrastructure. Shifting toward subscriptions supports rapid scaling and adjusting of technology resources to meet the fluctuating demands of the business. Organizations pay for what they need as they use it rather than creating a backlog of pre-purchased licenses they “might” use.
Taking Steps to Embrace Business-Led IT Models
In transitioning from shadow IT to a business-led IT model, organizations are taking proactive steps to harness the benefits of SaaS while ensuring governance and compliance. The focus is on integrating business-led IT initiatives into the broader IT strategy as an enabler of innovation rather than merely exerting control. This approach involves a partnership model where IT and business owners co-own and collaboratively manage technology solutions. Moving away from the traditional stance of strict blocking, which often drives users to unmanaged devices and does little to curb technology sprawl, organizations are now favoring a more open approach. This includes gaining visibility into new SaaS adoptions by monitoring email traffic, integrating identity providers (IdP), and utilizing in-browser technology.
Companies can create a more transparent environment by establishing oversight and governance that minimally interferes with the user experience. The process starts with gaining visibility into SaaS usage and implementing appropriate and targeted controls based on the insights gathered. This increase in visibility is crucial as it enhances security and bolsters compliance efforts, ensuring that technology adoption aligns with organizational policies and requirements while supporting dynamic business needs.
Savvy Enables Business-Led SaaS
Savvy empowers organizations to enhance visibility and control over their business-led SaaS environments through a sophisticated, identity-first approach. They enable a comprehensive understanding of the SaaS landscape, identifying existing resources and access privileges. It effectively evaluates potential risks from inappropriate access combinations and reveals concealed business-led IT resources. Additionally, Savvy streamlines compliance processes, ensuring that SaaS security is well integrated with overall operational strategies, thus optimizing SaaS management within organizations.
Learn how Savvy can transform your organization’s approach to SaaS identity security and schedule a demo to see Savvy in action.
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