Shadow IT in Supply Chains

The predictive optimization of supply chains relies on data that can usually be found somewhere in the company’s existing applicative landscape. However, many of these systems may not be managed by IT as they arose from immediate operational needs that weren’t covered by the ‘official’ systems.

Shadow IT is the name given to IT systems that are created within a company without the explicit approval of the management. Often these systems are installed as the result of exasperated staff trying to do their jobs more efficiently. However, these unofficial data flows can be difficult to maintain and pose a higher risk to data security.

In this episode of LokadTV, we learn more about the why’s and the how’s that give way to these systems being created and try to understand what management can do to stop them from becoming harmful to their organisations.

Modern companies are usually staggeringly complex and often come with equally complex systems (CRMs, ERPs etc.) whilst trying to keep up with a technological landscape that just keeps evolving. This quite often means that the finer details of the business end up becoming neglected.

Rather than being a specific Supply Chain challenge, Shadow IT is a phenomenon that can also affect other departments. Despite the fact that many companies invest a lot in their IT departments, often they still end up struggling and lagging behind the needs of their staff. We delve into the potential security implications and the widespread impact that these Shadow IT tools can have on a company.

Yet in a way, Shadow IT can also be considered a double-edged sword. On the one hand, it does show that a company’s employees care about their jobs, that they’re creative and have initiative. On the other hand, it only serves to render the organisation of the company even more complicated, more difficult to maintain and provides a threat to its overall stability.

To wrap things up, we debate to what extent companies are actually aware of the workarounds that their staff are introducing and learn what management can do to dissuade their staff from taking matters into their own hands in this manner. We also discuss that, despite the fact that it’s rooted in technology, Shadow IT can actually be considered a distinctly “human” issue.



00:32 What exactly is Shadow IT?

02:27 Is this just a specific supply chain issue or something we see around businesses as a whole?

04:39 How does a problem such as this come about? How does it start?

05:29 Why is it the IT departments are so behind the needs of their staff?

07:10 Are companies actually aware of the workarounds that their staff are introducing?

09:22 Is it such a problem? Haven’t users found a more efficient way of working?

11:15 What impact can these tools have on a company as a whole? What about data security?

13:10 What can management do about these Shadow IT systems? Is there anything they can do to prevent staff from being tempted to take matters into their own hands?

15:16 What’s the conclusion today? Is the lesson that as Shadow IT is a human phenomenon we can never truly get rid of it?