Highlights:

  • Business-led IT is an organized strategy whereby an organization consciously purchases and modifies technology solutions from outside vendors to correspond with its particular objectives and processes, frequently under the guidance and supervision of the IT department.
  • Business-led IT can often eliminate shadow IT by promoting transparency. However, assess whether employees will embrace this openness or hide their actions.

Technology, software, or SaaS used by employees outside the central IT or security departments, sometimes funded by business line budgets, is referred to as business-led IT. This approach drives faster innovation, quicker responses to market changes, and higher employee satisfaction.

However, like shadow IT or shadow SaaS, it can present risks by evading security policies and compliance controls, potentially leading to cybersecurity gaps, breaches, unauthorized data access, or compliance issues.

How does Business-led IT Work?

Previously, many companies depended on their internal IT departments to manage and support their digital systems, including IT services for both employees and customers.

However, business-led IT shifts this approach by acquiring external providers’ cloud-based platforms and related technologies. These external companies tailor the cloud infrastructure to align with the business’s specific needs, operations, and goals.

Instead of purchasing software, businesses work with external experts to customize it for specific functions, departments, and deadlines. These specialists focus on each company’s or client’s unique requirements, offering consulting, training, and tools to ensure successful system integration.

While both shadow IT and business-led IT emerge from the need for greater agility and innovation, they differ fundamentally in their approach to governance, risk management, and alignment with organizational goals.

Difference Between Business-led IT and Shadow IT

Business-led IT is an organized strategy whereby an organization consciously purchases and modifies technology solutions from outside vendors to correspond with its objectives and processes, frequently under the guidance and supervision of the sustainable IT department.

On the other hand, shadow IT happens when staff members or divisions use technology independently, without official IT department’s clearance or involvement. While shadow IT can lead to security issues and inefficiencies because it lacks management and integration with the company’s overall IT strategy, business-led IT framework is a concerted attempt to improve business processes.

In a world where technology shapes every aspect of business, it’s crucial for decision-makers to work hand in hand with IT teams to ensure that strategic goals are seamlessly integrated with cutting-edge solutions.

Why should Business Leaders Work in Tandem with the IT Team?

The tech landscape is filled with numerous applications and vendors, often causing confusion while choosing between similar options. While IT departments understand the best software solutions, they may lack insights into the specific problems faced by the business. On the other hand, business users know their challenges well, which positions them to select the right tools or vendors.

When business users and IT departments collaborate, they combine their strengths—business users’ deep understanding of problems and IT’s knowledge of the latest technology. Together, they can identify secure and innovative solutions that align with business requisites.

Given the complexity of large organizations, it’s crucial for IT to be embedded within business units. This proximity allows IT to foresee challenges and proactively implement solutions. Beyond maintaining operations, IT should drive innovation by exploring new technologies that enhance productivity and help business leaders meet their KPIs with a forward-looking approach.

Governing business-led IT is crucial for aligning technological initiatives with business goals, ensuring that IT investments drive strategic value and foster innovation while mitigating risks and optimizing performance.

How to Govern Business-led IT?

Exercising business-led IT involves aligning technology strategies with organizational goals. This alignment ensures that IT initiatives drive meaningful business outcomes and foster innovation across all enterprise levels.

  • Transform the role of IT

The IT department often takes over when issues arise, but this can prevent business users from learning and comprehending the problem, potentially harming their digital skills. Instead, IT should focus on teaching users what went wrong and how to fix it. By coaching business users on potential pitfalls, IT can better educate them on security threats and data protection.

  • Enable users to handle minor issues

IT tasks fall into two categories: small-scale issues that require quick testing and large-scale projects that need enterprise-level scaling. Smaller problems can often be addressed using agile methods, consumer-grade IT, and rapid MVP testing.

  • Follow a data-centric approach

Business-led IT relies on a robust and efficient IT infrastructure. With data being crucial across industries, adopting a data-centric approach and building an agile, secure IT system can drive growth.

Business users, closely connected to customers, best understand their needs. A robust IT infrastructure not only helps meet these needs but also mitigates future security risks like data theft or loss. A data-focused strategy allows the IT department to address potential vulnerabilities, preventing data leaks.

  • Avoid top-down governance

Promoting business-led IT through top-down governance is likely to fail. Instead, starting from the ground up fosters collaboration and ownership, helping employees understand the need for change and increasing support for the initiative.

  • Evaluate governance policies

Revamp your governance strategy to include all employees involved in the initiative. A comprehensive framework for business-led IT will ensure smooth implementation and relieve the IT department of the burden of constant oversight, saving time and money.

  • Develop new frameworks with other departments

With employees from various levels and backgrounds involved, it’s crucial to consider their perspectives while making decisions. Communicate with stakeholders of differing experience levels before establishing processes in related departments like compliance, legal, security, finance, procurement, audit, and IT.

Achieving successful implementation and operation of business-led IT requires a strategic fusion of technological expertise and business acumen, ensuring that IT initiatives align seamlessly with organizational goals.

How to Ensure the Success of Business-led IT?

Here are proven recommendations to help ensure the success of your business-led IT efforts:

  • Promote transparency

Business-led IT can often eliminate shadow IT by promoting transparency. However, assess whether employees will embrace this openness or hide their actions. If the latter is likely, business-led IT may not be the right approach for now.

  • Determine accountability

When decision-making powers are shared between business unit leaders and the CIO, assigning accountability for various decisions is crucial. The CIO’s previous responsibility for all software and technical choices will shift, requiring business leaders to take ownership and be accountable for their technical decisions.

  • Develop a stable framework

Projects should be categorized to determine which should be handled by business unit employees and which by the IT department. Business units can manage simple, non-critical tasks, while simple, mission-critical tasks can be undertaken with IT guidance. The IT department must manage complex, mission-critical tasks to avoid potential issues that could halt the project.

  • Negotiate for new solutions

When an individual proposes a new solution, be ready to evaluate if it’s beneficial or problematic. IT and business leaders should also retain the option to reject the proposal if it doesn’t meet their needs. This approach helps avoid issues and dissatisfaction with new tools and solutions.

  • Develop a training program

Support employees interested in business-led IT by providing training programs that cover technical skills, procedures, risks, and legal aspects. This approach not only smooths the implementation process but also helps identify and nurture talent for specialized areas. Investing in exhaustive training can sustain the long-term success of business-led IT endeavors.

Concluding Lines

Business-led IT is increasingly seen as a critical strategy for companies, as aligning business and technology teams can yield significant benefits. Collaboration between these teams fosters innovation and the adoption of advanced technologies to address customer needs.

Typically, business users leverage cloud-based tools to automate tasks and boost efficiency. Meanwhile, the IT team can ensure these tools are secure, protecting against potential vulnerabilities while supporting business users in their roles.

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