Low-Code and digital innovation

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How to avoid wasting 40% of your budget on Shadow IT

Low-code | Shadow IT | WebRatio Platform
How to avoid wasting 40% of your budget on Shadow IT

Shadow IT, also called “Stealth IT”, is the practice of creating applications without the engagement of the company’s IT department[1] .

It is very common among staff members who do not belong to the IT department because they are often dissatisfied with the speed of development of digital solutions or they do not believe it is worth engaging developers in the creation of simple solutions using, for example, spreadsheets, databases and personal interfaces. In other cases, the desired applications can be found online, such as data sharing services, PDF creation, graphic manipulation, email distribution, or contact management.


The security risk of Shadow IT

The greatest risk of creating applications or using online services without approval from the IT department is possible data leakage due to noncompliance with security policies.

In fact, 79%[2]  of employees say the greatest danger of Shadow IT is data security, because in 83%[2] of cases, the company’s data are saved in cloud solutions of which the IT department is not aware.


“For 3 out of 4 people by 2025, Shadow IT will be the greatest risk to corporate data security” [2] 


Other risks derive from the possible turnover of personnel, technological advancement and the increase in a company’s business. Spreadsheets, such as personal databases and the logic contained in them, can be lost in the inheritance or no longer usable by those who receive them because the expertise to use them properly is lost when the collaborator who carried out his or her personal application leaves the company.

Because the IT department’s quality processes do not manage Shadow IT, in the case of technological advancement, personal applications built with previous systems may no longer be usable with new versions of operating systems or hardware, thus making the data no longer accessible.

Finally, when the company’s business grows, the data stored in personal databases become so much that the situation becomes unmanageable, causing information losses, blocks and errors that can distort the results of the analysis.


The costs of Shadow IT

Shadow IT is estimated to be worth 40%[3]  of the budget allocated for IT solutions, and 80%[4]  of respondents admit they use solutions not approved by IT departments.

But not all evil comes to harm, because the creation of these applications by business experts brings innovation: 77%[4]  of professionals believe their company can benefit from adopting Shadow IT because the applications created are “business-driven”; that is, designed and developed by experts to solve business problems and therefore to have greater effectiveness on business results than “technology-driven” solutions, which are instead limited by the technological constraints present in companies.

However, other potential costs[5]  also relate to Shadow IT: costs related to personnel who are dedicated to development rather than business activities; costs arising from data loss, difficultly accessing personal applications or lack of integration with corporate systems; costs derived from wrong analyses due to errors present in the spreadsheets and data not being easily traceable due to the lack of validation systems present in real business applications.


How to avoid Shadow IT with Low-Code

If you compare the costs and risks of Shadow IT with the resources and time required to rapidly develop applications using a Low-Code[6]  platform such as the WebRatio Platform, the advantages are evident, such as increased development productivity, the ability to integrate with systems and the increased engagement between IT departments and business process experts.


Low-Code technology reduces the workload of developers, who can therefore develop solutions that until now have been Shadow IT, eliminating the risk of data security breaches because the development governance returns to the IT department, which can create applications that comply with company policies. 


Business experts can focus solely on improving processes and do not have to spend time and resources on programming, using visual languages such as BPMN or IFML as common ground[6]  with developers.

If, for example, the sales and the back-office areas use spreadsheets, personal databases, email-sending systems and cloud invoices, then the company must bear the costs of subscribing to online services, in addition to the risk of sharing data with third parties and the hidden costs of lack of integration between systems, duplication and loss of data, and lack of shared management of systems.

In a few weeks, these recurring costs can be eliminated, creating customized management software with Low-Code technology that integrates customer relationship management, email marketing and electronic invoicing functions, which all staff in both areas of interest can use and that the administration can manage for performance analysis that otherwise would not be visible.


Low-Code helps manage the innovation process in the company

Shadow IT’s advantage of creating innovative business-driven solutions directly implemented by process experts becomes an integral part of the company’s activities with Low-Code: It is possible to bring all new but noncompliant applications and proofs of concept out from the shadows to be developed in a coherent, consistent and structured way by the IT department with the support of the staff of the other business units. In this way, not only does it save 40% of the budget that is normally wasted on temporary, not well designed solutions that put corporate data at risk, but also it exploits the initiative of many professionals who can see their ideas of innovative services made in a short time and shared between several areas. 

Let’s briefly look at the results that can be obtained:

  • Greater satisfaction from the staff
  • Greater involvement and stimulation of innovation in the company
  • Possibility of sharing and reusing applications in all company areas
  • Integration of the various “micro-services” to create more complex, innovative systems that serve a greater number of people and teams in the company
  • Better tracking and analysis of the use of company information systems
  • Simpler control of the entire “software park”, with savings in resources and budget necessary for management.


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[1] https://en.wikipedia.org/wiki/Shadow_IT

[2] https://track.g2.com/resources/shadow-it-statistics#security

[3] https://track.g2.com/resources/shadow-it-statistics

[4] https://track.g2.com/resources/shadow-it-statistics#usage

[5] https://www.techtarget.com/searchcio/tip/potential-costs-of-shadow-IT

[6] https://www.forbes.com/sites/forbestechcouncil/2022/02/09/how-low-code-and-no-code-tools-can-help-stave-off-shadow-it-and-the-great-resignation/


February 23, 2022 / WebRatio

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