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When Clouds Collide, You Get Lightning

By CFO.com 08/01/2012 05:07:00

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Having a handle on how data is being stored within your company can avoid bad weather ahead.

In the hybrid cloud, the risks that arise from Shadow IT become systemic. That means they affect every aspect of the business. So CFOs better know how to keep those risks manageable.

As the cloud carnival slowly makes its way through town, organizations (fortunately) are becoming increasingly aware of many of the pitfalls
associated with the adoption of nontrivial, enterprise cloud-computing solutions. Oft-cited risks include data privacy, uptime reliability,
security, total cost of ownership, vendor lock-in, and jurisdictional jeopardy (the potential violation of rules and regulations that apply
when your data, especially customer data, crosses borders).

Well, there’s another risk.

Under cover of darkness, and most likely already thriving in your organization, are Shadow IT departments. These arise when users and department heads go it alone, provisioning and deploying IT systems (most often cloud services) that are sourced externally and funded from local discretionary budgets without the involvement of the IT department or even the knowledge of the CFO.

It doesn’t take much for Shadow IT departments to sprout up in the typical commercial organization. The pressure to do things faster,
cheaper, and more easily makes it almost inevitable. Conditions are ripe for the growth of Shadow IT when a combination of factors exist,
the most obvious a poorly managed IT function in an organization with ineffective or inconsistent enterprise governance. Other factors
include bad IT-business communication and user frustration with being stuck waiting in the queue for corporate IT services. The role vendors
play, circumventing IT and finance to pitch directly to line-of-business leaders, should not be understated. Vendor offers can be very