Businesses are under pressure to compete more effectively, operate more efficiently, and provide users with better customer experiences. To do that, they need to utilize data in smarter ways than they have in the past, faster.

Business units, however, aren't necessarily relying on IT to deliver the analytics they need because they have seen that IT may not have the budget or the agility required to act quickly enough. As a result, lines of business and departments are making their own investments in analytics. However, the investments aren't always in their best interest over the long-term, nor are those investments necessarily in the best interest of the enterprise.

How companies handle shadow analytics and how easy it is to deal with depends on the culture of the company, according to Matthew Taylor, managing director, Accenture Strategy. 

"If you've got a highly centralized IT environment where IT has had full control for many years and the organization is highly regulated, they're struggling more with shadow IT than more distributed organizations," he said.

New Silos Are Being Created

Companies have been grappling with data trapped in silos for years. Information is stored in all kinds of applications and the goal has been to liberate at least some of that information. Meanwhile, analytics is spreading out across organizations, but in pockets. Different users and different functions require different tools and, as a result, more analytics silos are being created.

"The people who want to use data will use any piece of software to get what they need," said Francois Ajenstat, chief product officer at business intelligence (BI) and analytics solution provider Tableau. "It starts with a frustrated individual who knows that analytics can help her do a better job."

Solution Choices May Be Sub-optimal

Individual users and groups tend to have a fairly solid idea of what they want to accomplish, but they don't always approach solution acquisition from that standpoint. For one thing, the number of possible solutions is disorienting, ranging from products that are difficult to implement to cloud-based services that provide easy on-boarding, ease of use, and comparatively fast results.

Sometimes an immediate need results in a solution choice that over promises and under delivers, or proves not to be the best choice over the long term. Including IT in the discussion may help set real expectations of what an off-the-shelf solution can and cannot deliver.

[When shadow initiatives rely on the cloud, security concerns can arise. Read SaaS Security: Gartner's 5 Tips for IT Pros.]

"What's driving shadow analytics is the desire for data in real time and near real time -- marketing, lines of business, product owners, and manufacturing environments. It can show up almost anywhere if IT has not provided those capabilities, an X-as-a-service, on-demand, self-service experience," said Bob Familiar, national practice director for Application Services at  BlueMetal, Insight’s interactive design and technology architecture firm.

According to 2016 Accenture research of C-level executives, more than 70% of respondents didn't involve IT in an "XaaS" decision. Seventy-seven percent believe IT lacks the skills necessary for the as-a-service world.

"Those numbers are high and that's a little scary. It is an area of great concern," said Accenture's Taylor.

It May Be Dangerous

Shadow IT solution choices may impact other parts of the organization, not the least of which is IT. Their implementation may also offend data governance and security policies if sensitive data can be accessed and used in unsanctioned ways.

"The analytics required really depends on the department or unit but you need an infrastructure layer on which models can run," said Ramkumar Murali, Practice Head – Digital Operations at Brillio, a global technology consulting and business solutions company. "The best thing to do is decentralize analytics and centralize the plumbing layer. That way, it's commoditized, you can apply governance, and address security standards."

Bottom Line

The shadow analytics trend is going to continue on the path BYOD did before it. Rather than resisting the trend, it is better for IT to provide a platform-like approach that supports business requirements while minimizing risks to the business. In turn, the business should not discount IT, because their support is likely to be necessary for long-term success.