Shadow IT Groups Surface To Support Business Units

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    Enterprise Systems outsourcing reporter Stephen Swoyer examines the existence of “shadow” IT operations set up by business units dissatisfied by the support they’re receiving from service providers.

    Who Benefits from Outsourcing? Not the Line of Business” cites the story of “major telecommunications carrier” that hired a new CIO, who arrived and informed the IT staff that the company didn’t “do IT.” Between 1,400 and 1,600 people were laid off or hired by the contracted providers, IBM and EDS. Now at least one of the company’s business units — the managed network services group — has been “surreptitiously reaching out to former employees.”

    Another story in the article quotes Don Cave, a subject of one of our case studies, who discusses how the internal IT team has been put in the position of supporting and even rescuing the offshore provider staff as they work on the outsourced projects. As Mr. Swoyer writes:

    In fact, he says, his company recently concluded a project in conjunction with offshore “experts” that—by any objective criteria—was an abject failure: Not only did it go over budget, but it also resulted in a dissatisfied line-of-business customer. The reaction of company management? Deny there’s a problem…

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