Abstract:Drawing on notions of power and the social construction of risk, we build new theory to understand the persistence of shadow systems in organizations. From a single case study in a mid-sized savings bank, we derive two feedback cycles that concern shifting power relations between business units and central IT associated with shadow systems. A distant business-IT relationship and changing business needs can create repeated cost and time pressures that make business units draw on shadow systems. The perception of risk can trigger an opposing power shift back through the decommissioning and recentralization of shadow systems. However, empirical findings suggest that the weakening tendency of formal risk-management programs may not be sufficient to stop the shadow systems cycle spinning if they fail to address the underlying causes for the emergence of shadow systems. These findings highlight long-term dynamics associated with shadow systems and pose "risk" as a power-shifting construct.
With the advent of end-user and cloud computing, business users can implement information systems for work practices on their own -either from scratch or as extensions to existing systems. The resulting information systems, however, often remain hidden from managers and official IT units, and are therefore called ''shadow IT systems''. When a shadow IT system is identified, the organization has to decide on the future of this system. The study uses a configurational perspective to explain outcomes of shadow IT system identification, as well as the mechanisms and contextual conditions which bring them about. For this purpose, 27 profiles of shadow IT systems were compiled by conducting 35 interviews with respondents from different positions and industries. The analysis gives insight into six distinct context-mechanism-outcome configurations explaining four outcomes that occur after shadow IT system identification, namely phase-out, replacement, continuing as IT-managed system, and continuing as business-managed system. These results contribute to the shadow IT literature and, more broadly, IS architecture and governance streams of the IS literature. They inform IT managers when these weigh decision options for identified shadow IT systems given different contextual conditions.
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