Shadow IT — departments deploying their own SaaS without IT approval — looks productive in the moment. The team gets what they need fast. Five years later the math is brutal.
Just the SaaS subscription. Often $5-50K/year. Department buys it. No IT involvement.
Departments accumulate 6-12 such tools. Annual cost: $50-300K. Plus the security exposure (no SSO, no DLP, no audit trail). Plus the integration debt (data fragmented across 12 SaaS).
The shadow-IT tools have become department-critical. Replacing them is expensive. Integrating them is expensive. Securing them is expensive. The accumulated cost typically exceeds 4× what proper IT engagement would have cost in year 1.
Shadow IT is rational individual behavior in the face of irrational central IT. The fix is faster + more responsive central IT, not stricter shadow-IT enforcement.
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