The Cloud Casts a Shadow

The Cloud Casts a Shadow

Lured by easy, inexpensive cloud-computing services, business units are bypassing IT departments when choosing solutions, creating a rise in "shadow IT."

David McCan - CFP.com | US

June 15, 2010

The proliferation of cloud-computing services is enabling many companies to lower information-technology costs and the capital risk associated with innovation. But there is a darker consequence of the cloud: a rise in "shadow IT."

Shadow IT is the purchase or development of technology services outside the control or oversight of a company's IT department. It may occur because a business unit believes it has unique needs not met by the company's standardized computing services, or wants a quicker implementation than it would get from the IT department. Most large companies, wary of data-security risks and seeing standardization of IT practices and processes as a key value driver, wage endless war against shadow IT.

Internet-based technology services from cloud providers, with their massive data centers, are often cheaper and faster than the services a company can provide internally. That opens the door to business units making technology decisions they historically would have run through the IT department. "Cloud services are driving an explosion of shadow IT," says Michel Feaster, vice president of products for Apptio, a provider of software enabling IT cost transparency, accounting, and budgeting.

Look for the problem to get worse before it gets better. Because cloud computing is still new compared with traditional technology infrastructure, many people outside of IT aren't yet fully aware of its possibilities, notes William Miller, CFO of Nationwide Services Co., a Nationwide Insurance subsidiary that runs the company's IT operation.

Anything that promotes shadow IT is disturbing to Miller. "What you don't want is what I call 'hobbyists' driving core business processes," he says. Many business leaders are making value judgments around cost or timeliness, saying they need to be faster and cheaper, without truly understanding the compromises involved in going outside the IT department, he says.

They also may not understand what they need from a technology provider — and what they don't ask for, they're not likely to get, according to Miller. "If you tell a third party that your number-one issue is price, they're going to get you cheap service," he says. "They're not going to tell you what risks you're introducing with that cheap service, if they even know."

Before cloud computing, some people saw a silver lining, as it were, in shadow IT: a source of innovation leading to prototypes for future approved solutions. That role is less attractive now that the cloud has emerged as a major stimulus for innovation, allowing companies to experiment with technology without buying expensive physical infrastructure. "You don't need shadow IT [anymore] to enable innovation," says Phil Garland, CIO advisory solutions leader for PricewaterhouseCoopers.

Not that IT has to make all the decisions regarding technology services for business units, or that businesses are always clueless about what solutions they need to handle any specialized needs. It may be enough for the centralized department to be aware of what the units are doing so it can apply a common set of controls, standards, and compliance procedures, notes Garland.

But communication from the IT department, or the lack of it, is a factor in the growth of shadow IT, according to Apptio's Feaster. "When IT can't articulate its costs and services as simply and clearly as cloud providers can, it drives business units to adopt those technologies and undermines IT's efforts to centralize and standardize," she says.

In fact, at many companies today, one goal of such efforts is to better compete with cloud services. Ironically, says Feaster, to the extent business units don't like the standardized offerings, they may be even more inclined to seek out shadow IT solutions.

Hampering the detection and reining in of shadow IT is the fact that it's often used for small projects with limited shelf lives that don't trigger the company's IT governance review thresholds. "But when you get a thousand of those paper cuts," says Feaster, "over time a significant portion of your discretionary spend is going to outside service providers."

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Risk Management Goals move closer to Reality

Business Insurance
May 31, 2010

Risk management goals move closer to reality

THERE'S A GOOD CHANCE that three items on the risk management legislative wish list soon will become reality, and that's certainly good news.

The three items-establishing an Office of National Insurance within the Treasury Department, reforming surplus lines taxation and regulation, and requiring certain companies to establish risk committees that include risk management experts-all appear in the financial services regulatory reform bill approved by the Senate this month. We believe all also should be part of any final reform bill hammered out by House and Senate negotiators in the coming weeks.

Risk managers can take justified pride in their role in getting Congress to consider such common-sense reforms. Just like the terrorism insurance backstop earlier in the decade, these reforms would represent a significant step forward for the profession of risk management.

Read Entire Article from Business Insurance

Willis Launches Willis DataWize(SM), powered by Riskonnect® New Enterprise-class Risk Management Information System the Product of Willis-Riskonnect Strategic Alliance

Willis Launches Willis DataWize(SM), powered by Riskonnect®

New Enterprise-class Risk Management Information System the Product of Willis-Riskonnect Strategic Alliance;

Willis DataWizeSM Gives Clients a Better Way to Track, Manage and Control Risk

Willis Group Holdings (NYSE: WSH), the global insurance broker, today announced the launch of Willis DataWizeSM, powered by Riskonnect®, an enterprise-class Risk Management Information System (RMIS) that gives companies of all sizes a better way to track, manage and control their risks and achieve better outcomes.

The product of Willis' strategic alliance with Riskonnect, Inc., a leading independent provider of risk management technology, Willis DataWizeSM responds to growing demand from clients for a technology solution that enables them to make better risk management decisions. Available to Willis clients in North America, Willis DataWizeSM is a natural extension of the consulting services offered by the Willis Strategic Outcomes Practice, the claim advocacy, risk control and data analytic resource of Willis North America.

"Willis focuses all of its attention on being the best advocate possible for our clients," said Don Bailey, Chairman and CEO of Willis North America. "That means thoroughly understanding their business issues and industries; being able to develop solutions with the best markets, price and terms; relentlessly delivering quality service, and getting claims paid quickly, and doing all of that with the utmost integrity. That's the Willis Cause, and that's what sets us apart as the most trusted client advisor and advocate in our industry.

"Willis DataWizeSM embodies that commitment, and serves as the perfect complement to our existing analytical and consulting services," Bailey said. "Clients asked us for a technology solution that would allow them to manage all of their risk and exposure information in a way that identifies trends, helps mitigate losses, achieves better claim outcomes and ultimately leads to lower costs and greater value. Willis DataWizeSM delivers on all counts."

[Read Entire Press Release]

Expect more from your risk management software vendor. Riskonnect provides 4 major upgrades per year, while maintaining your unique configuration. And, no additional fees associated with upgrades or maintenance.

Expect more from your risk management software vendor. Riskonnect provides 4 major upgrades per year, while maintaining your unique configuration. And, no additional fees associated with upgrades or maintenance....www.riskonnect.com.

Expect more from your risk management software vendor. Riskonnect provides 4 major upgrades per year, while maintaining your unique configuration. And, no additional fees associated with upgrades or maintenance....www.riskonnect.com.

Expect more from your risk management software vendor.

Riskonnect provides 4 major upgrades per year, while maintaining your unique configuration. And, no additional fees associated with upgrades or maintenance....www.riskonnect.com.

Riskonnect CEO, Bob Morrell featured in Q&A with Risk and Insurance's Managing Editor, Cyril Tuohy.

For many vendors who sell to the risk management community, cloud computing, or the ability to rent out software, platforms and infrastructure as needed, represents the latest step in delivering computing power as a service.

According to Margot Roth, global director of risk management for Whole Foods Market, the use of risk management information systems software applications by a Marietta, Ga.-based company called Riskonnect, Inc. has cut the time it takes to deliver financial reports to just a few minutes.  

It's no accident, said Bob Morrell, CEO of Riskonnect Inc., who spoke with Risk & Insurance® Managing Editor Cyril Tuohy about some of the technical and financial advantages of delivering software solutions on the cloud computing model.  

Read the Article:  Unclouded Visions of Software Delivery

Riskonnect, Inc. Taps Jill Cannon for Regional Account Executive Role

With wide acceptance of its cloud computing risk management software solutions, Riskonnect continues hiring rapidly.

Independent risk management software company, Riskonnect, Inc., announced today, that in spite of an economy that has severely impaired start-ups and brought many small, mid-size and even Fortune 500 companies to their knees, Riskonnect continues to hire rapidly and taps Jill Cannon, previously Director, Allied North America Insurance Brokerage, as its new Regional Account Executive over the Midwest and Southwest Regions.

ClearRisk Levels the Risk Management Playing Field for Mid-Size Companies

All companies big or small have considerable risk related costs. The difference is that big companies have the resources to hire professional risk management staff and buy expensive enterprise software. ClearRisk Manager was created so that medium sized companies could achieve the same benefits at a cost they can afford.

- PR WEB

[Read More]

Risk management gains priority at senior levels

Risk management, traditionally a responsibility of the chief investment officer (CIO), is in focus at senior levels like the chief executive officer (CEO) within organisations, institutional investors said in a survey.

[Read More]

Will Salesforce Chatter Neuter Microsoft Office and SharePoint?

On the Friday before Dreamforce, I read an interesting article in MIT Technology Review, entitled "Fixing E-Mail" that offered insights from the recently completed Defrag 2009 conference.

As I read it, I was struck by two comments attributed to Lili Cheng, general manager of Microsoft's future social experiences labs. The first is a direct quote while the other is comes directly from the article.

 

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