The pros and cons of shadow business intelligence

The formal name for BI applications developed and managed by non-BI professionals is shadow BI. Such applications are usually created after a business user has lost patience or trust in an incumbent software solution and so decides to create their own system – often by using Excel or Word.

The more tech savvy users might even download some BI software and put the data in their own database.

Although shadow BI applications initially appeal to the business, there is a real danger that in the longer term they will do more harm than good to the enterprise as a whole.

So why do most organisations find themselves with so many shadow BI applications, and what guidelines could organisations put in place to prevent and manage the uncontrolled growth of such solutions?

Bad rep

Despite what some might think, shadow BI is not the enemy. Sometimes a solution becomes very successful and will make a significant contribution to the BI ecosphere.

Whether it does or does not, at some point in the lifetime of a shadow BI application some professional guidance will be required. Business users deserve the best support BI can give them, either by showing better alternatives to shadow BI solutions or by adopting a solution so it can be scaled up and rolled out to a wider audience.

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There are also dangers associated with shadow BI. If it is not properly managed the organisation is exposed to risks associated with poorly tested functionality, data integrity, adoption to future (technology and business) developments legal issues if the software is not used within the boundaries of the software license agreement.

The core reason that businesses rely on their own BI applications is that any changes to central BI solutions take too long to implement. Other reasons include requests that would require a major investment or business users simply don’t know what services can be delivered through central BI.

In many cases, the business users feel they have no choice but to create their own BI applications. They have tried to get what they want through central BI and failed and so turn to their own devices.

The reason why central BI fails is more often than not poor organisation (of the change processes) or poor implementation of the BI system.

In reality, most business user requirements could be met within an acceptable time if there were an efficient governance procedure and if the BI is implemented in accordance with best practice guidelines.

Streamline BI governance

BI applications are principally different from data entry applications. So why is it they are often governed by the same rules? The most likely cause is a reluctance to change agreed procedures – despite the fact that business users are turning their backs on central BI and the return on investment on BI applications is often poor.

The most common change requests for analytical applications bring significant business value to a small group of people, are simple to implement and can easily be corrected if something goes wrong.

On the other hand, changes to data entry systems are usually part of a more complex change in processes within an organisation, impacting several teams, various screens and processes, and would cause a disaster if they go wrong once implemented.

When there is a significant risk to the business then it is perfectly legitimate for a request to be reviewed by design authorities, change advisory boards and test teams prior to implementation. But when the risk is negligible and changes can easily be undone, the approval process could be simplified and delegated to senior developers and retrospectively reviewed by design authorities.

Finally, it is helpful when business users, BI teams and service partners agree what a ‘reasonable time’ is for implementing relatively simple changes to BI. Once there is a routine, it makes it so much easier to manage expectations within the business.

Responsible shadow BI

Once governance has been streamlined there will be an immediate reduction of shadow BI. But there will still be users asking for things that still can’t be delivered.

They may require applications a business can’t support or datasets that cannot be easily incorporated in the existing data model. In these cases, a business-led pilot for trying out a solution not supported by central BI can be useful.

>See also: 20 years of false business intelligence promises

Rather than leaving the business team to its own devices, the central BI team should still be involved. Perhaps they can’t provide the application, but some input might still be appreciated. Equally important, central BI will learn from the experience and might see new opportunities when new technology becomes available.

Ultimately, as long as there are clear rules of engagement, shadow BI could be beneficial to both the business user community and to central BI.


Sourced from Jan Van Ansem, Bluefin Solutions

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...