Week 2: COIS 12073 (ERP and shadow systems)

Week 2


Shadow systems are a phenomenon of the extensive use of computer technology for the management of data and the provision of management information for decision making, planning and monitoring. The shadow systems developed by the expert programmers can integrate the departmental systems with the centralized system in the organization process (ERP) (Jones et al, 2004). The development stage of ERP sometimes introduces new shadow systems to make the integration process easier. Even though there are advantages with shadow systems some problems also involved in the implementation of ERP with the existing shadow systems. Shadow systems are also described as “spreadmarts”, a term characterizing the software tool that enables and promotes their existence, for although Access databases are used to create shadow systems, Excel spreadsheets are central to their universal popularity as a management reporting tool.  It is a system is a “System which replicate in full or in part data and/or functionality of the legitimate systems of the organisation” (Behrens et al, 2004).  Shadow systems are a threat to organizational control and as stated by Jones et al (2004) these systems ‘undermine ES implementation and as such should be eliminated’. According to Behrens (2009), small shadow systems are handled by some personals in organization without the knowledge of senior and corporate management. This leads to get no support from IT experts or senior management.



Reasons why organizations don’t want to use shadow systems:


  • Data inconsistency
  • Undermining the organization’s data maintenance
  • Increasing number of suspicious fata
  • Data restrictions
  • Creating additional work to users
  • Error and changes can’t be tracked or detected


Possible threats:


  • Invasion of privacy
  • Low security
  • Prone to hackers
  • Unauthorized accessing of information
  • Documentation isn’t accurate


The internal and management departments are the main sectors, which are threatened by the shadow systems. The suppliers and the customers are also the ones affected by the shadow systems who would be expecting increased collaboration, integration and information sharing leading to better and improved business relationships and service. The whole ERP system could be threatened if the users create more and more shadow systems. Although shadow system will be used in parallel with the formal system, the information in shadow systems will not necessarily be useful for a long period os time.



Other than these there could be threats such as;


  • End users
  • Organisation
  • The system
  • Business process



Possible causes for the existence of shadow system:


ERP system is a software package composed of several modules that integrates each and every activities or transaction made between the different units of the organisation resulting in efficient and effective process. But despite the implementation of ERP, the shadow system still exists in organisations. Reasons are:


  • Poor planning and management
  • Poor data conversion and transformation
  • Lack of communications between departments
  • Lack of management support
  • Change management or users resistance to change
  • Ineffective training
  • System inflexibility
  • Users lack of trust of the ERP
  • Conflicts between functions
  • Business process don’t match software functions



Case study:


Jones, D, Behrens, S, Jamieson, K & tansley, E 2004, ‘The rise and fall of a shadow systems (electronic resources): lessons for enterprise system implementation’.



In this case study, the authors says the shadow systems are useful guide of problems that may affect in the implementation of ERP system in the organization. The researchers provide the explanation of how the shadow systems help the practitioners to develop and apply the enterprise system. The authors went through the 8 year process of development of Enterprise system in Central Queensland University (CQU) having multiple campuses over different states in Australia. This is a single case study went through the different stages of rise and fall of the shadow systems during the implementation of the Enterprise System. According to them, the shadow systems helps to understand the problems faced during implementation of ERP systems and thus the development of shadow systems and its integration with ERP systems can merge the benefits of both systems.






Though there are lots of threats, shadow systems are unavoidable in the organisations. The users and management should always be aware about what’s happening within the organisation and try to apply the positive side of the shadow systems for the success of the organizations.







Behrens, S & Sedera, W, 2004, ‘Why do shadow systems exist after an ERP implementation? Lessons from a case study.’ The 8th Pacific Asia Conference on Information Systems, Shanghai, Chaina.


Jones, D, Behrens, S, Jamieson, K & Tansley, E 2004, ‘The rise and fall of a shadow system: Lessons for enterprise system implementation’, pp. 1-15, viewed on 21st November 2013. http://davidtjones.wordpress.com/publications/the-rise-and-fall-of-a- Shadow-system-lessons-for-enterprise-system-implementation/


Jones, D, Behrens, S, Jamieson, K & tansley, E 2004, ‘the rise and fall of a shadow systems (electronic resources): lessons for enterprise system implementation’,Australasian Conference on information Systems, pp. 50-60 (online EBSCOhost).


Behrens, S 2009, ‘Communications of the ACM’, Shadow Systems: The Good, The Bad and The Ugly, vol. 52, Iss. 2, pp. 124-129, (online Discover it @ CQ University Library).



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