TL;DR: Data silos, information that is isolated within a single team or application, are a pain. Breaking them up requires a company-wide effort, ranging from technical integration to changes in management and company culture. This article provides key considerations for leaders to break down data silos within their organization.

Imagine that two departments in a company store the same profile information about their employees. When one team needs to update information about Tom Smith, the other department must also make the update to avoid mix-ups. It’s a common challenge for many businesses. 

When data ends up in isolation — whether separated by department or by applications — it creates problems. Siloed data creates barriers to inter-departmental collaboration and information sharing, and that ultimately has an impact on decision-making, growth, and profitability.

In an age where companies are leveraging data science, machine learning, and enterprise AI to gain insights and stay ahead through innovation, an effective data strategy is crucial. Breaking down data silos, modernizing legacy data systems, and rethinking business structures are key ingredients to unlocking the potential of your company’s data. Read on to find out how to address data silos and get key considerations for boosting performance with data.

Why do data silos exist?

  • Application sprawl. Each department may have its own data management practice and applications to go with it – from CRMs to spreadsheets to cloud-based data warehouses. As separate applications proliferate, data gets siloed across teams and lines of business.
  • Company growth stage. Companies may have many manual or undocumented processes. Start-ups or even mid-sized companies may not yet have a clear data and communication strategy. Alternatively, companies in a growth stage may be moving too quickly to effectively manage strategies for communications and systems changes.
  • Legacy systems. Old structures also lead to siloed data. Legacy systems are another area that can present problems for data silos. In them, stored info can only be accessed by people familiar with such technologies. One of the main issues with legacy systems is that stored information can only be accessed or modified by those familiar with such technologies. However, migrating to a new system also has its problems. It may take days or months to integrate data siloed in legacy structures. Therefore, the entire process should be done with great care in order to avoid affecting users or creating more silos.

Data silos develop for many reasons, most of which are not limited to company growth or type of infrastructure. The main reason data silos exist is because business silos do. Breaking them up means taking a closer look at how an organization communicates at an internal level.

How data silos impact organizational performance

Executives and managers know that data silos are holding their companies back. An InterSystems survey of 250 financial leaders revealed that: 

  • 62% identified improving accessibility to siloed data as a top priority for their company.  
  • 85% of their company’s IT staff spend as much as 50% of their time helping employees access the data they need
  • 72% were not confident or only somewhat confident that their data gives them a 360 view of their customers

Making high-level, informed decisions requires linking a vast amount of information. Isolated data, however, prevents executives from having a panoramic view of both their customers and their business. In a digital environment, where at least 76% of companies in the United States permitting remote work in some capacity, having a clear view of operations is already challenging. (Gallup) Lacking or missing organizational data organization prevents decision-makers from seeing the full picture and reaching important conclusions.

Data silos can even lead to frustrating user experiences. Picture several members of your support team interacting with a customer. With isolated data, it’s easy to lose track of that user’s information, forcing the customer to repeat their story again and again. The overall user experience can turn frustrating if the information or service requires communication between several siloed departments. Instead of having a streamlined user experience with efficient communication, users and employees waste time and effort completing a single task.

Siloed data also creates a less collaborative environment, too, as teams are prevented from working together due to infrastructural separation. Dealing with data silos is a group effort. It requires a unified vision and a unique approach to company culture.

Bridging data: Strategies for breaking up silos

From infrastructure needs to people factors, a few steps are crucial when approaching solutions for data silos.

1. Identify mission-critical silos

One solution for managing isolated information from multiple applications and processes is to define which silos are hampering mission-critical operations — and when successfully integrated, could create maximum value. As decision-makers, strategizing key data sources can enhance collaborations and communications among different teams. Mapping the most critical silos also helps leaders look for applications that effectively integrate data.

2. Determine data storage needs

Identifying the type of data storage, as well as how much volume and how sensitive it is, can help enterprises determine the best techniques to integrate data. However, with the advancements in big data technologies, it’s becoming easier than ever to incorporate a variety of data sources.

As for business integrations, the next section provides important insight for business leaders do to break down communication and cultural silos within their company.

3. Shift company culture

Instead of working in siloed teams, create an organization that embraces collaboration — along with a data-driven company culture. Creating company-wide activities and welcoming all the traits that make each employee special can create a more accepting and collaborative business. HubSpot, for example, created a Culture Codeto bring everyone together – from interns to C-level executives.

Breaking down data silos requires support from everyone, especially top management. Because data influences different disciplines and departments, integrating it requires the support of executive leadership. As Harvard Business Review notes, making changes to your data usage in operational and strategic capacities means organizational changes will follow.

Using data effectively represents a real competitive advantage in today’s world. However, there‘s no need to look for information elsewhere: every company has the necessary information. When achieving analytical competency, the real challenge is integrating existing data to deliver new experiences and opportunities.

Key questions for organizations facing data silos

These considerations can help you understand if data silos impact your organization and how you can begin to break them down.

  • In the past six months, how often have you found out that a specific department had key information you weren’t unaware of? What have you done in such cases?
  • How often do you or your colleagues have to search for information manually? Is this a common practice?
  • How does information access work within your organization? Is this a process easily understood by a new team member?
  • Does your team interact with other departments frequently? What can they say about their experience talking to people in different teams?
  • Does your business offer enough channels to establish direct contact between different teams?
  • How many applications does your company use? How many of them do you consider redundant or think that they could be merged into a single one?
  • Do you have sufficient support, budget, and time to work on such aspects?

Partner with data strategy experts and thrive through data

At Blankfactor, we’re experts in creating customized data strategies and architectural solutions to boost your business. From cloud migrations to legacy system modernization to generative AI solutions, we can help you unlock your data. Contact us today for a 60-minute solution session. 

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