In an age where we collectively generate more information in a day than we used to in a century, the challenge becomes how to identify and avoid one of the most insidious obstacles in the path of every modern company: data silos.
- What is Data Silos? Part 1
- Why Do Data Silos Occur? Part 2
- The Hidden Iceberg Part 3
- 4 Ways To Breakdown Data SilosPart 4
What is a Data Silo?
Simply put, a data silo is an isolated group of data. They can take the form of raw data that hasn’t yet been processed or analyzed or even just data held by different business units in a large organization. Data silos also form where data is stored in a way that makes it unreadable or inaccessible by data tools.
Why do data silos occur?
Data silos occur for different reasons across different industries. However, a common factor lies within the very structure of our organizations. Once a company is large enough, people naturally begin to split into specialized teams in order to streamline work processes and take advantage of particular skill sets.
While having separate departments or business units is absolutely necessary for a company to be focused and effective, if the barriers between teams grow too thick, the flow of information between them slows to a trickle. And that’s when data silos begin.
Data Silos – The Hidden Iceberg
So what’s the big deal? Well, while data silos may seem innocuous on the surface, there are many ways they can sink your company:
Data silos impact every part of your business, including the following crucial areas:
A) Financial Plan / Budget: Your company lives and dies on the strength of its financial planning and budgeting, but data silos mean that important supporting data may be left out of financial analyses and reports. This means the Excel spreadsheet you rely on to make budget allocations may not show the full picture, hampering your ability to make strong financial decisions.
B) Information Technology: Data silos hobble your IT staff. Many organizations have limited IT resources that cannot handle the burden of developing, managing and analyzing poorly organized data on top of their day-to-day work. Yet the growing demands from companies to make use of their data mean that IT staff are constantly overstretched and unable to deliver.
C) Human Resources: It’s often said that a company is only as good as its people. However, data silos prevent companies from looking inwards. Scattered and incomplete data makes it difficult to measure and compare employee engagement, preventing you from recognizing and rewarding your best people. Data silos can also hide growing problems like poor team culture until it is too late.
Data silos slow down your company.
In today’s fast-paced environment, leaders often have to make quick and informed decisions. But while you may technically have all the information you need within your company, if the data has not yet been analyzed or is spread across multiple teams, then it will be useless. By the time your team collects and processes the data, you will have lost the advantage of moving first. On top of that, you may find yourself making decisions on outdated information.
Data silos limit communication and collaboration.
The existence of data silos means that your teams have limited visibility of the information in the company. When your employees only see part of the broader picture, they will miss out on opportunities to work together toward common goals or extract the full value of data that has already been collected.
Data silos reduce efficiency and eat storage space:
When there is no easy central system of data storage, employees who need to access the data will often save their own copies for quick access. This can be a costly problem: if five people in the organization think they need that data, then all five will store it separately—eating up precious storage space and causing confusion as to whose copy is the most up to date.
Data silos decrease the quality and credibility of data.
Last, but certainly not least, simply storing information in a data silo decreases its usefulness. Isolated data quickly becomes outdated or inaccurate. And on top of wasting storage space, multiple copies of a data set may significantly affect any sampling or analysis, skewing any valuable insights drawn from your information.
So how do you not get a data silo to sink you?
4 Ways To Breakdown Data Silos
Consolidate your data management systems
The first step is to identify what processes and systems are contributing to your company’s data silos. Run an audit of each team’s data collection methods and management systems. Collect information on what systems are in use, the people using them, and evaluate if these systems generate relevant data.
Consult your employees on the day-to-day challenges they face regarding data management and incorporate their suggestions. Then decide which systems should merge or discard to make way for a more efficient solution. Ideally, your company should move to a unified central system to manage data, with flexible assignable and re-assignable user permissions and the option to easily export data and generate meaningful reports.
Change your company’s culture
Data silos are born from the rigid separation of different departments or business units. That means you can help to break them down by embracing a culture of communication and supporting cross-departmental work.
This includes encouraging your employees to be open and share their information, which may involve dealing with internal politics and entrenched cultural norms of competition.
Make it part of your company strategy
A powerful way to change company culture is to prioritize breaking down data silos in your business goals and strategy. This means review and maybe even fundamentally change the way your company is structured. Look for ways to increase the flow of communication between all levels of your business, from merging departments to building collaboration into your employees’ KPIs.
Finally, it’s important to not lose heart. Data silos often accumulate over the lifetime of a company. It can be long and arduous work sorting through years or even decades of disorganized data in different formats. But canvas your options, make a strategic plan, and keep at it. Remember that breaking down data silos is a marathon, not a sprint.
As our organizations and data sets grow, data silos become a significant threat. The Information Age has well and truly dawned in the business world, and companies hampered by restricted access to their own data may very well sink below the waves. For this reason, it’s important to take time breaking down your data silos and address the issues at their root.