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Disadvantages of data silos – how to connect your data

4 min read
Data silos are rigidly compartmentalised areas of data that don’t join up with any other part of your information systems. For many large organisations, the issue of data silos has got worse with the explosion in experience data (X-data), from in-store feedback to online reviews.

Why you should break down silos

Here’s why the top organisations are making it a priority to break down silos and unify all of their operational and experience data:

1. Data analysis is more difficult

Information silos can pose problems when it comes to data analysis, as the information may be stored in formats that are inconsistent with one another. There’s a lot of time-consuming manual work to be done in standardising the data and putting it into new compatible formats before any useful insights can be gleaned from it.

2. Access issues can slow down data research

You may hit confusion around permissions and information access hierarchy where silos exist, as the level and nature of security can vary between siloes. When you’re benchmarking data or looking to put together a longitudinal analysis that re-examines older material or pulls in information from different parts of the business, this can create a significant lag factor. It slows down work and degrades the ROI associated with projects.

3. Work and effort is duplicated

When there’s limited visibility across an organisation, members of different teams can end up doing the same work in parallel. In these situations, access to shared data could have saved time and effort. And as well as being resource-inefficient, there’s a wasted opportunity to collaborate and share experiences between teams.

4. Siloed information goes hand in hand with a siloed culture

When data is siloed, it often points to a siloed workplace and a company culture where vertical divisions work independently and nobody shares information outside of their own domain.

As well as the practical benefits of releasing siloed data, the process of integrating company data can also help chip away at overly rigid team structures where knowledge isn’t being shared and used to the company’s best advantage.

5. Data security is compromised by organisational silos

With no overarching control over how data is gathered and analysed, there’s a greater risk of data leaks. That’s because if employees are running their own research, or storing data on non-approved applications, there’s a greater risk of the data being lost or otherwise compromised.

How to dismantle data silos in your company

Know where data silos exist in your business, and think about where you can improve data integration.

1. Find siloes at their source

Small companies are often self-aware about silo problems, but in a bigger organisation it may not be obvious where the problem is happening or where it’s causing the most damage. A short questionnaire circulated to key data stakeholders in different departments could help shed light on the problem.

2. Fix any technological factors

While silos often stem from cultural norms or hierarchical HR structures, the technology a business uses can also play a part. Older systems may not be set up for data sharing or compatible with modern formats, and technological applications may vary between departments. One option is to unify your data on a modern platform geared for sharing and collaboration via an easy-access web interface. This may be a long-term project rather than a quick fix, but it could pay dividends as your business grows.

3. Make a case for change and get high-level buy-in

Data integration doesn’t sound especially urgent or glamorous – but the cost of ignoring it could be huge as silo-related problems take their toll on the bottom line. To get traction for your data integration goals, try linking them to a specific business challenge or opportunity and build a business case to gain buy-in from budget holders. Focus on what you could save financially by upgrading and unifying data systems across your business, as well as the cultural and future-proofing benefits of banishing siloes for good.

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