Data Silos: Why Organizations Need to get rid of them


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One of the biggest struggles faced by businesses today, particularly large ones, is the lack of information sharing between departments and divisions. When the data isn’t shared or even accessible from department to department, it creates organizational silos that make it hard to run the business as smoothly as possible. Data silos are where data goes to die or at least, it doesn’t get used properly or accessible enough, so it’s pretty much the same thing. 

Data silos are perhaps the most destructive force that can befall an organization, yet they happen all the time because of the human factors involved with data management. Fortunately, data silos don’t have to be an inevitability!

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What are data silos?

The data collected by different departments is typically stored in data silos. Data silos are collections of data that aren’t easily accessible or connected and are not available for sharing within the different departments of an organization. 

Data silos affect the quality and cause inconsistency in the data. This ​​unhealthy data can cause hindrance in decision making and ultimately because of data silos, businesses miss out on many opportunities. 

Data silos might cause a problem in the growth of the business, So be sure to avoid creating any forms of data silos in the business – there should be a single source of truth.

How do data silos occur?

Data silos occur when companies try to minimize costs associated with database management or departments within the organization work autonomously with their targets and budgets. As ​​each unit has its own set of policies, procedures, and objectives, departments may find it easier to manage and protect the data individually by providing a separate network of hardware for each database to keep them from interfering with one another. 

In many cases, technology can lead to data silos in businesses. Different units within the organization employ different technology solutions and tools for their convenience. For example, the sales department might keep data in excel sheets, whereas accounts might operate using accounting software.

However, sharing data across applications doesn’t only save money; it also saves time. Having access to all data allows access to real-time reports and up-to-date information about transactions and events as they happen. As mentioned before, it’s important to have all the company’s data stored in one location and easily accessible for everyone to use it.

Why are data silos problematic?

Most businesses with a multitude of applications will most likely have data silos within their organization. Data silos are problematic to an organization for many reasons – 

  • Inconsistencies in the data – Major problem caused by data silos is that it leads to inconsistency in the data across departments. Having multiple places where data about customer accounts could potentially be stored leads to inconsistencies in how customer records are accessed and used. 

For example, if a sales department has an email list of potential customers that the marketing department does not have in their system, the marketing department may send out a commercial email that does not go to that email list. Resulting in complaints and lost consumers.

  • Restrict cross-departmental contact and discourage collaborative work – When it comes time for departments to work together or receive reports from other departments, there can be delays in getting information because it’s not easy for different departments to access each other’s systems.
  • Data integrity is jeopardized, limiting the bird’s eye view of the data – Data silos restrict data analysis to the data available in a department. Large data sets can also be stored in silos of the particular department and not accessible to other departments within the organization. 

It limits an organization’s ability to see across a broad range of information. It also means that employees lose out on an efficient, holistic view of their business data.

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How to avoid data silos?

Organizations that want to succeed in business should have a 360-degree view of their data. 

  • Create a centralized data repository where everyone can access data.

Centralize the data in a single, powerful repository. With the SQL Server data warehouse. It can easily store and aggregate all organization’s data in one place and is accessible to all departments within the organization. Keeping all data in one place is a good way to avoid data silos.

  • Deploy cloud strategy

Cloud computing has quickly become one of the most popular ways for businesses to store their data. This is due to companies no longer having to purchase expensive hardware to store their data. Instead, they can rent storage space from a third-party company at a much lower cost. Cloud storage allows multiple departments to collaborate with fresh, clean, and timely data on a single, scalable platform.

  • Data integration

It’s important to integrate data. When the company has multiple data silos, it’s difficult for anyone to have a holistic view of what’s happening in the business. Using different tools in different departments for managing customer records can lead to out-of-date information about customers which doesn’t always paint an accurate picture of how customers are interacting with the business.

  • Focus on strategic objectives instead of tactical goals.

Make sure that what each department focuses on each day contributes directly to the overall goals of an organization. Focusing on goals that are far away from strategic objectives will cause teams to lose sight of where they’re going. 

  • Create enterprise-wide data policies. 

Make data policies that apply to the entire company. It’s important that everyone in the organization understands the data standards and has access to the information they need to grow the business.

Data silos are a business and competitive disadvantage, which is why organizations should take them seriously. With so much data available, don’t let the inability to make sense of that data doom the organization. Make an effort today to consolidate the organization’s internal data stores and open them up for collaboration with other departments.

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