What Are Data Silos? All You Need to Know About Costs, Causes, and Cures

What exactly is siloed data? And how could it be costing you money, time, and decision-making ability?

Simply by being in business, your organisation is likely to collect, use, and interact with a huge amount of data every single day. Organisations therefore need to work out the most efficient and effective ways of working with data – or risk becoming swamped by it!

In their efforts to streamline the way they store, use, and share internal information, there’s one costly problem that many companies encounter: data silos.

Data silos are an issue that could be sitting right under your nose: sapping productivity, duplicating work (and errors, too) and severely denting your ability to make cogent, strategic business decisions.

But what exactly are data silos? Why do they cause such grave problems? And how exactly do they happen in the first place?

What is a Data Silo?

A data silo refers to a set of data that can only be used or accessed by a limited group of people within an organisation, excluding all other users, especially where shared, reciprocal access to that data would be beneficial.

It’s something that many of us have encountered in our working lives. Sometimes, information that numerous departments would find useful gets short-sightedly hoarded by a single group or department. Alternatively, technical or interpersonal reasons may make it difficult to share that data around. This understandably withers productivity and collaboration, potentially creating huge problems.

For example, if your sales prospect database is strictly only accessible by your sales team, you could consider that data siloed; especially if that information would help other departments do their job, such as marketing and accounts receiving.

Granted, sensitive information like HR records and payroll information needs to remain well-guarded. But data outside of that strictly confidential bubble can be useful across departments and levels of seniority.

Discover why Really Simple Systems is right for you

FREE TRIAL LIVE DEMO

Why Are Data Silos a Problem?

Short-Sighted Data Leads to Short-Sighted Decisions

The best business decisions come from a complete, seamless, top-down view of the entire company’s status quo, with no omissions or blind spots. When that unified picture is readily available, business leaders can easily make truly strategic, big-picture decisions; monitor progress; and correct course down the line if needed.

However, when decision makers are presented with segmented reports drawn from siloed data, it provides a very blinkered, short-sighted view of each business function. Tying that information together into a single, cogent picture can be time consuming and technically tricky – if indeed it’s possible at all. Not ideal if a decision is needed quickly.

Even if you can consolidate the information from multiple sources, it’s a time- and effort-sapping exercise that could be totally avoided if information were easily shareable and cross-referenceable between departments.

Duplicated Data Means Duplicated Work, Effort, and Errors

Simply keeping data accurate, clean, and up to date can be a lot of work. If multiple departments use separate databases that house the same information, it’s easy for errors, omissions, and inconsistencies to arise across those datasets.

So why burden each group with keeping their own info in order when it would make much more sense to pool that information into one centrally available, centrally manageable repository? Rather than having to manage multiple, partially identical databases, it would be far easier to manage a single central set of data and to provide access to as needed.

Continuing on from the problem of manual consolidation above, it’s highly possible that errors could creep into the data when bringing it together into one cohesive report. All in all, managing siloed information can be a huge waste of resources and erodes data integrity – not to mention a massive headache!

Siloed Data Can Cause a Siloed Culture

Remember at school, when you’d put your arm around your work so nobody could have a peek? Data silos do this at work and at scale.

When each group hoards data and refuses to share it outside of their own ecosystem (or indeed where it’s technically difficult for them to do so), it can lead to selfish behaviour between departments; creating animosity and mistrust where there really should be collaboration and sharing.

Data Silos Throttle Productivity

Everyone works better when they have the information they need at their fingertips. If you force a data silo’s “out-group” to request or otherwise hunt down crucial data every time it’s needed, you add another step, another stumbling block, into their process – naturally stifling productivity.

A segmented approach to data can also limit your team’s potential for creative data analysis. When excluded groups only ever see a myopic, blinkered version of certain information, their ability to carry out their own big-picture thinking gets stymied. Without context, there’s also a danger that data can be misinterpreted too. 

More Data in More Places = Less Data Security

A single, central repository of data is far easier to secure than lots of different databases spread across different devices or cloud software tools. When you’re only working with a single database, it becomes far simpler to establish technical boundaries and access permissions, and to uphold your responsibilities under your country’s data laws.

However when your company’s data is fragmented and scattered across countless different devices, services, and locations, it gets much harder to keep a lid on data security; it can exponentially increase your chances of a data breach, too.

How Do Data Silos Happen?

Internal Politics

Sadly, sometimes office politics can get in the way of egalitarian data use and policies. If there is friction or competition between departments (or even between individuals) this may result in people hoarding information for their own benefit. Yet on the whole, the company that collaborates on data together, generates revenue together!

Interpersonal silos can also happen without any animosity: sometimes each department keeps on trucking in their own little bubble until someone realises an opportunity to work smarter through collaboration.

Poor Tech Ecosystem

Outdated IT or over-cautious data security policies can create major barriers to data access and sharing. A (somewhat unfounded) mistrust of the cloud and online collaboration tools can cause organisations to favour housing their data on a central on-site server, or worse: multiple fragmented copies of data housed on individual PCs. Both can easily cause data to become siloed – especially given the rise of the current remote working revolution!

In short, if the day to day collaboration needs of users aren’t reflected in your IT, this leads to one of two undesirable scenarios. You either get lumped with data silos – and all of the drawbacks that brings with it, OR your team will find their own workarounds using free software and freemium SaaS tools.

Though these unauthorised SaaS workarounds may solve the functional problem, they do open the door to potential security woes. As your team pumps more and more of your company’s information into their own choice of tools, your data becomes scattered across online solutions, and it becomes more challenging to keep data security on a tight leash. 

Growth First, Data Second

Sometimes rapid growth or sudden reshuffles can happen rather rather suddenly. In times of upheaval, management generally spend their time focused on incoming or outgoing team members, HR, training, and other essentials. Sadly, IT and data policies are often left playing catch-up!

We get it – in times of great change, with people’s livelihoods to worry about, data policies are often the last thing on anyone’s mind. However, a company shake-up is probably the best time to ensure that everyone has access to the right data they need to do their jobs.

How to Identify and Dismantle a Data Silo

Now it’s wrecking ball time! Here’s a few pointers on how you can achieve data integration rather than data segregation.

Speak to Your People

If you suspect a data silo or you’re trying to hunt one down, simply ask the people who use that data every day. Are there any situations where your teams frequently have to ask for, or grant access to, the information needed for a certain task? Speak to both the “keepers” of the siloed data and to the “out-groups” who commonly request access.

Would the excluded group in this situation benefit from having more established access to that data? Would there be any data security or confidentiality implications from granting that access? If so, is there a way of sharing just the access points that the excluded group need? What work-arounds do these groups currently use and what are the data security implications of those work-arounds? Why is that group being excluded from that information if they regularly need it?

Gather information from those up and down the chain of command, and probe any technological, structural, or cultural barriers that may be present.

Address The Root Cause

If you’ve uncovered a technological or cultural issue that’s causing a data silo, address it immediately. If tech plays a role in your disparate data woes, seek out a solution that will allow your team to securely collaborate as needed. (Word to the wise – for anything sales, marketing, or support related, a cloud-based CRM is essential for keeping client and prospect details handy!)

Cultural and interpersonal issues can be harder to solve. They can really run the gamut in terms of motivation, emotion, and animosity, so tread firmly but with caution.

Prepare the Case for Data Integration

We humans hate change. When we’re suddenly told to start doing something differently with no context, it’s in our nature to feel a little friction. Data integration doesn’t exactly sound exciting or critical, after all. But when the request for change is cushioned by sound reasoning and clear explanations, that friction can be minimised somewhat.

This statement makes the case for data integration rather succinctly: Centralised, integrated data practices allow for more collaboration; more collaboration means more efficient working; more efficiency means more profits; more profits mean more job security and less stress. A workplace with collaborative, integrated data practices like these will be better able to make strategic decisions in everyone’s best interests..

Create a Plan of Action

Working out a clear plan of action before taking your first steps will undoubtedly help everyone involved. This plan is likely to look very different between organisations, but remember to plan out everything from sourcing the solution, to implementation, to training, and completion. Particularly complex change projects may require input from technical change and organisational change management specialists. 

With a clear plan and a clear goal, you’ll help to keep everyone happy and productive.

Prepare for Collaboration

Even if culture isn’t a problem, it can’t hurt to strengthen the bonds between groups who will be collaborating more frequently in future. As fellow users and custodians of the same data, it might be helpful for each team to know how others use that data and how their roles interrelate. Fostering this mutual understanding will also likely help to develop a sense of “all being in this together”.

Which is the core reason we seek to break data silos down. Everyone within an organisation is on the same team and setting up secure, documented ways to collectively use data can be the first step to bringing this collaborative spirit to the fore.

Need to share sales, marketing, and support data between teams securely and effortlessly? Take a look at our simple and intuitive CRM, developed especially for SMEs. Try it out today!