What Are Data Silos? And Why You Don’t Need Them

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Have you ever heard of the word data silos?

Almost every business in the 21st century sees the value in sharing information company-wide. After all, teams can now share and cross-check insights that help them become more productive and more profitable for your organization.

Some companies are still silo-ing data between departments. Some industries have legal restrictions that limit their ability to share information.

There are others are missing out on opportunities to be more efficient and effective daily. They also find it difficult to climb out of their ‘data swamp.’

In this article, we answer the question: what data silos are and why you don’t need them, and what you can do about it. Let’s start by examining what a data silo is:

What Are Data Silos?

Data silos are collections of data within a company’s IT environment that are inaccessible by other people across departments or business units. They lack transparency and are expensive for companies to maintain.

Removing them helps you and your team access the information you need when you need it. Customer data is a very important factor in every business.

To understand why you should ditch your data silos, let’s start by examining why they are so detrimental to a business’ functionality:

Why Data Silos Are Bad for Business

One of the main goals of any organization to maximum efficiency levels while still being productive. Unfortunately, many companies counterintuitively do the opposite when they silo their data. More so, it’s not an apparent leak in your overall budget and productivity.

Individual businesses, like hospitals and law firms, require data silo-ing. However, that’s a unique occurrence in the business world. Private and corporate firms stand to benefit from openly sharing information across the organization.

Marketing data needs to be shared across different departments because they use it to create initiatives and solutions from the valuable insight they gained from the data collection.

Here’s why data silos don’t make sense for most businesses and industries:

1. It’s an Inefficient Use of Resources

Imagine having to maintain separate databases for all of the business units across your organization. Right? This, um, strategy causes duplicate information and bottlenecks in obtaining it.

Plus, it’s expensive to store all of this extra, redundant information, not to mention the data analytics required for these data.

2. Inability to See the Forest for the Trees

Siloed data causes you to miss opportunities in several areas of your business. For example, if your sales team is aware of information regarding a particular geographic area that the marketing team doesn’t know, wouldn’t it be helpful to share that information in an accessible way? Sure. Absolutely.

However, data silos cause these valuable insights to remain dormant or go undiscovered altogether.

3. Data Is Insanely Inconsistent

Drawing upon the concept of repetitive data storage, data silos also run the risk of introducing data inconsistencies. For example, customer service may record a client’s telephone number in the department’s database.

What if sales changes that information later down the road? That information is not globally updated company-wide.

4. They Are Very Expensive to Maintain

So, when you are storing duplicate data that is maintained by separate departments, it causes a lot of unnecessary expenditures, as you can imagine. It can also cause different teams to acquire tons of irrelevant expenses.

Your financial resources are precious, and you don’t need to waste your earnings on data silos. Newer solutions are available to help you manage information and pull insight from it. There is always a tool somewhere you can use to manage the information from multiple sources properly.

How Data Silos Occur Within an Organization

Now that you understand what data silos are and why they are bad for your business, let’s take a closer look at how they develop within a company:

Incompatible Systems

Different departments utilize and deploy various technologies, of course. The diverse needs of your organization may cause a data silo due to incompatibilities between technologies.

For example, your sales team may use a customer relationship management (CRM) system while the marketing department organizes itself using an email client.

There is an opportunity for the department to share valuable information, but technologies that don’t ‘communicate’ may cause data silos within an organization.

Organizational Hierarchy

Some organizational leaders developed silos to separate their operations. Perhaps they thought that this strategy might offer greater control over the company’s service offerings. It’s easy to allow your company’s hierarchical nature to affect technological operations.

Company or Industry Culture

Larger companies and specific industries silo the departments from each other. In IT, there is a concept that information must only be made accessible to the people who actually need it.

Well, as it turns out, everyone needs it unless there are legal restrictions placed on sharing certain pieces of information.

As you can see, data silos only cocoon the departments rather than link them together. So, after realizing that data silos are a problem, how do we break them down? This puts a strain on some companies and the company culture they follow.

How to Breakdown Data Silos

Companies that are ‘data-driven’ tend to make the best candidates for breaking down their data silos.

Data by itself does not offer much in the way of insight, but when you couple data with business intelligence tools, it’s akin to turning on a bright light in a barely lit room.

In short, it’s illuminating to the minds that drive your day-to-day operations.

The best way to break down your data silos is by implementing a strategy that:

  • simplifies and consolidates your existing data into a single location, and
  • communicates new procedures and processes to employees company-wide

Make sure that you work with a business intelligence company that fully understands the realities of running a business.

Otherwise, you end up in a similar but different situation as before. The costs of having to repeat the process are too high, meaning that you risk too much not to get it right the first time around.

How Does DashboardFox Help Prevent Data Silos

So the concepts we want to discuss here is that DashboardFox allows you to collect all your sources of data into a single reporting and dashboard platform.

Since DashboardFox is going to do a real-time live query against each data source it connect to, you don’t have to data warehouse or combine data for reporting in many cases. They can fetch it from the location you have it stored.

DashboardFox has the security built in to limit specific people to only the data sources they should have access to, what role they should have (viewer or composer), and what data-level security they should have.

DashboardFox allows you to combine data from databases, spreadsheets, and soon to be APIs to bridge all your silos into a complete picture.

Help Your Business Ditch the Data Silo Mentality

Hopefully, you have a solid understanding as to why data silos are useless for an organization that wants to compete in its market.

Data silos indicate that your company may lack a transparent culture, which is a hallmark of a modern, successful business, which can be a serious data silo problem if left neglected.

Ditch the silo mentality and find out how DashboardFox can help your company elevate itself to the next level.

We offer a full suite of business intelligence tools that promote cross-departmental communication using the leanest technology possible. This can be helpful in managing multiple teams with different systems. Contact us today to find out what we can do for your business.

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