What are Data Silos? The causes, problems and costs of data silos

The term silo was earlier used for organisations when information (deliberately or unintentionally) was not shared between departments whose functioning was interdependent and performances of these departments could be greatly improved through timely and effective data sharing.

An apt example, in today’s digital times, says a company may have a client management system and a web analytics system with two different vendors. Both have complementary data about clients, that is, client relationship information which can be linked to client web behaviour hence producing strategic insights. If the two systems cannot communicate operationally, then the two data sets cannot be linked, and they each would be considered as their own data silos, effectively they are invisible to each other.

What leads to data silos

• As organisations have grown so also has the amount of data available within departments and different units of one business house.
• Many times the technology being used by organisations lacks the native integrations needed to connect with other tools in the current tech stack.
• Employees can create data silos if there exists a culture of secrecy or a strong sense of being protective of your department’s data

Problems data silos can cause

Those who have not remained vigilant and actively integrated information sharing amongst their working groups will inevitably see silos in their ranks. More so damagingly, people will form cliques, inter-office politics ensue pursuant information hoarding and protection becomes the company’s cultural norm.

Silos can lead to not only loss of time wasted due to data hunting but also money and resources.

For e.g. If the marketing and sales departments don’t share data, timely and correct messages may not go out to prospective clients and lead to losses

What you need to do

Organisations need to blend data from different business units to provide deeper insight into operations, customers, sales and financial performance. To uncover these insights, organizations must integrate siloed data from disparate applications, systems and data warehouses located throughout the business.

Some other things to keep in mind

• Constantly be on the lookout for new technology and upgrade regularly
• Make sure the new technology integrates well into your current tech stack in order to avoid the creation of new silos
• Add integration software
• Avoid tools that would require complex coding