In data-driven marketing, data influences how companies strategize, market themselves, update services and respond to problems.
Organizations use insights pulled from data to remain competitive in their industry and meet customer demands.
In an ideal situation, the daily work completed by every department contributes to the organization’s overall vision for the future.
However, without efficient, enterprise-wide access to crucial data, a company can hurt its own chances at expanding and thriving.
One of the biggest culprits hindering companies today is data silos.
These pockets of data accumulate in each department’s software, while the other departments lack access to it.
This costs otherwise excellent company productivity, money, and potential collaborative efforts.
Here, we address the specifics of data silos, how they form, their effects, and what solutions you can use to eliminate them so your organization can succeed.
What Is A Data Silo?
A data silo is a collection of data that only one group within an organization has access to.
This data remains isolated from the other departments within a company for a variety of reasons.
However, transparency, productivity, and communication suffer as a result.
These collections of data grow in scale with the business. The longer they’re kept separate from other departments, the more they hinder the process of furthering the company’s goals, since the organization can never see the complete picture.
Decision-making becomes harder, trust and efficiency start to deteriorate, and companies feel fractured as opposed to unified.
The Causes Of Data Silos
Data silos happen naturally.
Since each department in a company offers different services, it makes sense that they would have their own set of data to use.
These three causes only become an issue when they get out of hand and when the company does nothing to address them.
1. Inadequate technology
Each section of an organization will have a specific application or software to do their work.
Sometimes, the preferred software does not facilitate easy access or sharing.
Another scenario sees one department that lacks the training, permission, or ability to use another team’s software.
Departments also store, manage or use data in different ways, which might not translate well in collaborative interactions.
Companies often lack high-quality applications that make quickly transferring information and cross-referencing data easier.
All of this directly contributes to the development of data silos because the technology in use doesn’t have the advanced capabilities to communicate across teams.
2. Company culture
The culture of an organization can heavily contribute to data silos.
You can think of departments as their own branches of a family. Departments work in separate areas, develop independence and grow accustomed to their own methods.
While employees gain a deep understanding of their own team and habits, continued separation and individualism can spark unproductive competition.
This makes teams less likely to collaborate and more likely to serve as gatekeepers to their own collection of data.
3. Rapid growth
Data silos might start out relatively harmless when an organization launches and operates on a smaller scale.
However, as a company grows larger, their stored data increases, and transferring data throughout the organization becomes an even greater challenge.
The rate of growth can even cause structural issues within the company’s technology ecosystem that impede overall data management, making it very easy for data silos to grow.
How Data Silos Compromise Your Organization
We’ve established the causes, but let’s dive into the specific reasons that data silos ultimately can harm your business.
Telling only half the story
A company cannot make its best decisions with fragmented evidence and feedback.
Data silos prevent department heads and company leaders from seeing the bigger picture, resulting in uninformed decision-making.
When departments cultivate their own data silos, they will act based on the information they have.
However, this information may not always align with how the company perceives its progress and goals, or even match with another department’s data.
Addressing this issue becomes nearly impossible without enterprise-wide data sharing.
Encouraging competition over collaboration
Company culture creates data silos, but silos also feed into company culture.
Instead of coming together as a team, departments tend to focus on their own data and work independently within that framework.
As a result, collaboration falls to the wayside, replaced by unhelpful conflicts between departments and increased privacy amongst team members.
A lack of trust and transparency makes it hard to rally around a shared goal.
Collaboration cannot happen without mutual understanding.
To truly collaborate — which is the heart of running a business — colleagues need to share data. This allows everyone to:
- Communicate.
- Understand each other.
- Discover new insights to help their organization.
Negative customer service
How can you properly help a customer when you don’t have all their information?
Customers interact with companies through a myriad of departments to make purchases, give feedback or ask questions.
If each department pulls up different data on a customer, that person ends up either repeating themselves or receiving different answers to the same problem.
This does not reflect well on your organization’s customer service nor does it help you generate new leads.
Financial loss
Your company will lose money if data silos go unchecked.
As departments save the same bit of data to their individual software, they misuse valuable storage space paid for by the company.
By resolving data silos, your organization helps its budget, uses storage more effectively, and increases data accessibility.
Data inaccuracy
Data silos make it incredibly easy for separate departments to repeatedly store the same information on different software.
This inevitably results in inconsistencies.
Departments will save data, keep what suits their needs and interpret the same information in various ways.
This pileup also results in companies struggling to establish which pieces of information are the most up-to-date.
If an issue arises, organizations experience a nightmare trying to cross-reference information from every department.
A company must gather the right data — the current data — in order to resolve problems or move forward with a project.
However, they can’t always trust or know which information is current because the data silos give different answers.
Wasted time
Data silos waste your time.
The number of applications, repeatedly stored data, and lengthy problem-solving process all slow you down.
If you don’t tackle the issue, the problem grows in scale with your business.
Imagine trying to approach a problem, but you have to manually ask permission to access the stored data. Then, you sort through each department’s collection of data to find relevant information and piece it together.
Precious time disappears as you try to solve the problem instead of actively growing the business.
Also, combing through data silos can push back projects and make employees less productive.
Important Solutions To Data Silos
Data silos hurt your business, but fortunately, there are ways to remedy the problem and strengthen your organization.
Integrate company software
The absolute best solution to data silos is software integration.
Integrating software creates a unified system where your company can access, analyze and interpret the data it collects from different applications.
Cloud-based applications, scripting, and on-premise ETL (extract, transform, and load) all serve to streamline data into a central location for easier access and use.
Find the right software platform
Integration allows different software to work under one system, but companies can also consolidate all their data onto one unified platform.
Software providers offer products, services, or applications that fulfill the needs of each team.
Working with the same provider helps a company achieve cohesion and lowers the chances of data silos from forming.
Nurture company unity
The most effective way of changing your organization’s culture is communication.
Explaining the damage caused by data silos and the advantages of sharing data shows respect for your employees and gets them on board.
Departments will recognize that data silos impair their ability to do their jobs and severely limit the company.
You can also ease the competitive nature of your organization by fostering a healthier work environment.
Emphasize collaboration in your discussions and host company-wide events that help teams branch out beyond their sector.
Employees want to feel appreciated for the work they do, so your company can also highlight excellent work and collaboration across your organization.
Eliminate unnecessary data
Setting aside time in your employees’ schedules to appraise collected data may seem like a waste.
However, getting rid of any outdated information will lift a weight from your company’s shoulders.
This frees up storage space and makes integrating all your systems even more effortless.
If you want, you can even view it as a bonding and team-building activity between departments.
All of this helps prevent data silos from developing, so that your company can continue to achieve its goals.
Data Silos Hold Your Company Back From Its Mission And Objectives
But you can trust us: if you put the time and energy into solving the problem now, you save yourself a future headache.
To dive deeper into the world of data-driven marketing and the various ways it can improve your business, check out a special issue of the Rock Content Magazine.
Understanding the pillars of data-driven marketing will unlock new potential for you and your company.
