Data Silos Disadvantages: How They Can Harm Your Business?

Data Silos Disadvantages: How They Can Harm Your Business?

Data silos are bad for business growth as they compromise the development of long-term strategies and decrease accuracy

Published By - Jason Hoffman

Companies use more and more applications to complete even the simplest tasks as they try to finish their tasks quickly and efficiently. However, using all these tools in parallel also increases the risk of creating so-called data silos.

What are Data Silos and why do they occur?

Data Silos are data repositories, under the control of a specific department, kept in isolation from the rest of the organization and therefore not integrated with other company systems. They are storage spaces that, like grain silos, which can contain various types of cereals, can store files, emails and other data in a non-shared and independent manner.

Data silos appear because of different reasons around different industries. However, this happens when different areas and departments of your company are not in the habit of sharing information, objectives, processes and priorities with each other.

How they can harm your business?

Data silos are bad for business growth as they compromise the development of long-term strategies and decrease accuracy when it comes to decision making.

In today’s business environment, leaders often need to make quick and informed decisions. Basing your decisions on data means that you use analyzed and verified data to make better decisions. But, for this, it is essential that the data you use be of quality. If there are missing elements or there are errors, you can make a decision which can cost a lot to your company.

Three main Disadvantages of Data Silos:

  • Data silos create barriers and can slow down your business.
  • Data silos reduce efficiency and waste storage space.
  • Data silos undermine the quality and credibility of the data.

If a given department does not share its data with the rest of the organization, it creates nodes of non-shared information that distort its relations because of the power contained in that data. This particular scenario is not suitable for anyone.

For example, Marketing experts base their campaigns on certain events such as website visits, e-book downloads, etc. On the other hand, the sales teams react immediately when a lead arrives. Neither department can take advantage of this propitious moment, if the data stays in separate silos, so your leads will be lost in oblivion.

Ways to put an end to Data Silos

Now that you know what data silos are and how harmful they can be, so it’s time to start knocking them down.

Include routine Data Analysis

Using data for organizational decisions is the basis of big data and a near obligation for any business. Reinforcing this process naturally forces the company as a whole to empty its silos and include every available information within its work. It’s a mindset change that can transform your business vision.

For all this to be possible i.e. for data silos to stay in the past, you will need to invest in technology. Management systems, or ERPs, are the most practical solutions, since they integrate all sectors of the company, structure the data storage and facilitate its use.

Encourage a culture of collaboration within the enterprise

Data silos occur because of the rigid separation of departments. This means that you can adjust to destroying them by welcoming a culture of communication and support for work between departments.

Outsource IT Management

Of course, you can implement all these tips on your own, but imagine what a data management partner can do for your business. Having a partnership to manage IT infrastructure brings new insight into the industry, helping you find unused data and integrating it into decision-making and productivity.

You may also like to Read:

Top 6 ways to retain your organizational data
Evolution of Master Data Management (MDM) in modern analytics era

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