Why are Data Silos Problematic? What are they and How to fix them?
Information is everything in today’s world, and to obtain information you need all the possible data you can get your hands on. Without sufficient data, businesses can have major setbacks like- stagnation, delays, and even worse- slip into losses. If obtaining data is one part of the process, there is another crucial aspect that is often overlooked- utilizing existing data. Many businesses fail to effectively utilize data that they already have, this happens due to a variety of reasons. The major reason is Data Silos.
Silos are storage structures used agriculturally and industrially to store and safeguard a bulk of materials from the outside environment. If this is what Silos mean, then Data Silos should be something that stores and protects data, right? Well, not exactly.
What are Data Silos?
Data stored in isolation, accessible only by a select few individuals or by a particular department or group in a company or organization forms a Data Silo. This means that other groups or departments in that company have a hard time accessing or gaining access to that data. Every group storing data on their own in whatever way they deem fit will only add to existing Data Silos.
How are Data Silos Formed?
Data Silos are not something that can pop up in a single day, they form gradually due to certain reasons-
Company Culture and Structure
Based on a company’s working culture and how it is structured, every group in it may be working isolated from one another, in a decentralized manner. This will lead to each creating and managing their data in the format and manner most comfortable to them, creating multiple Data Silos in a company. Even if the data is accessible, if each team used different methods to store and organize data, then navigating the provided data might not be too fruitful. Furthermore sharing data is an aspect of the company culture, which if not encouraged or proactively managed will lead to the creation of Data Silos.
Technological Inadequacy and Mismatch
Every team uses its own method to store and maintain data based on their needs and ease of access. This often means that sharing the data will be a much more complicated task than it needs to be. Everyone has to be sufficiently equipped with a compatible technology to be able to share data between groups.
Some groups or departments less acquainted with handling data might find themselves in a bind when faced with all the new jargon. Outdated technology is another reason for causing Data Silos, they might make data storage and management slower and more complicated, and also might not be compatible with newer technologies to be able to make efficient data transfers.
Communication
This is the main reason behind data Silos. Proper communication between the groups within the company can easily negate this issue. Only if the need for data is communicated between teams will an effort be made to make it more accessible, by transferring it or implementing systems to make the transfer easier.
Growth and Gatekeeping
When a company rapidly grows, new groups or departments will be created resulting in new databases being created by them. Moreover, if there are multiple branches spread across multiple cities or countries, data management becomes even harder. If there is no centralized data management system in place, each group will resort to creating and managing their own data systems.
On rare occasions, gatekeeping of data by teams or groups aiming to get a competitive edge over others will lead to the creation of Data Silos too.
Why are Data Silos Problematic?
Data Silos are an internal issue, meaning that their complete resolution is possible. This also means that they are often overlooked, which leads to a variety of issues affecting the company on multiple levels.
Incomplete bigger picture
The bigger picture that every visionary loves to talk about is hopelessly incomplete with Data Silos around. Data Silos means incomplete and missing data, which in turn means you won’t be able to get a complete picture of your business as a whole. You won’t be able to put all the data together to see how everything falls into place, and neither will you be able to form patterns and get an in-depth understanding. All of these a contributing factors to inaccurate decision-making.
Duplicate and inaccurate Data
Teams might carry on their own data analysis which might have already been done by other teams. Similarly, the collection of existing data is another futile venture. All of this leads to a waste of critical resources like time, and money.
Due to the isolated storage of data, there will be a lack of cross verification which might lead to unverified and inaccurate data, further leading to more confusion and a resulting chain of errors in the next levels of data analysis.
Security Risks
If inaccuracy is one path to getting your data compromised, then security is another. Having Data Silos is exposing multiple points to get attacked, which is a severe risk to your data integrity. It is also harder to safeguard your data when you don’t know at what place to safeguard it. It is analogous to having a fort with multiple entrances and a limited number of soldiers to guard it. If all your data was at one particular place, you could focus on securing it as much as possible, instead of having to split your focus on every single data silo.
Reduced Scope for Collaboration
Data Silos are severely limiting to any collaborative efforts between groups. Or is it the other way around? Because the very reason for the existence of Data Silos is how the teams operated in the first place, on their own, and with their own data systems. Having data from other teams would have opened up the doors to work on collaborative opportunities and share a common vision.
Bad Customer Experience
Depending on the type of business, there might be multiple points of contact for customers to reach you. The teams may vary at every point of contact, so depending on what team the customer got in touch with, their issue resolution varies. Due to the presence of Data Silos, the resolution of the issue will be delayed, decreasing the customer experience.
How to fix Data Silos?
Analyze the Problem
The solution to a problem often lies within, this is true in this case too. If you find the root cause of Data Silos, what they are affecting, and how they are affecting it, they should be easy to fix and prevent future Data Silos from forming.
Centralize and integrate Data
A much-needed feature for companies handling plenty of data. This allows a central repository to collect data from all sources in the company, while at the same time providing access to concerned groups, this also increases collaboration between groups.
Seamless integration of data from different systems and teams is the need of the hour. Any incompatible system has to be upgraded to synchronize with the centralized data system.
Data Policies and Company Culture
Data governance policies go a long way in dictating how your company collects, manages, stores, and shares data. This curbs data mismanagement and hence the creation of Data Silos to a huge extent.
Fostering a Company culture that encourages communication and collaboration is another way to help prevent Data Silos. This also improves inter-personal relations, and team bonding, and opens up the space to creative collaboration ventures between groups.
Auditing and Analytics
Regularly auditing data and using analytics tools to visualize and easily interpret data is a must. This will immediately bring to notice any data leaks or inconsistencies and identify Data Silos before they become a problem.
Once you identify the Data Silos, properly plan and tear them down so as to not suffer any data losses during the teardown. Then, transfer the data to a centralized database. With this, there won’t be any internal restrictions impeding your company’s growth.