What Is a Data Silo?
By Jason Lim
Published on October 19, 2021
Although organizations don’t set out to intentionally create data silos, they are likely to arise naturally over time. In many cases, leaders aren’t even aware that they exist within their own business. This can make collaboration across departments difficult, leading to inconsistent data quality, a lack of communication and visibility, and higher costs over time (among other issues). To effectively fight back against this problem, business leaders need to take a step back and reassess their current procedures and operations, company culture, and technology stack.
What Are Data Silos?
Data silos, also called information silos, are pockets of information stored in different information systems or subsystems that don’t connect with one another. If your company is collecting and storing a lot of data in different locations, there’s a good chance you have a data silo. When you can’t link the data from one system to the other, each is an individual “silo.”
In the days before the internet, silos typically arose when different departments didn’t share information with each other. In some cases, the teams may not have even realized that they were both collecting the same data from customers!
Today, even if marketing and sales teams share or duplicate information, each department may have different policies and processes for managing information, depending on their unique needs and goals. As a result, data remains siloed off from other teams.
What Causes Data Silos?
Historically, business departments functioned independently of one another. Marketing would have distinct goals from sales, and would develop distinct procedures for processing data and leveraging insights. Silos would spring up by department.
But the rise of the Internet ushered in a new age of interconnectivity. Business leaders soon realized departments were duplicating work, recreating the same reports, and (worst of all) following no shared procedures. The surge in data collection has only compounded this problem.
Technology, and the processes that surround it, can give rise to silos. New applications that don’t integrate with your tech or analytics stack will generate silos. If left unchecked, these will grow with time.
People and organizational structures can also cause silos. Various workflows, policies, and procedures may inadvertently encourage them within certain operations.
Data silos are rarely intentional. This makes it harder to identify them and subsequently break them down.
Every new technology brings with it a potential data silo. Every team, whether it’s sales, marketing, or customer service, uses applications to help them get work done. For example, all three of those teams collect and use similar customer information, such as email addresses. However, if they’re using different applications that don’t connect, you have a silo. Since each team is collecting the same email address from users, you now have three copies of that email address stored across the organization’s network.
In some cases, if each department has its own culture and views on data sharing, there can be distrust between departments. When teams don’t feel confident that their data will be properly and consistently managed, it can be difficult to foster data sharing within the organization. This silo mentality encourages the creation of information silos leading to an overall negative impact on company culture and performance.
Perceptions of relative importance exacerbate the silo problem. Departments that have a bigger impact on the bottom line may be viewed as more important. They get higher quality data fed to them, while other departments are overlooked or receive lower quality data. This creates another silo, and it can lead to duplicated and inconsistent data.
A company’s culture can also lead to data silos, as departments may create their own data processing standards. Some departments, such as legal, may want to restrict access for security purposes. Other departments, like marketing, might want to foster collaboration and access.
Distinct departments often generate distinct practices, procedures, and cultures. Even though each department has valid reasons for managing data the way they do, each method can still create silos.
How Are Data Silos Harmful?
Silos do more than prevent people from collaborating. They can also have larger harmful effects like:
Inconsistent Data: If you have information stored in several different locations, you won’t know what the “right” version is. Even worse, you may not know who made changes (or whether they had the authority to do so).
Wasted Resources: If multiple departments all collect and store the same information, you’re spending more money on storage than necessary. Also, duplicate data reduces productivity because people must spend more time searching for the data they need.
Limited View of Data: When people only see a small portion of the information, they can’t make fully informed decisions. It’s like being the captain of the Titanic; All you see is what’s sticking out above the water. The real danger is what you can’t see, since these unknown elements are likely to cause problems in the future.
Reduced User Experience: As previously mentioned, data silos can lead to problems down the road. Applications may draw data from different databases, sometimes in different formats. Keeping data siloed also makes adopting new technologies more difficult. If you’re trying to build new digital customer experiences, silos can make it difficult to do so efficiently and effectively.
How to Fix the Data Silo Problem
But we’re not just the bearer of bad news—the good news is that you can successfully break down data silos within your organization. The even better news is that with the right technology to help your end users, you can prevent the creation of new silos going forward.
Create An Intuitive User Experience
If you build it, they will come. Or, at least they’ll adopt it.
Silos exist, in part, because people like using what they know. If you create an intuitive user experience, people are more likely to adapt to change. Anyone who’s ever struggled to link an analyst report to the data source knows that when finding information is hard, it’s easy to give up. You need to give your users a way to manage and share data easily.
An intuitive user experience encourages even the most stubborn person to be ready, and willing, to change. A shared platform will make it easier for everyone to collaborate, and it means that adopting new technologies will be easier in the future.
Change Company Culture
Sharing (data) is caring. Creating standardized processes across all departments benefits everyone and encourages data democratization. More importantly, a data culture encourages data-driven decision-making. This means ideas are valued based on the data — not who is speaking. If a junior employee has the best idea, data culture ensures that idea gets a shot.
Further, teams who work together can lean on each others’ strengths. For example, when your business users and data analytics teams collaborate, everyone makes better, more informed decisions and achieves better outcomes. When senior management provides technologies, policies, and procedures to enable collaboration, everyone wins.
Adopting cloud technologies helps your employees collaborate more effectively. To achieve these outcomes, you need data catalogs that integrate data from a wide range of applications, including features like data search and discovery, data governance, and cloud data migration.
Creating a sustainable data culture means efficiently and accurately integrating data to help prevent future silos, either through the use of scripting or Extract, Transform and Load (ETL) tools. Using these solutions helps break down barriers between teams, allowing them to create a comprehensive data catalog. Now, everyone has the same access to the same data all defined in the same way. This opens the lines of communication and data sharing.
With tools like these, as you continuously bring together data from a wide range of locations, your users will trust the data more. This will enable and encourage data-driven decision-making that will help drive desired business outcomes.
Sign up for our weekly demo to learn more about how a data catalog can help drive data culture through seamless collaboration.
- What Are Data Silos?
- What Causes Data Silos?
- How Are Data Silos Harmful?
- How to Fix the Data Silo Problem
- Final Thoughts