What are information silos and why should you break them?

What are information silos and why should you break them?

To stay competitive in today’s business environment, many organizational leaders leverage data. Marketing managers, for example, use data to better understand their customers and improve their initiatives. Chief financial officers look at data to analyze the company’s financial strengths and weaknesses and propose corrective actions. HR managers turn to data to enhance employee retention and hiring programs.

Overall, by analyzing data, business leaders are able to make better decisions. However, what they sometimes fail to have is a comprehensive, 360-degree view of their organizational data because of a common issue called information silos.

What are information silos?

Information silos are sets of data held by one department within an organization that are not readily or fully accessible to other departments. These usually start to form as the business grows, which leads to the creation of more departments and office locations, each generating and processing data using a variety of applications.

For instance, the accounting department relies on a bookkeeping software to manage finances, while the sales team uses another program to keep track of leads. These applications are often incompatible with each other, so departments have difficulty sharing data. At other times, teams are simply unaware of how to integrate their IT systems, which impedes the flow of information within the company.

Why should you get rid of information silos?

There are a lot of issues that can arise because of information silos, such as:

1. Unnecessary business expenses

Having too many separate IT solutions increases the risk of unused, unnecessary, or redundant costly subscriptions. Plus, each IT solution may require additional training, hardware, or staff to support and troubleshoot it.

2. Manual data gathering

With information silos, companies will have to painstakingly gather data from different departments and cross-reference disparate documents to have a complete view of their organizational data. Such a huge endeavor will likely take a lot of time — time that could have been better spent analyzing data and generating insights to move the business forward.

3. Inaccurate and/or delayed data

When a company has information silos, they run the risk of making business decisions based on inaccurate data or outdated numbers, which can result in operational inefficiencies, poor forecasting of demand and capacity, and decreased revenue, among many others. Lack of access to real-time data may also prevent the company from being agile enough to take advantage of business opportunities.

4. Departmental silos

With each department having their own datasets, they can easily lose sight of the bigger picture of the business and end up prioritizing their own goals and projects over those of other departments. Not only will departmental silos result in missed or failed opportunities for communication and collaboration, it also often snowballs into unhealthy competition, office politics, a culture of distrust, and eventually organizational dysfunction.

For example, if the marketing team launches a massive campaign without consulting the logistics department, they may experience delays in the shipment of their advertising materials. If they fail to properly coordinate with the finance team, they may have difficulty with disbursements because of cash flow problems.

5. Inconsistent or fragmented customer experience

When a customer engages with a brand, they usually interact with different departments in a company. At the start of the customer journey, the sales team reaches out to the customer to drive adoption. Once the customer has already availed the company’s product of service, the operations team takes over.

With information silos, the customer is treated by the operations team with zero knowledge of their preferences and history of interactions with the sales team, which can be very infuriating for the customer. If the customer was very happy at the time of the purchase yet frustrated during subsequent interactions, you won’t be able to quickly pinpoint the issue because information silos prevent you from seeing the overall customer experience.

How can you get rid of information silos?

A great way to eliminate information silos is to combine your business’s disparate programs into a single platform using a software integration tool. Doing so will help streamline access to isolated datasets and enable the efficient flow of data across your organization.

You may also opt to have an all-in-one data management solution that can consolidate different data sources into a central hub. This central data hub will not only ensure data integrity and enhanced decision-making, but it will also foster collaboration and communication between departments.

If you need help implementing any of the abovementioned IT solutions, you can turn to Cutting Edge Network Technologies. We serve businesses in Orlando, Tampa, St. Petersburg, and across Central Florida. Get in touch with us today!

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