The Dangers of Siloing Your Data

The Dangers of Siloing Your Data

When you take a moment to break down the daily processes that allow a business to operate efficiently, the results can be rather overwhelming. Between accounting, supply chain management, CRM and everything in between, there tends to be a great deal of information flying around at all times. Juggling all of this information can be challenging enough as it is, but what about when none of these systems talk to one another?

If you haven’t already figured out, this scenario represents what is often referred to as “data siloing.” Your accounting department deals with more information each day than they know what to do with, but they’re drawing from a separate source of data than your IT department. Even if there is a small amount of crossover happening, each system is working from its own data pool, which makes moving in the direction of data transparency rather difficult, if not impossible.

Need a few more reasons to avoid data siloing? Here are just a handful of dangers associated with this all-too-common practice:

1. Data Silos Ignore Important Relationships

Growing and improving upon business strategies is something that sometimes requires a bit of analytical work, and data can be very helpful in this regard. Comparing data helps to discover relationships that might not otherwise present themselves in plain view, many of which can be used to inform future business decisions. Often, these scenarios occur when data between systems is analyzed against each other, which is nearly impossible if your data is siloed. There may be links between a company’s ERP financial systems and its supply chain management, for example, both of which may work from different data silos, thus making analysis futile.

Siloing your data means only ever having a surface view of what’s really going on within your organization—something that certainly won’t do you or your colleagues any favors.

2. Data Silos Waste Resources

When all of a company’s data is being pulled from a single well, there is ample opportunity for each department to create workflow patterns that save time and energy, thus also helping to save money and cut down on the amount of resources that are being utilized. There’s no struggling to connect the dots, no overwhelming confusion associated with where or in what system a specific piece of data is hiding. This may sound like an ideal scenario, and it is—it’s also the exact opposite of what happens when data siloing occurs.

In almost every case, data silos can be expect to reduce efficiencies and waste resources. The solution to this, of course, is to break down the silo and get these systems speaking to one another properly.

3. Data Silos Increase the Likelihood of Mistakes and Errors

There’s no getting around the fact that mistakes are going to occur in business, no matter how confidently you and your staff go about daily processes. There are things that can be done to reduce the occurrences of mistakes and errors, however, and they shouldn’t be simply taken as rote. Indeed, one of the biggest contributing factors that allows for simple, yet costly mistakes to be made is that of miscommunication. If you’re dealing with a remote staff or even just a staff that is relatively large, data siloing will increase the issue of miscommunication tenfold.

The good news regarding data siloing is that these issues tend to occur accidentally. Once identified, a data silo can be fixed with a little bit of effort. The more work you can do to “de-silo” your data as much as possible, the greater your organization’s chances of success will be going forward.