Data has become one of the most powerful tools that businesses can turn to. No matter the industry, whether it’s a B2B or B2C company, data can provide invaluable insight and drive progress. Yet, in order to make the most of this data, businesses need to have a free flow of information.
Businesses that suffer from data silos – structures where data can get trapped between different teams or departments – often end up making the wrong decisions. Without the full scope of information, businesses are unable to clearly visualize what the data is telling them. Simply put, there’s a piece of the puzzle missing.
It’s often quoted that bad data costs businesses upwards of $3 trillion USD every single year. Less of a focus is placed on the location and fluidity of that data. No matter how clean, structured, or useful data is, if it’s not moving through a business and getting to the analysts, it’s useless.
In this article, we’ll turn to the live reality of data silos. We’ll touch on why they form and then move through the best strategies your business can incorporate to dismantle them.
Let’s get right into it.
In this article
Why Do Data Silos Form?
Data silos prevent analysts from creating highly-valuable insight, stopping a clear picture from ever being formed. Typically, data silos don’t form on purpose. Instead, they’re the product of continual missteps from department heads and IT representatives. The very structure of your business can lead to data silos, meaning it’s best to know exactly what to look out for.
Data silos typically begin to form when businesses:
- Act with Decentralization at their Core – While decentralization can be a tool for good, especially in industries like blockchain, which run on this principle, that doesn’t mean it should extend into a workplace culture. If all of your teams run as completely separate entities, with no points of contact or connection across different groups, then data silos are likely to build up quickly. If your teams aren’t communicating, then they won’t be passing data between one another, leading to major problems down the line.
- Unmanaged Scaling – Scaling a business is almost always a fantastic thing; your business is successful enough to warrant the increase in size and services. Yet, when not managed correctly, scaling a business can also lead to data silos forming as more data comes in than the company can handle. Having the best structures in place to receive, collate, and order data will help forego this potential reason for data silos forming.
- IT Decisions – When introducing new applications and platforms into your business, the IT department may not select compatible services. If you have a centralized data storage facility in your business, but the new platform you’ve started using cannot feed data into it, then you’re going to have to split your data into various silos. Always be sure that you invest in tools, platforms, and systems that are compatible with your current operations.
Across these core three areas, data silos can form rapidly. Without proper management, it doesn’t take long for this problem to get out of hand and begin to impact the functioning of a business.
Breaking up data silos as early as possible can help reduce the likelihood of them converting into a major problem.
Best Strategies to Dismantle Data Silos in the Workplace
Once data silos begin to form, it can be incredibly difficult to break them down. More often than not, a business needs to enact structural changes within its operations, rather than just making a few tweaks. That said, the benefits of true data visibility are truly unmatched, making this a top priority for modern businesses.
Here are our top two strategies to dismantle data silos in your workplace:
- Foster a Data Culture
- Turn to Data Structure
Let’s break these down further.
Foster a Data Culture
The culture that you instil within your business will manifest in all areas of operation. If your C-level executives aren’t placing emphasis on the importance of sharing data, then this won’t trickle down to other levels of your business.
Fostering a data culture, where every employee understands the importance of the data you share, is vital for success. Be sure to create guides on the reasons why it’s helpful to share team data with other departments, why an employee should use data, and how data can foster a key part of their team’s strategy.
Once your employees understand the value of the data they handle, they’ll be much more likely to contribute to data-positive practices. Creating a data culture will help ensure the flow of data remains uninterrupted within your business, helping to dismantle data silos and keep your data as fresh, accessible, and visible as possible.
Turn to Data Structures
As we mentioned previously, the data infrastructure that your business has in place could be the make-or-break factor between your company forming data silos or becoming one with complete data visibility. To have a free flow of information, you need to make sure that your business has structures in place that let people share their data easily.
Most of the time, businesses will turn to cloud data warehouse solutions. A cloud data warehouse acts as a centralized repository where all of your different teams can deposit their data. This single location acts as a catch-all, with all data flowing into these sites.
Modern cloud data warehouses come with a range of other benefits and tools that make them a leading solution. If we compare two leading data warehouses, Snowflake vs Redshift, we can instantly see a plethora of useful additions. Beyond just breaking down data silos, this also creates a more positive data culture for companies.
Data silos are a damaging part of businesses which, luckily, can be avoided when approached correctly. In a workplace, data silos are often a reflection of a poorly structured or under-managed culture. You want to ensure that lines of connection are established throughout your business, fostering a more positive place for the exchange of ideas and information.
Beyond just changing your workplace culture, you need to make sure that your business has the correct structures in place to foster this flow of data. By incorporating data warehouses and other centralized repositories, you’re able to give all of your employees a place to turn.
Having the tools and practices in place will ensure that your business can defeat data silos and get the full reward from instilling a data-driven culture.