Introduction

Silos have recently become a trendy topic for business thought leaders, especially the question of how to break them down. All this talk about silos doesn’t mean that your company has suddenly turned into a farm. Rather, a business silo is a mentality or culture that prevents the members of one team or department from sharing information, processes, and technologies with other teams or departments.

According to a survey by PricewaterhouseCoopers, 55 percent of businesses work in silos, without any cross-functional capabilities. One especially common form of business silo is the data silo, in which information is restricted from people who could benefit from using it.

90 percent of IT decision-makers agree that effectively using their enterprise data should be a high priority for their organization, and nearly as many agree that it will give them a competitive advantage. Despite this consensus, however, too many businesses still fall victim to data silos. In this article, we’ll discuss why data silos are so problematic and what you can do to break them down.

Table of Contents
What is a Data Silo?
The Problem with Data Silos
Why Do Data Silos Occur?
How to Knock Down Data Silos
Conclusion

What is a Data Silo?

A data silo is a data set or data source that is only accessible to a particular team or department within your organization. The term “data silo” takes its name from the grain silos on a farm that are used to store items and protect them from outside elements.

While data silos may seem like a natural way of doing business, they can have an insidious effect on your company, preventing you from reaching your full potential. Prevailing opinions now recommend that organizations break down their data silos and allow for the free flow of information as much as possible. 

The Problem with Data Silos

Of course, some degree of division is needed between different teams and departments; otherwise, your organization would have no hierarchy or structure at all. Not all information needs to be shared with each and every employee.

However, data silos become a problem when they actively prohibit or impede people from working at their full capacity. The issues created by data silos may include:

  • Lack of shared insights: No team or department in your organization is an island. For example, annual revenue projections from your finance department may help human resources determine how many people you need to hire. Data silos prevent employees from getting the full picture, causing them to make worse decisions.
  • Wasted time, money, and effort: When data silos crop up, different teams may spend time generating, cleansing, or analyzing the same information rather than working together. This is a major source of inefficiencies and lowered productivity—not to mention higher IT expenses, since it costs money to store multiple versions of the same data.
  • No “single version of the truth”: A “single version of the truth” is the holy grail of data management: a centralized data repository that stores the most recent and accurate version of all your information, without duplicate records. Achieving this ideal is impossible with data silos because the most up-to-date information may be locked away within a single department, preventing others from accessing it.

Why Do Data Silos Occur?

Rather than being constructed, data silos typically occur naturally and unintentionally over time. Three of the most frequent causes of data silos are:

  • Structural: Depending on an organization’s culture and hierarchy, sharing information and collaborating may not come naturally to employees.
  • Political: In dysfunctional organizations, infighting and resentment between different teams may cause them to become insular, protecting their data at all costs.
  • Technological: Different teams and departments may run different technology stacks that don’t naturally lend themselves to integration and information sharing.

How to Knock Down Data Silos

After so much pessimistic talk about the disadvantages of data silos, you’ll be pleased to know that you can work to get rid of them. However, data silos won’t go away on their own; you’ll need to make breaking them down a priority, backed up by a well-considered enterprise-wide strategy.

Below are a few ways that organizations eliminate data silos:

  • Improving company culture: Many data silos occur because the organization’s culture is not one that prioritizes collaboration and sharing, especially if there is bad blood between different teams. To fix these issues, work on healing old wounds and launch new initiatives that encourage employees to collaborate in cross-functional teams.
  • Unifying technology platforms: Other data silos occur due to incompatible technology stacks that can’t easily integrate data. A single department may use five or more databases, each one running untold numbers of applications. Simplifying and consolidating these technologies across departments will help you stop data silos in their tracks.
  • Avoiding vendor lock-in: Vendor lock-in is a serious problem for companies storing their data in the public cloud. “Golden handcuffs” may incentivize users not to leave, or it may be technologically difficult to migrate the data into a different cloud provider. To prevent this loss of flexibility, use a solution that doesn’t make it as difficult as possible to transfer your data out of the cloud.
  • Moving data into a central repository: Migrating data into a repository such as a data warehouse or data lake, where all employees can access it, is an excellent way to destroy data silos. The ETL process is the most common way to integrate multiple sources of data into a single target database.

Conclusion

No matter what they are or why they came about, data silos are a sign of a serious flaw in your organization preventing you from reaching your full potential. The good news is that there are a number of techniques and best practices that will improve the visibility of your enterprise data.

Avoiding data silos is easy with a mature, feature-rich data integration platform like Xplenty. You can use Xplenty to connect all of your data sources with a single pipeline and send information to a data warehouse or data lake, breaking down institutional barriers between teams.

Want to learn more about how we can help deconstruct your data silos? Get in touch with our team of data integration experts!