Breaking Down Data Silos - 4 Key Tips

Introduction to Data Silos

Modern organizations have been leveraging their use of big data to maximize their growth and profit margins. However, in order to effectively do so, business teams must also focus on breaking down data silos.

According to a study, 72% of companies stated that their biggest challenge with sales and marketing was managing metrics and sharing insights. By incorporating key strategies to drive the flow of data throughout the company, owners can achieve their organizational goals.

What Are Data Silos?

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Siloed data will occur in an organization when key metrics are kept within one team's data warehouse and are isolated from other departments. A company's data can become siloed due to various reasons.

  • Structural
Data can be isolated when each department in an organization has its own data storage. If processes for sharing data with other teams are not created, the information will become inaccessible.

  • Technical
Information systems, software, or technology applications that are not synced together cannot effectively exchange and access data. For example, if the company's human resource payroll software is not connected to the employee scheduling system, data about employee's work hours will not be shared.

  • Cultural
Sometimes, an organization's culture may not promote interdepartmental communication. This will result in data silos between teams because they would not know certain data existed or that it was shareable.

4 Tips to Break Down Data Silos

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Data silos can affect a business team's visibility into their performance and organization. This will subsequently create a negative impact on the company's bottom line and profitability. Breaking down these barriers in data will allow departments to have better insights into their workflow and ensure data credibility. This will then empower informed decision-making skills and improve operational efficiency.

Additionally, data unification will highlight synergies between specific marketing campaigns, products, store locations, and sales channels. Companies that are facing data silos in their management can follow these tips to remove them.

1. Integrate Data Management Systems

Businesses that utilize more than one data management system may experience data silos. For example, if a retailer uses disparate software systems for point-of-sale and inventory management, key data regarding sales, revenue, and stock levels will not be synchronized.

To break down these silos, managers should first audit their different management systems and how each of their departments collects data. Then, they should assess how employees use the information and examine whether the data is relevant for other teams.

It is also important that managers talk to their employees and identify if they have challenges when managing data systems. With all this information, it will be easier to determine whether systems can be consolidated together and if new solutions need to be implemented. Many companies will either transition to a central system that manages all data or employ an integration solution to connect their various software tools.

2. Revamp the Company Culture

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Data silos often stem from disjointed and detached departments in an organization. Executives can prevent this by cultivating a communicative and transparent culture in the workplace. They can promote interdepartmental engagement and support different teams that are working together. Furthermore, data silos can be effectively eliminated if procedures are put in place that allows employees to share their team's information freely with relevant partners.

Executives should outline their expectations and values regarding collaboration and communication. By removing the feeling of competitiveness between departments, employees will be more likely to work with each other and share necessary metrics with other teams.

3. Incorporate Collaboration into the Company Strategy

Organizations can break down data silos by prioritizing this in their company strategy and objectives. If a business is already running, executives should take a step back and review their company's structure. This will help with highlighting interruptions in the flow of communication and data between departments. In the case that a silo is identified, the business team should consider reorganizing its strategy.

It is also recommended that business owners create key performance indicators (KPIs) that monitor employee collaboration. For example, managers can track how many interdepartmental projects are completed during a given quarter. Or they can measure how often a department relays data reports to other teams. Regularly monitoring these KPIs will allow companies to see how well the different levels in the organization interact.

4. Upgrade the Company's Technological Infrastructure

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Technology has been created to integrate isolated data sources from disparate systems into a central location. Some platforms are also made to work with other software, eliminating the possibility of silos. Instead of using older, legacy systems that are often incompatible for integration, companies should invest in a digital transformation. By streamlining the data integration process, brands can save money and enhance their efficiency.

Data silos can occur naturally, due to structural, technical, and cultural issues within an organization. Implementing the best practices to eliminate data silos will help companies improve their flow of information and productivity.