What Are Data Silos and Why Are They Bad?

Departments within a company generate data silos when they secure and handle their own data systems. Data silos are common, but they can contribute to greater inefficiency within an organisation. 

So, what are data silos and why are they bad?

Essentially, data silos are information stores which are useful to the company division that produces them.  

As the data is only accessible to some parts of a company, the data is siloed inside a business. Data silos continue to grow as the number and variety of these information resources grow. 

Data silos are bad as siloed information creates issues with sharing data and working with different departments. Data quality typically decreases due to information discrepancies that can converge over silos, which creates unhealthy data. 

Data should be easily accessible and user-friendly throughout the entire organisation. If the data is hard to locate and use, or if there is a lack of trust in the information when it is eventually found, it won’t further the decision-making or analysis stages. 

Let’s explore more about data silos and why they are bad, including the signs that an organisation has a data silo. 

What Are Data Silos?

Data silos are information stores that are only accessible by a specific division or team, but isolated from the rest of the organisation. Data silos are usually found in medium to large businesses, as these have a wider scale of operations and a higher quantity of teams. 

The name data silos is related to grain silos which are used in agriculture. Like the way grains are stored in a separate silo to keep them safe against damaging outside elements, departments regularly store their information separately from the rest of the business. 

Here are the signs that your organisation has a data silo:

• Teams reporting contradictory information
• Specific information is accessible by certain teams but inaccessible to others.
• Departments working with out-of-date information

If you notice these signs, you’ll need to look into your data management system and work out if data silos are behind these issues.

Why Are Data Silos Bad?

Essentially, data silos are bad as they decrease productivity and expend resources. Either numerous departments store the same information, or they store correlative data in separate locations.

Let's explore the disadvantages of data silos in more detail:

1. Delaying Company Operations

Just a single data silo in a department can slow down business productivity. Numerous silos over the organisation make it even harder for employees in a business to make the most of important data that’s hidden away in data silos. 

For example, a sales department might have useful insights into customer purchasing behaviour, but if this information is in data silos, it isn’t accessible to the product development team. This means that the department misses out on chances to create products that better meet customer needs. 

The lack of access to valuable customer insights can lead to poor product development, creating goods that don’t align with market demands or customer expectations. This can cause missed revenue opportunities and a poor competitive position. 

The disconnect between departments can cause duplicated efforts, as different departments may unknowingly work on similar projects or collect the same data separately, wasting time and resources. 

As a result, data silos not only hinder day-to-day operations but can also impede long-term strategic growth and success.

2. Inadequate Data Research

An important part of good research involves accessing as much important information as possible, so you can obtain a complete picture of the matter you are exploring. 

Data silos can obstruct these attempts, resulting in missing data, or leaving out crucial data that could influence these results, including the following steps that occur based on the results.

For example, take a healthcare organisation that carries out research to improve patient care and outcomes. 

The research team aims to look into treatment protocols for patients with chronic conditions, like diabetes. The team plans to look at data from patient records and treatment history to determine which plans have the best long-term results. 

If the research team only has access to data from a hospital’s internal patient management system, due to data silos, they may only have access to inpatient care details. Critical data from outpatient clinics and specialists, which are stored in separate systems, won’t be integrated into their research. 

As a result, the research team might miss important insights, such as how patient-reported experiences correlate with treatment efficiency. This incomplete picture could lead to recommendations that fail to address the full scope of patient needs, potentially resulting in less effective care strategies.

You can get a more realistic picture through initial research when information can move easily across departments. This allows you to shape and direct survey questions better, enhance efficiency and finish with improved datacentric results. 

3. Lack of Security

When data silos are widespread within an organisation, it increases the chances that data security protocols will vary between departments, leading to inconsistencies in security. 

This lack of uniformity also means that there isn’t a standardised way to communicate and respond to potential security threats across the business. This can leave a business at risk of damaging information leaks or data breaches that could affect clients, irreversibly damaging an organisation’s reputation. 

Eliminating data silos and linking all available data means that information can be stored or accessed in a single place. This makes it easier to find problems or signs of glaring security issues. 

If a data breach or leak does happen, a centralised data platform means that you can address these problems swiftly, which curbs the amount of damage to this data and your organisation’s reputation. 

A centralised data platform also permits consistent application of security protocols, which makes it easier to enforce access and monitor data usage across the company. 

Having data in a single location makes it easier to implement comprehensive security measures, carry out regular audits, and quickly identify vulnerabilities. This unified approach improves overall security and ensures all departments are aligned in their efforts to protect sensitive information.

4. Poor Data Quality

Data needs to be trustworthy, reliable, and of quality, or it won’t be useful. Poor data quality can even be worse than having no information at all, as the findings can lead to incorrect conclusions and further distrust. This can also affect your professional reputation if individuals within a company believe you are sharing defective data. 

Siloed information stored between different databases can have contradictions between different divisions, which can cause doubt and confusion between various departments.

Data that is stored in silos doesn’t usually age well, as any out-of-date information becomes irrelevant and harder to obtain as technology modernises. Information on a centralised data platform is used more often and is more valuable. This means there are distinct motivations for keeping it fresh and removing any discrepancies or repeated data.

A centralised platform improves data management efficiency, as an organisation implements updates and corrections organisation-wide, so everyone has access to accurate, current, information.

This also improves overall data quality and increases trust among departments, enhancing decision-making and collaboration. 

We hope that this post helped answer what are data silos and why are they bad, including the disadvantages of data silos which can affect your organisation. 

How We Can Help

Data silos may seem harmless at first, but they are a huge problem that modern organisations face today. 

One of the best strategies for data management is keeping data in a single location. A centralised data location lets you choose how your data is stored and ensures that all departments work with constant, updated data. 

At Configur, our central data management platform stores all data into one, easily accessible repository. This eliminates data silos and removes barriers between different teams, providing data consistency across an entire organisation. 

Our platform helps you streamline data integration, improve data quality, and bolster security, helping your organization make important decisions and maintain a competitive edge.

Give us a call on 01633649263 to discuss your needs, or book a meeting with a member of our sales team to find out more. 

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