Why Are There Still Data Silos In 2022?

This article will look at what data silos are, how they can be bad for business, and how you can move away from using them.

The good news is that more and more data is available to businesses than ever before. From customers registering for online accounts to giving you their details in exchange for lead magnets, information is invaluable for helping to make critical business decisions.

However, inefficiently storing data can lead to several problems for your organization. Data silos can not only lead to frustration on your team but also lost sales and inaccurate decision-making.

What Is a Data Silo?

A data silo (often referred to as an information silo) is a data set that only one group of people can readily access. This means other people find it hard to get to this information, or even worse, they can’t access it at all.

For example, a marketing team has a list of people who download a white paper from the company website. The list contains valuable information, including key decision-makers, phone numbers, and email addresses. This data could benefit the sales team, but they can’t access it because it’s not shared. 

The reasons for this silo may vary, but as a result, the company could be missing out on many potential opportunities.

Data silos can either be accidental or created on purpose. Typically, departments have more control over their own data architecture as an organization grows, and that’s when data silos emerge.

What Is the Problem With Data Silos?

As you can see, data silos can cause problems for businesses across a wide range of different industries. Here are just some of the reasons why data silos can impact organizations.

• It causes data to be duplicated. Departments start to collect multiple sets of data when data silos are prevalent. This can waste time and money and means information can quickly become inaccurate.
• It means businesses make bad decisions. Inaccurate or incomplete data can lead to poor business decisions being made. Employees only believe 50% of their company’s available data is used for decision-making. Imagine how more efficient businesses could be if this figure were more significant.
• It can lead to low morale. When departments hold data in silos, it can lead to bad relationships between teams and frustrated employees. Some staff members may feel powerless that they can’t get the information they need to do their job. It’s estimated that some businesses can lose $1.5m worth of employee working hours a year because of siloed communications.
• It can result in inconsistent customer messaging. If one department has one set of data and another department has another, this can lead to an erratic customer experience and mixed messages.
• It can be insecure. Many data silos can be found in excel spreadsheets, Google docs, or even USB sticks. This may not fall in line with your company’s data protection policies, increasing the risk of data breaches and information falling into the wrong hands.

When Is a Data Silo Not a Bad Thing?

You may be wondering if data silos have any advantages within a business. Typically, data silos are more harmful than helpful. However, there may be some circumstances where they can be beneficial, for example, if departments need to control confidential information. 

Take your accounting team as another example. This team has employee bank details securely on file and other sensitive information like addresses and social security numbers. This information does not need to be made available to other people.

However, when there is value for the data to be shared and the security or compliance risk can be mitigated, data silos need to be broken down.

Why It Can Be Hard to Move Away From Data Silos

The main reason why it is so hard to move away from data silos is typically down to six simple words: "We’ve always done it that way."

When data silos are the norm for your organization, it can be challenging to adapt to a new way of sharing information. Departments may have spent years, even decades, with sole access to data sets. 

Some departments can also see themselves as the "gatekeepers" of specific data sets and can get nervous when other teams in an organization can view and edit them.

The Way Out of Data Silos

So, how do we tackle the issue of data silos in the workplace? If you want to open up your company data, here are some ways you can go about it.

• Map your data. The first thing you will need to do is look at all the information you have in your business. Who owns it, where is it stored, and who can access it? This will help you see the scope of the problem.
• Focus on securing sensitive data. Make sure that you know what sensitive data is being accessed by your data consumers. This can be done with a continuous data classification process, making sure that even if new sensitive data is introduced, it is mapped and reported. Make sure your security policies are very clear about sensitive data (for example, which teams can access data in clear-text, and which teams can only access it once it’s masked or hashed). 
• Review your IT and security policies. Creating a solid security policy will help departments understand what they need to do with the data they produce, consume, and process. This will help your data engineering teams enforce the new data architecture.
• Encourage communication. Encouraging departments to talk to each other can help your company know what data sets are available to use. You can do this through regular meetings or using chat software like Slack or Microsoft Teams.
• Introduce a culture change. As we mentioned before, many data silos are created because people don’t know any better. Changing your company culture and putting an emphasis on transparency and cooperation can help motivate your staff. You may even want to elect "data champions" within teams, who will manage the changes and be the first point of contact if employees have questions

Wrapping Up: Why Data Silos Exist in 2022 and How You Can Move Away From Them

We hope this article has given you some valuable insight into data silos and why they can be bad for businesses. We’ve looked at:

• The definition of a data silo and an example of one in use
• Why data silos can cause businesses to make inefficient decisions
• The circumstances when data silos can be good for organizations
• Why do many businesses find it a challenge to stop relying on data silos
• Some ideas to move away from using data silos and open up your company data

If there is one key takeaway from this article, it’s to look at where your data silos are, why they have been created, and how you can work with staff to free their data.