Disparate, disjointed, disconnected…disappointing. Do these words describe your company’s data? If it’s sitting in solos across your company, the answer is probably, “Yes,” at least to some degree. According to an American Management Association survey, 83% of executives think their companies have silos, and 97% think it’s having a negative effect on business. It is: when decision-makers can’t tap into critical insights because they’re buried in data silos, they miss out on opportunities to improve, optimize, strategize, and, ultimately, compete.
Let’s take a closer look at the data silo challenge and what you can do to move ahead with an effective, up-to-date approach to data management.
Understanding Data Silos
A data silo is created when a system and its users and processes operate in isolation from other systems—and when its output is isolated from the broader business audience. In Breaking Down Data Silos, Harvard Business Review describes the main reasons silos arise:
- Structural: when an application is built for a specific use or department and data-sharing isn’t a requirement.
- Political: when there’s a sense of proprietorship over a system’s data so it isn’t readily shared with others.
- Growth: when, over time, generations of leaders add new technology that’s ultimately incompatible with existing systems and data sets.
- Vendor lock-in: when technology vendors don’t give sufficient data access to its customers.
For whatever reason silos exist in your company—and it’s likely a combination of reasons—it’s inherently difficult to start comingling the data from your various systems, even if everyone is “on board” with the goal to centralize data and insights. The technology architecture behind most legacy systems, in particular, wasn’t built for data exchange. What’s more, the various types of data (e.g. structured, unstructured) aren’t compatible or up to the company’s IT standards, anyway. Data from certain systems may not be analysis-ready because it’s full of discrepancies that require painstaking computer programming to clean up. Unfortunately, for these reasons and others, data silos are simply a reality.
Explore The Data Dilemma – Managing Data During An ERP Implementation.
The Big Data Problem
For many companies with disconnected legacy business systems and software packages in place—think CRM, finance, ecommerce, marketing automation, and payroll, for starters—big data is a real problem. Volumes of data are being generated every day, and there’s just no way to manage it from an organizational standpoint. The data silos exist, and workarounds aren’t a long-term solution.
While individual systems can crank out reports, which are helpful to the specific functional areas they serve, the data’s potential remains limited. Reporting, itself, is often a manual process that requires someone to cut and paste, format, and prepare data for analysis, interpretation, and distribution. The bottom line is that the data and insights are wholly inaccessible to C-Suite decision-makers who need a 360-degree view of the company to effectively steer the organization forward. What they need is a new way to manage their data and analytics.
See also The Factors Driving Cloud Adoption and Digital Transformation in 2018—and Beyond.
Cloud Computing and Connectivity
Companies operate in a connected world that calls for system connectivity and data compatibility. Systems need to exchange data to optimize business processes and give decision-makers the information they need to develop strategies and remain agile. Today’s cloud-native software is built specifically for businesses with plans to expand their IT environment with new enterprise applications. It can manage a variety (and scalable volumes) of data and accommodate new data sources as they’re added. It’s integration-ready, opening up worlds of completely connected, insight-rich data-driven possibilities.
Learn more in 3 Reasons To Put Your ERP System in the Cloud.
Cloud computing isn’t a panacea, however, as migrating legacy data to the cloud and integrating it with other existing processes and systems can be a complex undertaking. This points to the importance of working closely with cloud solution vendors and third-party IT consultants. They have a detailed understanding of a solution’s capabilities as well as the operating requirements of the underlying applications that are being migrated or replaced. Each company’s needs are different and project scopes can vary widely—so upgrading or updating technology calls for careful planning and execution.
Don’t miss The Top 5 Questions Asked by Executives before Moving Into the Cloud.
If you’re ready to explore the most effective way to break down your data silos and adopt a new approach to data management, contact us.
