At its core, a data-driven marketing strategy relies on pulling from many data sources to make informed decisions about how to best proceed. Instead of taking a stab in the dark, data-driven formats of progression ensure that all marketing decisions are based upon logic and accurate data sets. The magnificence of data analysis has made marketing a much more stable and strategic domain.
Yet, data silos are directly standing in the way of your business making the most of its own data. Instead of a free flow of data through which different users can take what they need to better inform their decisions, they are left without complete access. While one department may have a wealth of important user data that helps another team function, data silos ensure that this data remains grounded and inaccessible.
In this article, we’ll be discussing data silos, discussing what they are, how they come about, the negative impacts they have on your business, and how to get rid of them once and for all.
Let’s get right into it.
What are data silos?
A data silo is a metaphor of data being contained in one location, unable to move freely. This means data that is trapped in one department or team and does not then flow across your business.
As this data is then inaccessible to a range of other users and departments within the business, it remains trapped and is not particularly useful. Within this situation, there is a complete lack of transparency and communication between departments, causing a whole range of problems.
Especially when running data-driven efforts, data silos mean that you simply don’t have all of the data, making any of your calculations potentially inaccurate.
What are the primary causes of data silos?
Data silos are something that every business may experience, even without knowing it. Especially in larger businesses, where different departments have little interaction, data silos will be much more common than you may originally have thought.
Typically, there are three causes that push data silos from being an infrequent occurrence to something that negatively impacts your business. These are:
- Scaling Quickly – Although scaling your business is great for the company, without proper management, it can quickly lead to issues with your data storage. As a small business has less data to deal with, there is less of a chance of any of it getting lost or of silos forming. Yet, with rapid expansion comes more data than ever before, significantly increasing the chance that data silos begin to form.
- Company Communication – If your company culture is not particularly gifted at interdepartmental communication, then the lack of these direct lines of communication will lead to different departments not knowing what data other departments are holding. Teams that don’t collaborate are more likely to impede the swift transferring of data and will unintentionally start to form massive data silos within their respective departments.
- Technology – Technology, or the lack thereof, is one of the leading causes of data silos. If a data software simply does not have any potential for accurate data sharing across the company, then the people that work within your business won’t be able to readily deconstruct silos. Especially in the case of different departments, one of the technical difficulties is transferring data that might be in different formats into one central database. Without the correct technology, data silos will form as the data is unable to pass freely to a central hub.
While these methods of forming data silos are common, the lucky thing is that they are easily overcome. Instead of worrying about these problems, you can attack the root of them and ensure they don’t occur in your company.
To put it simply, invest in technology, ensure strong communication across your departments, and always be ready for a rapid size change of the quantity of data you’re harvesting.
What’s the problem with having data silos in your business?
Data silos can be detrimental to businesses, ensuring that they don’t have all the information that they need to make the best possible decisions. With only half of the story, many businesses will leap at opportunities they shouldn’t, make bold changes that are unfavorable, or simply not act due to a missing puzzle piece of information.
When discussing the central problems of data silos, three ideas spring up instantly:
- Low Accuracy – Data pools that only have one department’s data are always skewed and inaccurate, decreasing the chance that your data-driven decisions are actually favorable.
- Slow – Individual data sets are clunky, lack further definitions, and will always cause your team hassle when trying to conduct amplified analyses.
- Bad Experiences – If your business is making customer-facing adaptations based on incomplete pools of data, then you’re at risk of adapting your business to something that your customers don’t actually want or need.
- Incomplete View – A company wants to be able to open its data and extract a clear idea of what’s going on. Data silos stop this from happening, only providing incomplete pictures.
These are a few of the impacts of data silos, with this common business problem severely hindering the process of conducting effective data analysis.
How can my business best overcome data silos?
As you can tell, the damage that data silos can inflict on your business can potentially be grave. Without all of the data, your business is always acting with only half of the information they need, leading to inaccurate decisions and company-wide mistakes.
However, there are ways that you can actively combat data silos and promote a more healthy environment to cultivate data. These changes are infrastructural, technological, and societal, with even your company culture playing a role in an effective data community.
We’ll cover three central ways that you can overcome data silos:
- Find a comprehensive data software platform
- Get rid of unnecessary data
- Place collaboration at the center of your company culture
Let’s break these down further.
Comprehensive Data Software Platforms
Part of ensuring that no company accidentally stockpiles their own data is providing a centralized location that users can go to when they need to store data. One of the most effective solutions that businesses can turn to – no matter their size of operation – is a cloud data warehouse.
As these warehouses can scale with your business, you instantly solve the issue of your business receiving an influx of data as it scales. Additionally, due to the ability to compartmentalize your data with ease, a warehouse will provide a digital location where everyone can store their data, no matter which department they work for.
From this centralized location, your data engineers will be able to construct the perfect environment for your business. As cloud data warehouses can receive and collate a range of different data points and data sets, this is the most efficient option for pooling several different sources of data.
By accessing a data warehouse, your team will have access to your company’s data as a whole, with permissions ensuring that they have the ability to find the exact data they need to do their job as effectively as possible.
As you move to a data warehouse solution, you’ll be instantly overcoming both the technology and scalability root problems of data silos. Two birds, one stone!
Get Rid of Old or Unnecessary Data
Old and unnecessary data are sets that your business is storing without having a real reason for it. Almost like hoarders of data, your business might have a tendency to build up large pools of data that is completely irrelevant to your modern-day operations. Although data pools are typically stronger with more data, this only matters for some specific forms of data.
Additionally, if you do turn to a cloud data warehouse solution, then ensuring your data is optimized will save you a large amount of space. Within this space, you can ensure you fill your database with data that departments of your company will actually use. Not only does this make the day-to-day processes of your business analysis more efficient, but it will also save you money on the amount of storage and processing you need within your warehouse.
Equally, if you discuss what forms of data are useful across different departments, you’ll be able to incite a cross-department data purge and get everyone working on the same page.
Collaboration Is Key
While many companies place their central values on honesty, accountability, and loyalty, your business should strive for collaboration. Without collaboration, data silos easily begin to spring up as certain departments either don’t realize their data is important or simply never think to share it.
Considering that 97% of employees believe that communication has a large impact of the effectiveness with which they carry out their jobs, it’s vital that you place this attribute of business at the center of your business.
Collaboration starts with your core values. You should always seek to instill a sense of community at a base level within your business. Through collaborative events, cross-department team building, or simply by having a more open company culture, you’ll be able to build up these networks within your company.
From there, with open lines of communication between departments, your company will be much better at avoiding data silos due to collaboration issues.
Data silos impact nearly every business, especially those that have recently scaled without taking any precautions. However, they are also very easy to get around once you begin to instill the right company values and invest in the correct digital tools.
Moving to a cloud data warehouse will eliminate most of the root causes of data silos. From there, you can actively work towards creating a more open, honest, transparent, and most of all, collaborative company culture. By prioritizing these elements, you’ll ensure that your business avoids the harmful impacts of data silos and can put data-driven decisions at the front of every action.
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