Why Are Data Silos Problematic? The Chaos of Scattered Data

By
Christopher Pinski
Published
May 24, 2024
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Why Are Data Silos Problematic? The Chaos of Scattered Data

Piecing together client information from scattered data sources is slow, error-prone, and exhausting. No matter how hard you try, mistakes happen and crucial details keep slipping through the cracks.

But for professional services firms striving to scale operations, this frantic scramble is all too common. Meanwhile, clients expect seamless experiences, meaning the distractions of discontinuous data — also known as data silos — are costing you customers.

So, exactly why are data silos problematic? We'll look at the specific reasons and how to combat data silos across your business units.

The High Stakes of Siloed Data: Fragmented Client Intelligence

From outright errors to missed engagement opportunities, the consequences of siloed data can strangle a professional services firm’s growth prospects.

Disconnected client details, isolated project info, and fragmented financial records cultivate a lose-lose scenario. In the end, you get inconsistent service delivery compounded by clouded strategic vision.

This fragmentation also complicates the management and optimization of business processes. How? Improper data management prevents the seamless flow of customer data and other information necessary for operational efficiency and strategic planning.

According to a McKinsey report, companies that rely on data-driven customer analytics are 23x more likely to acquire new customers and 9x more likely to retain them.

But data silos hinder this agility, limiting access to relevant data about customers, products, and supply chains. Regulated data sharing between the sales team and other departments is crucial for understanding client needs and making informed decisions.

When Legacy Systems Weigh You Down

While beloved for their familiarity, legacy systems often enable the same data dilemmas they were intended to solve.

That's because rigid, monolithic architectures ultimately cordon off information into impenetrable islands: data silos. This prevents firms from gaining a cohesive view of the client journey, revenue streams, and other key insights.

A black and white image of a decrepid abandoned barn and old silos in the foreground. A modern wind turbine can be seen in the background.

In fact, data silos often occur because of reliance on outdated systems. Organizational structures and separate systems or departments operate without proper integration, exacerbating the challenge of data fragmentation.

Effective data management is essential in the transition to more integrated solutions. A well-planned data management strategy addresses the challenges of data silos by:

  • Establishing a data infrastructure for your own data
  • Investing in the right tools (avoid duplicate data platforms)
  • Implementing metadata management and data governance for optimal data integrity

Together, these actions will help create a single source of truth for all business units.

Case Study: Crispy Tackles Data Silos for Kitt Creative

Kitt Creative, an experienced photography studio, faced this paradox first-hand. Despite top-tier solutions for scheduling, forms, and communications, a lack of integration and proper data management left their info scattered and their operations obstructed.

But when Crispy Software Solutions stepped in with a tailored Airtable-Make integration, Kitt Creative waved goodbye to their data silo problem. Our modern solution revealed a panoramic, 360-degree view of their operations and helped them get back to revenue-driving tasks.

Custom Integrations: The Data-Driven Advantage You're Missing

Perhaps the biggest problem with data silos is that they strangle a firm’s data-driven decision-making abilities.

Even with advanced analytics and AI capabilities, fragmented data sources limit insights to disjointed snapshots versus the panoramic perspective needed to intelligently automate and refine processes.

Fixing a data silo can promote improved decision-making by enhancing data sharing and collaboration.

Example: Solving Law Firm Data Silos

Consider the painfully manual process of managing client-attorney agreements at law firms. Despite leveraging Lawmatics for client data and DocuSign for e-signatures, there's still plenty of manual work — from filling out agreements to status tracking to record updates.

Research suggests that companies may lose up to $1.3M per year due to inefficient processes (Formstack and Mantis Research, via CIO Dive).

But access to unified customer data could significantly streamline these legal operations and improve compliance. Properly implemented, removing a data silo could reduce the need for manual intervention and foster a more efficient and compliant system.

This might sound complex. But what if distilling tons of info into clear, cohesive intelligence was more straightforward than you think?

How Online Business Tools Can Deliver Integrated Data Solutions

At Crispy Software Solutions, our expertise in data integration and process optimization empowers firms of all sizes to finally eliminate data silos.

Utilizing a cloud-based data warehouse (a single place to view and access data from multiple sources) as a foundational element, we centralize fragmented data, thereby eliminating data silos and enhancing business analytics capabilities.

Aerial view of 2 metal silos connected by a walkway

The Power of No-Code and Low-Code Platforms for Business Intelligence

Leveraging no-code/low-code platforms, we seamlessly unify your tech stack so you can:

  • Consolidate disparate data into centralized sources of truth, including data warehouses), to integrate and share data across the organization
  • Extract maximize value from unsanctioned, unstructured data reserves
  • Ultimately unlock AI-driven insights that propel intelligent process refinement

With cohesive, unified insights, your firm gains a real-time strategic compass. This illuminates areas for service personalization, cost optimization, and differentiated client experiences to drive sustainable growth. In other words: you can optimize business processes and make more informed business decisions.

And that's important, because companies with optimized processes may generate 35% higher net profits compared to their less streamlined counterparts (CohnReznick).

Skeptical that low-code holds the keys to conquering data dystopia? Explore the fundamentals and leading platforms in our comprehensive guide: What Is Airtable and How Does It Work? + Use Cases

Data Silo FAQs

Scattered and inconsistent data is costing you time and money. Here are some common questions about data silos and how to crush them!

Where are data silos problematic?

Data silos can negatively impact different departments across your organization. From marketing teams lacking insights into key sales data to data analysts unable to access key metrics, incomplete data and data silos can stunt your growth and slow down your teams.

What is the main problem with data silos?

There are a few main problems with data silos:

  1. It's difficult or impossible to obtain actionable insights and make data-driven decisions using scattered data
  2. Your employees can't operate efficiently if they don't know where or how to find critical data
  3. Similarly, your teams can't work together if they have access to different data sets or are accessing the same data in different ways, creating organizational silos
  4. Monitoring data security across your business operations is much more difficult

What are the negatives of information silos?

Information silos hinder your operations, pull focus from growth and the most impactful work, and can even put company and customer data at risk.

Eliminating information silos and implementing operational efficiencies can improve data quality, foster a more collaborative culture, and even simplify the negative impacts of data breaches. With all your data centralized, you'll know exactly where and how a breach occurred, instead of trying to piece together a puzzle from multiple systems.

Conclusion: Implement Data Governance to Avoid Data Silos

Without a cohesive view of the client journey and operational reality, firms simply cannot keep up with constantly evolving demands.

But there's hope. By consolidating your disconnected data into an integrated system, you’ll gain elevated agility to stay one step ahead. Integrating departmental data across different departments and business units is crucial for enhancing overall data governance and operational efficiency. When you eliminate data silos, you help ensure a collaborative company culture that leverages collective insights for strategic advantage.

A team of corporate employees surround a large desk; all are on different devices but all seem to be viewing the same data set — no data silos here

Want to learn more about how integrating your data can open new frontiers of efficiency, intelligence, and growth for your firm? Explore some real-world possibilities: Data Entry Automation Software: Everything You Need to Know

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Last updated
April 24, 2024

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