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Are data silos hurting digital transformation?


In an era of seemingly lightning-fast digital disruption, digital business transformation requires a bold vision and an intention to embrace change. With the global digital transformation market expected to reach $2.8 trillion by 2025, leaders are accelerating their transition to digital in their organizations. And as companies correct and adapt to specific strategies along this journey, they need a good understanding of their data to make informed decisions.

Data-driven decisions are needed for digital transformation

The necessary understanding of data-driven decisions is due to the fact that high-quality data is at the heart of all digitization initiatives, whether providing valuable insights or uncovering latent operational efficiency strategies. . And that’s why organizations need to be careful about creating data silos.

Today 73.5% of most large companies are data-driven in their decision-making. In almost every organization, data is collected from various sources to analyze and make business-critical decisions. And while these sources can number in the thousands and millions, the creation of data silos in an organization is a natural result.

Although modern databases and repositories are more robust, they find it difficult to completely protect themselves from data silos, which prevents them from realizing the true potential of their digital transformation initiatives.

The problems of data silos and other barriers to digital transformation

In fact, 89% of IT leaders today view data silos as one of the biggest barriers to digital transformation. Silos often form as a result of a combination of factors, including mergers and acquisitions, disconnected teams, cross-departmental dynamics, lack of data control, and more.

To avoid the formation of pockets of data in organizations, companies must cultivate a culture of sharing data rather than a culture of data ownership. Breaking down silos begins with a cultural shift, requiring a shift in perspective that begins at the top of an organizational hierarchy. Organizations can adopt several strategies to break down these data silos and prevent their perpetuation.

Here is a list of ways to keep data silos at bay

Foster a data sharing environment

Various teams in a company have data at their fingertips because data is knowledge and knowledge is power. Various verticals typically work with proprietary jargon and processes related to their own departmental objectives. Each team sees itself as somewhat distant and separate from the others, and the separate workspaces compound this spirit of disharmony.

All of this leads to a sense of belonging and a reluctance to share data with other teams among individual groups, which can harm the broader interests of the organization. Instead, organizations can nurture a culture of sharing and enable a free flow of information. In doing so, they must also address each group’s concerns about data sharing and ensure a mechanism to maintain data integrity.

Engaging and motivating individual teams to come together and nurture a culture of open data sharing and data unification is key to embracing enterprise-wide data connections. These initiatives solve data silos, inspire positive cultural change, spin the wheel of innovation, teamwork and cross-disciplinary efforts, and foster greater collaboration among leaders.

Make departments aware of the dangers of silos

Typically, various departments work in isolation, even supporting each other to serve a common goal. Businesses need to act as a single unit to optimize available data sets and improve team spirit, productivity, and quality of results. While enterprise-wide information sharing is essential for increasing productivity and generating new opportunities, data silos act as a barrier to information accessibility, weakening overall operational efficiency.

Operational inefficiencies can make it difficult to uncover hidden opportunities. Therefore, educating departments on how data silos endanger organizational success is key to changing the overall approach to data. It is essential to communicate to teams about the benefits of collaboration and the perverse effects of silos. Promoting information sharing, task management transparency, and cross-functional cooperation breaks down silos.

Leaders should encourage team leaders to prioritize addressing silos and guide the entire organization to ensure a shift in perspective. The workforce needs to understand the basics of data silos and what can be done to fix them. They need to be aware of data quality issues that arise from silos. To close the knowledge gap, companies need to communicate the benefits of data sharing and integrity, empowering the workforce to better understand change.

Assess the causes of the creation of silos

If the data silo challenge persists, they begin to grow organically, once again reflecting the organizational work culture. The business setup itself allows silos to build up over time. This happens as each department gathers and accumulates their datasets, each with their own guidelines, metrics, and goals.

Teams working across departments cultivate their style of getting things done or processing data in a way that best suits their needs. These practices lead to the progressive accumulation of silos.

The culture of separate work in various groups compounds the problem of silos. Additionally, data management technology and systems often differ from service to service, covering tools such as spreadsheets, accounting software, or CRMs. Also, most legacy systems can’t handle information sharing because each solution stores and analyzes data separately, which naturally opens the way for silos to grow over time.

Data requires ongoing care and a systematic solution to effortlessly manage and prevent the buildup of silos. Additionally, advanced technology acquired by companies could also generate unintended data silos. Companies that need specialized technology should keep an eye on this aspect.

Establish interdisciplinary teams to oversee

Companies around the world are now centralizing data and sharing accurate versions of data to save time and reduce costs. An enterprise-wide data glossary can be created to offer guidance at all levels on the usefulness and storage of data. These data definitions provide cross-disciplinary teams with guidance on how to understand data, create shared storage, and limit data silos.

Organizations need to upgrade their digital technology to keep up with the changing nature of data.

They must maintain and evaluate data standards in internal and external ecosystems. It is crucial to note that putting all the data in one system will not provide the required result by default. Therefore, it is essential for companies to build cross-functional teams to drive the data integration agenda forward.

Each step should aim for data integration for the whole company, including different departments, to avoid recreating a new set of silos. Embedding data discipline across all departments and being mindful of the inherently dynamic nature of data is crucial.

Creating a roadmap for a smooth removal of silos

With the advent of cloud technology, centralizing data for analysis becomes easier and faster. Cloud-based tools streamline the process of collecting data into a shared pool, whereby tasks that once took months and years to complete now take days and hours.

The roadmap for breaking down data silos should include finding a way to centralize data. A central data repository optimized for efficient analytics is key to finding solutions for data silos. The next thing is to integrate data properly and efficiently to avoid future data silos.

Organizations can incorporate data using several methods such as scripting using write scripts including SQL, Python or other languages ​​to transfer data from siled data sources and in a data warehouse. On-premises extract, transform, and load (ETL) tools can also automate the movement of data from various sources to the data attic.

Cloud-based ETL is a sophisticated cloud-based process that is faster and easier. The process uses the cloud provider’s infrastructure, working proficiently in any environment. ETL tools provide ways to collect data from different sources into a centralized location for analysis and break down silos.

They also address data integrity issues by ensuring that new data is accessible to everyone. Data centralization consolidates data access and control with a data governance framework.

Connected data powers digital transformation

Data silos negatively impact productivity, information, and collaboration. But they can stop being a problem when the data is centralized and optimized for processing and analysis. When an organization understands the value of having a single golden data repository, it inherently changes the culture.

Digital transformation could not truly take place in an organization without first solving the problem of data silos. It takes multiple levels of effort to solve this problem, including a culture change, assessing short and long term tasks, creating cross-disciplinary groups, understanding the data, and a plan to make everything work seamlessly. . .

While it may seem like a daunting task, going beyond data collection and assessment to address data silos is critical to the success of any digital transformation journey. It starts when organizations migrate to a more proactive approach to unlocking the value of connected data.

Featured image credit: provided by the author; Shutterstock; Thanks!

Dietmar Rietsch

Dietmar Rietsch is CEO of Pimcore. A serial entrepreneur with a keen eye for innovation, technology and digital transformation. He is a passionate entrepreneur who has been designing and building exciting digital projects for over 20 years.

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