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Data Silos: What They Are, How They Form, and How to Prevent Them

Communication is important. 

You’ve probably heard that before regarding relationships, but it’s true in other environments as well, including within your business. If you don’t communicate with the other people at your company — and if they don’t communicate with each other — you’ll miss out on leads and revenue.

Unfortunately, it’s common for many businesses to struggle with communication. More specifically, many businesses fail to share all the necessary data across their various teams. That can lead to the creation of data silos, which can significantly hinder your business processes.

But what are data silos? We’ll explore the answer to that question in more detail below, so keep reading to find out more. Then subscribe to Revenue Weekly to receive more digital marketing tips right in your inbox!

What are data silos?

Data silos are large bulks of information within your company that are limited solely to one team or department.

So, for instance, your company might have a sales team and a marketing team, among others. Both of those teams use data related to leads and customers. But if they each collect that data separately, one team could end up with information about those leads that the other team doesn’t have.

It’s natural for different teams to gather different information, but they should then share that information with each other (a process called revenue operations). When they don’t, it creates data silos. That’s why integrated data is so vital.

How do data silos form?

If you’re unsure whether your company has data silos, it can be helpful to look at how those silos form and see if that’s happening in your business. But how do they form?

There are a couple of ways you can end up with siloed data. Here’s an overview of each one!

1. Alienated company culture

The first way you could inadvertently generate data silos at your company is by having a disconnected company culture. By “disconnected,” we mean a culture where your varying teams view themselves as separate entities and don’t really interact with each other.

When your teams become alienated from one another, it stunts communication between them. Consequently, it becomes difficult for them to adequately share data with each other, meaning that data gets piled up in silos.

2. Lack of data integration technology

The other major cause of siloed data is a lack of data integration technology. Integration technology refers to digital platforms designed to integrate and centralize all the data across your business, bringing it all together in one location that all your teams can access.

When you don’t have access to those types of programs, it makes it difficult to exchange data. Every team has its own collection of Excel spreadsheets, and they all use their own software to manage their data, but none of those things integrate together. As a result, the data stays limited to individual teams.

What problems do data silos cause?

We’ve established that it’s not good for data to become siloed, but why is that? What problems can result from data being confined to different teams?

There are several issues that can stem from siloed data, and here are a few of the most common ones:

1. They create inconsistencies

One of the most frequent problems created by data silos is inconsistency.

Often, there’s overlap between different teams. To go back to our earlier example, your marketing and sales teams might be tracking the same leads. But if they don’t communicate, they could end up with very different data about those leads.

Maybe your marketing team notes a change in location for one of your potential customers, but your sales team remains unaware of that fact. Consequently, they won’t be on the same page, and they’ll continue to grow more out of sync over time. 

2. They limit your teams’ performance

Another issue with data silos is that they can limit how much your teams can do. When teams communicate with each other, they ensure that everyone has access to all the necessary information in the company.

But with the buildup of data silos, everyone suffers a lack of information. Each team is unaware of the data the others have, including data that could help them.

As a result, they can’t achieve as much as they normally would. The sales team could notice customer patterns that would help the marketers improve their ad targeting, but if they don’t share it, the ad targeting will stay like it is, and no reoptimization will occur.

3. They create a negative customer experience

The third major issue with not having integrated data is that it can lead to a bad experience for your customers.

Ideally, your company will retain data about the users you’re targeting and use that data to better serve them. But when you’re missing information about those users, or the information you have is outdated or inconsistent, it makes it difficult for you to accomplish that task.

As a result, you could end up repeating the same information to people over and over, or else failing to cover a particular task because you assume another team already has. You could also lose track of a user’s place in the marketing funnel, meaning you’re sending them all the wrong materials.

How can you prevent data silos?

With data silos being a problem, it’s important to prevent them from happening. But how can you do that?

Here are the two main ways you can prevent data silos!

1. Encourage a collaborative culture

The first thing you can do is encourage a collaborative culture at your company. We mentioned earlier how alienated teams can lead to siloed data, so you should make an effort to prevent that from happening. Encourage your teams to interact and facilitate information exchange between them.

When you change the culture within your business, you’ll drastically improve data flow and avoid letting data build up within specific teams.

2. Use data centralization platforms

The other major way you can facilitate data integration is to use data centralization platforms. There are several types of centralization platforms out there, some of which are specialized for specific areas of your business.

One of the most common platform types is enterprise resource platforms (ERPs), which connect all your different data sources and centralize that data in one location. That not only makes it easy for all your teams to access and share the information, but also helps you analyze it.

Whatever type of platform you use, you’ll want to have one that centralizes your business data across all departments.

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