The Cost of Data Silos: Can Your Own Data Be Your Enemy?

One of the biggest threats to your business is not your competitors, stringent regulations or even unreasonable customers. It’s your own data.

When harnessed correctly, your data is your greatest asset. But if handled improperly, it can cost your business dearly. And one of the many ways data can be damaging is through data silos. From revenue losses to expensive mistakes, this article will go through the impact of data silos – and what you can do about them.

A Pricy Predicament

Data silos are isolated repositories of information that are generally disconnected from other data sources. They can be tricky to access and are often not updated, leading to redundancy, fragmented data or just plain and simple wrong information.

When not addressed properly, these silos can lead to poor collaboration, reduced productivity and even costly mistakes for the business.

A Potential Loss of $13 Million

Low-quality data comes at a high price. According to Gartner, bad data costs organizations an average of US$12.9 million year on year. Outdated or inaccurate information can cause missed business opportunities. Duplicate or missing entries can stagger entire operations. Incorrect or insufficient data sources can lead to poor decision-making. And so on.

An organization that notably dealt with data silos is the Tennessee Department of Health (TDH). Serving almost 7 million Tennesseans across 95 counties, the TDH is no stranger to information silos. Even so, it was high time they streamlined the way they managed their data, starting with creating more integrated workflows across their budget, procurement, accounts and record management teams. Using Caspio’s low-code platform, the TDH finally completed the project, which had previously been stuck in development for over a year and set back the department upwards of $100,000 per year. They developed a system that gave them 97% visibility of their 20,000+ assets and greatly minimized information that falls through the cracks.

Over 99% Disuse Rate

Even businesses with good data can be victims of data silos.

Forrester Research found that less than 1% of an organization’s data is ever actually analyzed and harnessed – and not only because these numbers are bad or unusable. It is, in part, because these data are inaccessible. According to Forrester senior analyst Richard Joyce, “Just a 10% increase in data accessibility will result in more than $65 million additional net income for a typical Fortune 1000 company”.

The problem with increasing data accessibility, however, is it must be superseded by a bigger task: data cleaning. This can be costly and take time to deliver ROI; as such, many companies fall into the nasty cycle of losing money due to bad data but being unable to afford to clean their bad data.

Work Efficiency Down by 30%

Beyond the dollars, data silos also drain employee productivity.

A report by Forrester Consulting found that employees spend as much as 12 hours every week simply looking for things. From project files to customer information to company policies, employees can lose 30% of their time trying to find the information they need. And the older the data, the worse it can get.

When data is scattered in different, undocumented places, employees may need to track down specific colleagues (worse if they’re no longer with the company), manually sort through old files and folders or start a new research from scratch. And if they make any new files or records themselves, they could be creating duplicate, non-standard files or even their own data silo. Data silos also hamper collaboration, such as in cases where two teams who have the same end goals but use different data sets where information may not be updated or consolidated.

Eliminating Data Silos

Businesses cannot afford to leave data silos alone. The sooner you can address the problem, the better off your company will be.

Conduct a Comprehensive Data Audit

The first step to eliminating data silos is to understand the sources of your data to determine where they end up. A thorough data audit is essential to identify what data you have, where they are stored, who owns them and how they flow within your organization. An audit will reveal areas of inefficiency, inconsistency and potential for improvement in your data management practices.

Establish Data Relationships

Once you’ve identified the data residing in silos, the next crucial step is to establish relationships between these datasets. Just as in a database, these connections allow data to be related to each other, facilitating a holistic view of information. This relational approach allows you to derive valuable insights from previously disconnected data sources.

Make Data Consumable

To maximize the benefits of your integrated data, make them easily consumable. Create data reports, dashboards, charts and other visualizations that transform raw data into actionable information. This step is vital to enable informed decision-making and provide a clear understanding of your organization’s performance.

Ensure Accessibility

The ultimate goal is to make data accessible to the people who can benefit from it. Data should be readily available to those who need it, whether it’s an executive making business decisions or an intern compiling files for a project. It should be easy to find and retrieve without compromising security. Ready accessibility promotes collaboration, enhances productivity and drives innovation within the business.

Leverage Caspio for Solutions

Fortunately, most of these steps can be done using digital solutions like Caspio. Caspio’s low-code platform provides built-in data management features that simplify data integration, enable relationship-building, provide tools for creating user-friendly reports and dashboards and build a centralized database to eliminate data silos. Through Caspio, you can ensure that the right people can safely access the right data at the right time, empowering your organization with the insights to thrive in today’s data-driven world.

Harness Your Data Properly

Data silos are a formidable challenge for organizations of all sizes, costing millions of dollars each year and impeding operational efficiency. However, with proactive measures such as conducting data audits, establishing data relationships, making data consumable, ensuring accessibility and leveraging solutions like Caspio, businesses can break down these barriers and harness the full potential of their data.

Databases are invaluable in managing and eliminating data silos within your organization. Discover Caspio’s database solutions and see how they can transform your business.