We live in a data-driven world where relevant information can help companies streamline their business operations at various levels. However, you need to collect and collate data from every touchpoint to improve decision-making – especially if it pertains to the customer experience. This is why organizations need to avoid data silos.
A data silo is a collection of data held by one group that is not easily or fully accessible by other groups in the same organization. Siloed data makes it difficult for marketers to present the right experience that customers expect, as they are not able to tap into the entire picture of the customer journey. Data silos can prevent your organization from beating the competition and hold your organization back from achieving its greatest potential.
How much customer data are we talking about? According to a TechJury report, in 2020, every person on average generated 1.7 megabytes of data per second. As tech writer Phillip Britt writes in his article for Destination CRM, all of that data isn’t available to all companies, but depending on the company and the type of data, a good portion of it is. While some companies such as Amazon excel at fully utilizing all customer data at hand to recommend purchases based upon previous orders – for but one example – most businesses fall far short. Why? One major reason is that siloed data prevents them from fully leveraging customer information.
Silos – Great for Storing Grains, But Not Customer Data
After all, the process of customer engagement occurs across all lines of business – from sales, to marketing, to service, customer support and beyond. When these interactions occur within each department – that is, in silos – they never break out to permeate, inform and elevate the larger organization. Says Jonathan Moran, global product marketing manager at SAS, “The result is an organization that doesn’t iterate, learns, and improve based on those interactions. Often the customer experience is what pays the price.”
The Risks of Siloed Data
Data silos have been a persistent problem for decades. According to Jeff Mosler – CEO of virtual answering service Nexa – even systems intended to provide a unified view of the customer “… didn’t integrate with others as expected, while other companies have yet to make the investments in centralized data and analytical systems. Many companies still have separate CRM, contact management, and other systems with limited integration between them.
“Many companies still have antiquated technology, antiquated operations, old CRM, or operations that are not set up to benefit from real-time diagnostics, assessment, and behavioral change. It’s hard to implement a real-time learning technology. It’s hard to train up a workforce to leverage from real-time diagnostics. It’s also hard to train models and statistical models, machine learning models that offer the right results and guidance on behavioral change. So, while it’s easy to market these types of solutions, it’s difficult to implement these types of solutions.”
As for specific risks that siloed data poses, Qualtrix provides the following list:
Data analysis is more difficult – Information silos can pose problems when it comes to data analysis, as the information may be stored in formats that are inconsistent with one another. There’s a lot of time-consuming manual work to be done in standardising the data and putting it into new compatible formats before any useful insights can be gleaned from it.
Access issues can slow down data research – You may hit confusion around permissions and information access hierarchy where silos exist, as the level and nature of security can vary between siloes. When you’re benchmarking data or looking to put together a longitudinal analysis that re-examines older material or pulls in information from different parts of the business, this can create a significant lag factor. It slows down work and degrades the ROI associated with projects.
Work and effort is duplicated – When there’s limited visibility across an organisation, members of different teams can end up doing the same work in parallel. In these situations, access to shared data could have saved time and effort. And as well as being resource-inefficient, there’s a wasted opportunity to collaborate and share experiences between teams.
Siloed information goes hand in hand with a siloed culture – When data is siloed, it often points to a siloed workplace and a company culture where vertical divisions work independently and nobody shares information outside of their own domain.
As well as the practical benefits of releasing siloed data, the process of integrating company data can also help chip away at overly rigid team structures where knowledge isn’t being shared and used to the company’s best advantage.
Data security is compromised by organisational silos – With no overarching control over how data is gathered and analysed, there’s a greater risk of data leaks. That’s because if employees are running their own research, or storing data on non-approved applications, there’s a greater risk of the data being lost or otherwise compromised.
How to Eliminate Data Silos
Data silos can prevent employees in your organization from providing an excellent experience to your customers that not only encourages them to continue doing business with you, but to purchase additional products or services. Marketing specialist Indrajeet Deshpande offers the following recommendations for eliminating data silos in his article for Toolbox Marketing.
Unify data management systems – The first step is to start understanding your company’s departments, processes and the tools they use. Take into account the methods and tools used for data collection. Also, focus on data silos in the following categories – customer account data, customer operations data and customer experience management data. After assembling the data, find out if you can merge different systems. However, if you can’t merge them, make sure you look for an enterprise-wide solution that allows you to implement standardization. For example, a robust CRM system can help solve most of your problems.
Alter your company culture – Large organizations have different compartments within the same department. In most cases, these departments tend to work in self-contained niches with limited interactions with their peers in other departments. There is no need to make radical changes in your organization. However, what you need to focus on is promoting cross-departmental interactions. Cross-departmental interactions can develop a better working relationship among departments, dismantling data silos and promoting harmony. Following a top-down approach can help achieve this shift.
Pay attention to data integration capabilities – Another reason for data silos is the stand-alone solutions used for various functions ranging from CRM, email marketing, social media to automation. These tools generate their own data and this leads to the issue of standardization. To tackle this, before implementing these solutions, evaluate if they integrate within the existing ecosystem. Many applications offer their API to allow integration. Look for alternatives if a solution doesn’t have integration capability.
Prevent stacking up of data silos – Once you eliminate the data silos, it is necessary to ensure that they don’t arise in future. You will be implementing new applications in the future to better cater to your department’s needs. To avoid data silos piling up again, whenever you’re evaluating a new software, speak with stakeholders across multiple departments, figure out how to manage the existing and the new data with integration or IT professionals. This will lessen the future problems due to data synchronization issues.
Set clear expectations – It’s obvious that data silos have been accumulated over a long period of time with immense amounts of collected data. Therefore, whenever you set out to work on your data, make it clear to the stakeholders and decision-makers to avoid making any headlong decisions about the existing data. Do not look at it as a set-and-forget tactic. It’s a long-term plan, and once you have devised the right strategy, you need to stay at it. At every step of the way, be sure to check that you are moving in the right direction. Always maintain data backup so that if something doesn’t go according to plan, you have a copy of data to fall back on.
The Take-Home Message
Dismantling data silos takes time, a clear strategy, effort and diligence to prevent old bad habits and practices from slowly creeping back. When you have up-to-date data and everyone remains on the same page, it is easier for your company to provide an excellent customer experience. Up-to-date data helps you understand your customers’ needs, choices, interests, preferences, and other relevant information – which allows you to anticipate their needs and be ready to meet them!
An effective cloud-based CRM like eZnetCRM helps you analyze your customers’ needs, allows you to integrate different software, and provides a robust analytical and reporting capability. Our blog post – “Does Your CRM Meet Your Needs?” – covers this topic in detail.
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