Data silos, a group of raw data that is accessible by one department or group but isolated from the rest of the organization, are a challenge for many businesses. According to an American Management Association survey, 83% of executives believe their companies have silos, and 97% say siloed data has had a negative effect on business.
For most companies, data silos develop as they grow. Additionally, factors such as outdated or nonexistent technology, poor company culture, and undocumented organizational processes can limit or discourage the sharing of information. These organizational silos may lead to inconsistent processes, disparate data sources or systems, and misalignment across the firm, negatively impacting the organization’s productivity, data integrity, and even bottom line.
Despite the consequences of operating with inaccessible data, many CRE firms are reluctant to adopt new technology. Indeed, roughly 75% of the commercial real estate industry struggles with data silos. As firms grapple with internal silos, implementing a single source of truth to aggregate data from disparate systems is key.
Read ahead to learn how data silos can hinder your firm’s growth and strategies to overcome the effects of inaccessible data.
The Impact of Silos on Collaboration and Productivity
Lost productivity costs U.S. businesses about $1.8 trillion every year; and data silos contribute to this number. Data silos prevent team members from accessing important information and make companies less efficient by slowing collaboration.
A recent study found 86% of leaders consider lack of collaboration as the top reason for workplace frustrations. To this point, the average team wastes over 20 hours per month (or 6 work weeks per year) due to poor collaboration and communication.
Siloed data creates limited access to important information. On average, employees waste 5.3 hours every week waiting for data from their colleagues–or recreating information that already exists. In this time, value-add activities may be neglected, and revenue-generating opportunities are missed.
When leadership establishes data as a key component to the organization’s success, a collaborative, more productive workplace is built. But first, leaders must identify data silos and the behavior that creates them so that they can eliminate them. When teams are on the same page, they are more efficient in working together, solving problems, and adopting new systems.
The Impact of Silos on Data Integrity
What are the major differences between data-driven organizations and those with siloed data? Data accuracy, security, and visibility. Essentially, those organizations with siloed data lack data integrity.
Data integrity, which refers to the accuracy, completeness, and reliability of data throughout its lifecycle, can be compromised when silos exist. When data is scattered across different tools, software, and spreadsheets, it is difficult to secure information, enforce version control, and generate an accurate, holistic view of the data. Ideally, your internal processes should allow users to easily access, manage, and share data, all while minimizing risks through full visibility and centralized management of your information.
Because siloed data is typically stored across multiple databases, inconsistent and inaccurate data are common. Without a complete 360 degree view into the data, firms have limited insights and may unknowingly operate with inaccurate data. And when information is owned entirely by one person or team, there is not an effective checks and balance system, thus creating room for error and minimizing the data’s reliability.
The Impact of Silos on Revenue
Data silos are costly. According to market research firm IDC Market Research, companies lose 20-30% in revenue every year because of inefficiencies. And according to Gartner, business decisions informed by outdated or inaccurate data can cost small to mid-sized businesses over $15 million per year.
Businesses rely on data to set and track company-wide goals and project earnings. Therefore, they must operate from a clean, reliable data source to make the best decisions. But scattered information makes it nearly impossible to keep the data clean enough to derive accurate information. Plus, when data is not available to the right people at the right time, it bottlenecks workflows and hinders decision-making, which ultimately affects the bottom line.
How to Overcome Data Silos with Technology
Today, about 92% of senior executives are concerned about the negative impact of data on their organization. But overcoming the impacts of data silos is not an easy task. Fortunately, a solution like Lobby CRE can simplify the process.
Centralize the Data
The right technology centralizes your data to remove silos and connect your teams for improved collaboration and results. With one single source of truth, your teams can access the right data and share information faster across the entire company. Plus, a single source of truth allows organizations to get a complete view of their portfolio to make informed decisions.
One way to eliminate data silos is to connect your data sources and third-party systems. By integrating systems, teams can identify where the data is misaligned and then fill in the gaps. Reports that are generated from integrated datasets represent a more complete view of your information so that you can make accurate decisions.
Visualize the Data
Data visualization is a method to represent information graphically, highlighting patterns and trends in data to achieve quick insights. The right technology provides data visualization tools to help your team better understand its data sets. A visual display of information makes data silos easier to see and eliminate.
Download the How Technology Can Address CRE’s Data Problems eBook to learn about the challenges CRE professionals like you face while using data to accelerate growth and how you can harness the power of data and technology at your company.