The High Cost of Data Silos — And How IT Can Break Them Down

Despite excellent unifying technologies, data silos still exist in the digital workplace – and they are costing organisations heavily. A string of analyst reports, including IDC’s 2022 ‘Global DataSphere’, estimate the cost of inefficient data operations at millions of dollars per enterprise, every year. And data silos the primary cause.  

Inefficient data makes people inefficient, by wasting their time. It’s not just time spent on search. We often see duplication of effort, with people recreating information or repeating research that already exists. It also slows innovation. Denied ready access to existing ideas, teams are prevented from building on them. Plus, where data access is poor, people are effectively encouraged to base decisions on outdated information. All of which contributes to a poor, frustrating, and demotivating employee experience – which also has a cost. Yet there’s no line on the balance sheet that quantifies this, denying the problem the priority it needs.    

As well as removing a negative, eliminating silos can also add significantly to performance. Companies with unified data access experienced 30% lower operational costs and 41% higher customer satisfaction rates than those with significant data silos. While organisations with integrated data ecosystems were 1.7x more likely to attribute over 20% of earnings to AI initiatives. While those with significant data silos saw 65% of AI projects fail to deliver expected value. 

How Silos Form (Even in Microsoft 365 Environments)

Though costly, data silos are rarely intentional. They tend to develop gradually because of disconnected platform choices, technology limitations, organisational silos, and inconsistent data practices. 

With the constant pressure to grow and increase efficiency department-led technology choices, without IT oversight, are a major cause. Different business areas, such as sales, finance, HR and operations, choose systems to meet their own needs. But without integration, data becomes fragmented across these platforms. 

We see a similar thing with the rapid adoption of useful SaaS tools. This might be DocuSign for contracts, Slack for comms, and DropBox for files. Each has its own approach to data and without a clear data integration strategy, information ends up in isolated silos. 

In both case a lack of integration adds to the problem. Although major departmental systems tend to support integration, often it hasn’t been implemented due to lack of time, skills, or budget. Resulting in employees using manual processes rather than automation. Customer information may be entered into both a sales and finance system manually, often producing inconsistencies. 

In part, this reflects the absence of a central data strategy and/or IT’s poor standing in the business. If there isn’t a clear strategy on how data should be managed, shared, or cleaned, then there won’t be consistency. Each area of the business will handle data in its own way. However, if there is a clear and communicated policy that’s being ignored there’s a much bigger issue. Do the senior leadership team fully understand the importance of IT and see it as an essential, value-adding function of the business?    

Equally, just as a lack of control can cause problems, so too can overly strict controls. This can happen when IT or data owners lock down access to protect sensitive information. Although well-intentioned it can result in others creating their own versions of the restricted data. Silos of data, invisible to the wider organisation, also occur when shadow IT and user workarounds become the easiest way of getting things done.  

Whether you see it as rebelliousness or initiative, such behaviours are indicative of a lack of direction. It’s not just about the absence of a central data strategy, but also about not making it easy for people to do their job. If there’s a central entry point, and a single data source that’s easily searchable, people will use it: they won’t spend their time circumventing it.  

But if people are left to their own devices long enough, things can get frighteningly out of hand. Without a ‘single source of truth’, one customer had data spread across 650 WordPress sites, 22 Jadu sites and 644 SharePoint Communication and Team sites. Bewildered employees didn’t know what lived where or which information to trust.  

How IT Leaders Can Start Breaking Silos

Data silos can be tackled through a set of deliberate, actions that address the technical architecture and the organisational behaviours that keep silos in place.

1. Assess the current state

Start by getting a clear picture of where data lives, how it flows, and where it gets stuck. This means identifying data systems, apps and repositories and understanding how data is stored, shared, and accessed. It should enable you to identify areas of duplication and inconsistency and any isolated silos.

2. Establish a unified data strategy

A central, shared data strategy, that aligns the whole business with consistent practices is key to combatting silos. Work with stakeholders to agree common data definitions and quality standards and determine who owns which data sets. This is difficult to achieve without first securing the buy-in and support of the senior leadership team.

3. Create a central hub

Replace uncertainty with certainty, by creating a central, and staff-friendly home for data. Typically, this takes the form of a SharePoint-based employee portal or intranet.

4. ‘A place for everything and everything in its place’

Help people file and find by standardising the taxonomy and naming conventions used across SharePoint. You can also utilise Viva Connections or Teams integrations to help surface content.

5. Standardise access and permissions

Review data access and permissions to ensure consistency and enable appropriate access without unnecessary roadblocks. Apply role-based access control across systems, use data classification and labelling to balance access with compliance, and replace personal drives with shared workspaces.

6. Prioritise key integrations

Integrate data and systems wherever possible. Look for quick wins, such as syncing customer data between CRM and billing, and focus on those areas with the greatest impact. Native connectors and APIs and integration tools, such as Microsoft Power Platform or Azure Integration Services, can help enormously.

7. Build a culture of data sharing

Technology and polices alone won’t solve the problem, behaviours need to change too. Educate employees to be more aware of good, and bad, practice. Promote the benefits of shared data and recognise examples of cross-functional collaboration. You want data to be seen as a shared asset, rather than a treasure to hoard.

8. Encourage staff to be more data savvy

Empower employees to access and explore data themselves. Deploy Power BI dashboards, connected to centralised, SharePoint data sources, so there are fewer silos built from local spreadsheets.

9. Collaborate across the business

IT alone can’t defeat the data silos. Work with internal comms and/or HR on communications and training initiatives and create cross-departmental groups to further good data governance.

Final Thoughts: Connected Tools Enable Connected People

Silos are just one symptom of a broken digital workplace, and you can discover more in our blog Why Your Digital Workplace Isn’t Working — and How IT Can Fix It. 

Eliminating data silos doesn’t mean you need to overhaul everything overnight. It’s about progressively taking thought-through, practical actions that make life easier for employees. When staff can easily access and share trusted information, they work faster, make better decisions, and collaborate more effectively. 

Whether it’s connecting systems, simplifying access, or encouraging a culture of sharing, small changes can unlock big wins. Break down the barriers, and you’ll build a workplace where knowledge flows and business moves forward. 

The key thing is to get started. There are invariably some quick wins to be had, and the right partner can help simplify, optimise and accelerate progress.