In business management and information technology, a silo is any management system that cannot work with any other system, which means that it is isolated from the other systems. Silos create an environment of individual and disparate systems inside a company.
In other words, an information silo is a management system of information that cannot communicate freely with other systems. Communication within an information silo is always vertical which makes it difficult or even impossible for the system to work with other unrelated systems; this also applies to work teams and departments.
Why are silos built?
In general, organizational silos do not share the same priorities, goals or tools, so departments work as units or individual commercial entities inside a company. Silos are built because of the structure of the company.
Managers are in charge of a particular department in a company and each manager has different priorities, responsibilities and visions. Sometimes, they are not aware of the priorities and goals of other companies and there is lack of communication, collaboration and team work among these business units.
What problems do information silos cause?
An information silo can cause problems such as the duplication of efforts and unnecessary work roles which leads to the development of contrasting systems that may result in a cost increase and lack of synergy.
A bottleneck in the information results in inefficiency because the different departments may be working on different alternatives to complete a project. This may lead to lost opportunities for the business or, in a worst-case scenario, contribute to the global failure of a company.
As groups continue working individually and limiting the shared access to information and systems, it gets harder and harder to reach an agreement about the priorities for the whole company. This may result in frustrated workers, unmet deadlines, wrong priorities, or a complete failure in the achievement of the commercial goals. When information is not available in the whole company, it may lead to mistaken decisions based on inaccurate or out-of-date data.
How does the elimination of information silos improve productivity?
Instead of adding services or tools it is important that you start identifying ways of combining competences based on the priorities of your company. How can you eliminate silos of information? Test your team in order to create a complete image of the tools or blind spots around your company.
The possible questions that may help you start include:
- If the areas of sales and commercial development create a quote using the CRM tool, can it inform a package from the finances and billing areas in the other end of the business? Is there a problem between the tools that is causing trouble?
- If the areas of production and operations manage the staff, how and when do they get information about the scope of the new project and the deliverables?
- If you use spreadsheets or manual entry of information in all types of systems, is there any way in which this gathering of information is done without spending so much time? How is this report shared with the people interested?
- What is the cost of using a collaborative tool? What is the cost of opportunity of not having all the information in just one place and not providing transparency to the teams? Is there any way in which teams and employees can have access to the same information in one place?
It is possible that you are not aware of possible blind spots but when you examine how several parts of your company interact with one another (or which ones do not), you can begin to determine what things need to be eliminated. When you eliminate information silos, you will get:
- Greater transparency in the information coming from the CRM tool, financial systems, the billing area, and other tools and entries previously stored.
- Better visibility of the utilization rate and workers' availability; you will increase the billing, and, at the same time, you will decrease the service excess and the excessive delivery.
- A greater amount of projects delivered on time and according to the budget as well as an increase in the efficiency and benefits of the project.
- More precise predictions of the resources and income because you can access real-time information about the profitability, such as information about the current projects and the expected income from the beginning.
With just one source of information, managers and leaders have more time to devote to their work. Remember, the fewer information silos, the greater will be your chances of making your future opportunities grow strategically.