Why data silos matter: Settling ownership of data issues
Modern corporations are becoming more and more dependent on data to operate. In some industries, data pretty much is the business, whether it’s digital content, such as movies and music; social media interactions; or customer surveys and reviews.
The finance industry is increasingly moving online — only around 8% of the world’s money exists as cash. Even traditional industries are becoming increasingly digital. Automobiles are now essentially computers with an engine attached, as are airplanes, with a modern airliner generating several terabytes of data per flight.
With so much data out there, who is responsible for managing it? A survey published by Experian earlier this year of more than 1,000 businesses found that 84% of companies still regard the ownership of data as either solely or primarily the responsibility of the IT department.
In most organizations, such devolving of ownership to IT creates issues, as business lines generally own the budgets and, hence, the power. In a global company, there can be tensions among the central office, regions and operating companies, and between departments, such as sales and marketing or production and logistics.
Each business unit wants to have control of the data that it finds important and is unconcerned about data that does not directly affect it. A finance organization cares a lot about the credit rating of a customer, but the logistics department cares mostly about a customer’s exact delivery address. Marketing is concerned about the characteristics of customers and which segments they fall into, but sales worries about who controls the budget and can make buying decisions.
This understandable focus on the immediate data needs of the day-to-day operations means the completeness and quality of data get ignored. A salesman may create a new customer record for a prospect rather than check to see whether that customer record already exists, and he may not bother to collect additional information about a customer that marketing would love to have because it has no direct impact on his sales target and commission. Worryingly, this problem extends outside the commercial world, with 10% of hospital medical records in the U.S. being duplicated, according to the American Health Information Management Association. These data silos matter because an organization can struggle to get a picture of its overall operations. The effect of all this is that data ends up in independent silos, jealously guarded by each business line or department. An IT department that points out that some data held by marketing is partly duplicated over in sales rarely has the power to do anything about it. This silo mentality has been the driver of many major IT initiatives over the years. ERP was supposed to sweep aside the data silos, but it only created a large silo of its own.
