What Are Information Silos? Business Problems & Organizational Fixes

BY MARK VAN LEEUWEN, ON MAY 17, 2019

You’ve run the numbers, checked in with different departments for reporting, and you can already see your business has experienced phenomenal growth. The progress feels good, but the journey has been a little hairy.

Just in the course of gathering data to measure your business’s performance, you’ve had to manually cross-reference different documents and chase others. Some departments have added tools to try to streamline data collection and insights sharing, but even those readouts are piling up, and the tangle of tools is starting to look a little bit like spaghetti.

When did these tools, which were supposed to be helpful, start to get siloed?

The reality is that your sales, delivery and finance teams may not be completely in sync. Since different departments focus on different priorities, they can lose sight of the bigger picture of the business. In turn, this leads to unnecessary cycles for gathering the best information to make data-driven decisions, which can cause inaccurate strategizing due to outdated numbers. On top of that, the CRM, invoicing, bookkeeping and project management tools you may have adopted to try to save time end up creating new silos and costs.

To simplify the problems caused by information silos and improve productivity, you need an integrated, holistic view of your business activities, resources and teams.

what are information silos

What are information silos and where are they?

Information silos occur when different individuals or groups generate or record new data, but don’t integrate or aggregate that information for other parts of the business to view or use in a strategic way. These silos can crop up from the CRM tools that sales teams use to close a new project deal, which may not relay for delivery teams that have to manage the project, as well as personnel utilization rate, employee time tracking and finance’s bookkeeping.

As an example with one agency, information silos resulted from the tool sprawl and the spaghetti tangle of their apps and activities. Let’s take a look at the setup:

  • HubSpot’s CRM for prospect and deal management
  • Slack for team collaboration
  • Google Drive for team sharing of Google Docs, Sheets, Slides and Gmail
  • Basecamp for an internal and external team portal
  • Atlassian for task management of development projects
  • A Wiki for an internal team portal
  • Manual spreadsheets for resource allocation
  • Smartsheets for project plans, which show complex work streams and dependencies
  • QuickBooks for finance
  • Workamajig for invoicing

As you can imagine, the number of tools quickly turns into a complicated tangle.

Not only do the tools and information silos increase complexity, but they create other challenges for the business, as well. The discrepancies in information can make quotes slower to convert to cash, the resources quoted may not match the personnel available, and combining data from the various teams is a slow, manual process.

information silo problems

What problems do information silos cause?

Siloed data can cause new pains and discrepancies to arise. Manual data collection across disparate sources is not only a pain—taking time to focus on data collection and away from analysis and insights to move the business forward—but it limits visibility. The lack of transparency across the organization increases your risks for decreased revenue, bad resource utilization and inaccurate data.

You may have inaccurate or delayed forecasting of demand, capacity, revenue and hiring needs. If you don’t have enough transparency, accountability and real-time data throughout sales, your team may not be agile enough to act on potential business development opportunities, or a lack of unified utilization data can cause hiring for upcoming projects to be inconsistent.

Though considered in the pursuit of efficiency, add-ons and extra tools may have adverse effects. Tool buildup increases the risk for unused, unnecessary or redundant costly subscriptions. Plus, you may require additional training or personnel resources solely to support various applications and tech troubleshooting. Tool fatigue can cause your team to use applications less, which leaves important project data unknown and undiscoverable.

The IT team or a not-so-tech-savvy employee are not the only victims of this tangle. The real victims of tooling spaghetti are your business’s transparency, productivity and profitability.

productivity problems

How does removing information silos improve productivity?

Rather than adding services or tools that are one-trick ponies, begin identifying ways to combine competencies based on your organization’s priorities. How do you remove information silos across the business? Probe your team to create a full picture of the tools or blind spots around your organization.

Possible questions to help you get started include:

  • If sales and business development create quotes through the CRM, is the tool able to inform a finance and invoicing package at the other end of the business? Is there a gap between tools that is causing issues?
  • If production and operations manage personnel, how and when do they receive information about new project scope and deliverables?
  • If you rely on spreadsheets or manually compiling data across all sorts of different systems, is there a way to make this data collection less time-consuming? How is this reporting shared with key stakeholders?
  • What’s the cost of using the sum of the tools in one business? What is the opportunity cost of not having data all in one place and providing this transparency to teams?
  • Is there a way for teams and employees to access all the same data from a single engagement point or some other holistic approach?

You may not be aware of potential blind spots, but by examining how various parts of the organization interact (or don’t), you can start to determine walls that can be broken down, dependencies that are important to consider, and new ways to ensure teams have access to the same information, remain engaged and make smart decisions in real time.

eliminating information silos for greater yield

Eliminating silos for a greater yield

By eliminating disparate solutions, you gain greater transparency on information coming from CRMs, finance systems, invoicing, other tools and previously siloed inputs. In fact, by enlisting VOGSY’s PSA platform, Metis Communications, a marketing communications agency, was able to reduce reporting time by 75%.

You start to improve visibility into employee utilization rates and availability, increase billability and decrease over-servicing and over-delivery.

You increase projects delivered on-time and within budget, as well as increase efficiency and project profit margins.

You make more accurate resource and revenue forecasting because you can see real-time data on profitability–such as insights into current projects and expected revenues–from one single view.

With a single source of engagement for your business, there’s less time required for leaders to work IN the business, so you can work ON the business. The fewer information silos, the greater the opportunity for strategically growing your future opportunities. That’s the power of professional services automation solutions like VOGSY.

Interested to learn what a
silo-free business looks like?
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