"Silos build the wall in people’s minds and tie the knots in their hearts” ― Pearl Zhu, "IT Innovation: Reinvent IT for the Digital Age"
In 2001 I co-authored a book, "Building the Customer-Centric Enterprise," which was built around a single definitional tenant:
Customer Relationship Management (CRM) is aligning business strategy, organization structure, culture and customer information and technology so that all customer activity builds immediate value for the customer and long-term benefit and profit for the company.
That book was all about tearing down silos, both organization and technological. Fast forward 17 years and it is clear that the silos, at least on the data and technology side, have multiplied rather than diminished. This is causing significant challenges for marketers.
Persistent Data Integration Challenges
According to the DMA Statistical Fact Book, the two most significant barriers to achieving data-driven marketing success are integrating data across platforms and data quality and completeness. Further, understanding customer interaction data across all channels is the number one challenge for marketers.
The CMO Survey shows even more sobering statistics. It reports integration of customer information across channels shows no improvement. On a scale of one to seven, this capability has registered at approximately 3.5 annually since Feb. 2011. Information about customers shared across business units and functions is also still not up to par: this capability registers as 4.6 out of a possible seven.
The data integration challenges we face today are not surprising considering the sheer number of technologies in today’s martech stack, many of which create or store their own copies of customer information. CRM and sales automation, marketing automation, campaign management and contact optimization, customer data platforms and customer decision hubs, master data management, and data lakes, data warehouses and data marts are just a few of the more significant technologies that require or create customer data stores. Larger organizations will have many if not all of these applications coexisting in a single IT architecture. Add into this picture legacy transaction applications, SaaS solutions, and one-off departmental databases and the silos multiply exponentially.
No Silver Bullet to Dismantling Silos
Most alarming is the prognosis for the future. In its marketing trends for 2018, Marketo highlights a Forrester study predicting that the approximately 100,000 software vendors of today will grow to 1 million hyper-specialized companies by 2027. If we are not careful, the data silo problem will simply continue to grow. While there is no silver bullet, there are steps companies can take to disarm if not dismantle the data silos.
Develop a MarTech Strategy
A strategy for martech will be critical for marketers in the coming year. Gauging the magnitude of the problem is a good first step. What capabilities exist, are they being fully leveraged, where are the integration gaps, how many have their own customer data, etc.? Once the existing data silos are understood (this includes marketing and CX technology, sales and service automation applications, web and mobile applications and analytics) the assessment should expand to include channel data, transaction systems and other outlying sources of customer data.
You are looking for gaps in technology, disintegrated sources of data, incomplete information and independent applications that are not or cannot be integrated. Chances are good that the integration gaps will be substantial and will need to be prioritized. A good starting point for prioritization is to map data and integration needs to marketing, digital transformation and CX goals. Integration issues impacting the higher priority goals take precedence. Customer journey maps can also be used as prioritization tools. Pain points identified via the journey maps that could be solved by augmenting or integrating information can be prioritized by severity.
Get Tough on Acquisition
The vast set of shiny new tools available in the market can be very tempting, but if you want to dismantle data silos, you need to make tough decisions. The martech strategy can help here.
Every potential purchase should come with a clear integration plan and budget. If the money or resources for integration are not available, reconsider the purchase. Closely examine vendor solutions for their ability to integrate with other applications. Consider closed applications or black box solutions only as a last resort. Likewise, purchasing new capabilities should be weighed against the possibility of using that budget for integration of existing data silos. Wherever possible, integration should win out over acquisition until the data silo problem begins to diminish.
Don’t Let the Clouds Obscure Your View
Software as a solution (SaaS) options are clearly here to stay, and the benefits (ease of implementation, cost savings, etc.) are indisputable. However, not all SaaS solutions are created equally from an integration perspective. These systems have a strong propensity to become data silos in their own right, particularly when purchased by business units independent from IT. We strongly recommend thoroughly evaluating any SaaS purchase for its ability to easily integrate with existing applications. The rule should be: no integration capabilities, no purchase. Involving integration professionals (typically your IT department) in SaaS acquisitions is a must.
Understand: There Is No Virtual View
Of customers, that is. The one shortcut that companies cannot afford to take is skipping the single customer view. Marketers called identity management their number one priority in 2018 for a good reason. It is difficult to achieve and digital channels complicate the situation significantly. The temptation to implement multiple customer profiles is quite strong today because many large technology applications come with their own customer profile. Attempting to match across these applications on the fly is difficult at best and fraught with peril at worst. Picking a single customer master application and doing the block and tackle integration work as applications with customer databases are added is a critical step to tearing down customer data silos. Multiple disintegrated customer databases is never the right answer.
Reach Across the Aisle
This final step may go against the grain for many marketers, but it is critical. Regardless of who purchases and implements martech solutions, maintaining a close relationship with IT is a must. While many marketing, CX and digital transformation departments are incorporating technology skills, the integration efforts needed to disarm customer data silos will reach well beyond the marketing department. These integrations may well require modifications to legacy applications, changes to systems owned by sales and service departments, augmentations to customer master systems, and modifications to analytical data warehouses and data lakes. Working closely with IT is likely a prerequisite to implementing your martech strategy if dismantling data silos is a strategic goal.