For almost 30 years, consultants have pushed a simple and credible idea — that silos are bad and need to be broken. This orthodoxy is rarely challenged, but one-third of a century later silos still exist.
Is focusing on breaking organizational silos really the right approach? Or does the problem require a different solution that focuses on data instead?
In the early 1980s, Jack Welch was CEO of General Electric, a company that was widely regarded as inefficient and overly bureaucratic. He embarked on fundamental reforms in the way GE did business internally and became the standard bearer for the “boundary-less organization.”
Welch’s argument was that organizational silos are barriers within businesses that lead to inefficiency. As his mantra took hold, consultants and experts began to talk in increasingly zealous tones of the need to break silos.
However, it’s questionable whether a one-size-fits-all approach that focuses on silos of people really solves what is a more fundamental problem — the lack of a seamless flow of data across the business.
Keep the Silos, but Break the Data Silos
In our data-focused environment, it’s data silos, rather than organizational silos, that make businesses inefficient. Writing in the “Harvard Business Review” in December 2016, Edd Wilder-James argued the focus needs to move away from organizational silos because “there is a bigger and costlier demon that lurks in enterprises. A demon that ... often makes initiatives impossible: data silos.”
The reality is that any business that is unable to make data-driven decisions based on high-quality data will lose its competitive advantage. Ultimately, what management needs to smash are the data silos that reinforce the barriers to information.
The lazy mantra of “break the silo” can actually damage some of the most useful structures that evolve in your business. So how do businesses create a real strategy based on data convergence? Here’s a checklist of the key steps to take when planning a convergence strategy.
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Understand the Silos
The first step is to understand your organizational silos and appreciate why they exist. Understanding how silos operate can be difficult, especially in businesses with an indistinct internal structure. Recognizing that each skill group has its own way of working is the first step toward understanding silos.
But how can we promote reuse of data if we do not have a view of who is using what? Unless we connect the data flow to its business use, data will remain siloed and the organization’s overall ability to effectively create a more coherent and higher-quality data asset will be hampered.
Fill the Gaps
To ensure that data flow is flawless, it’s not just the system that matters. Everything has to work together like a well-oiled machine — and that requires all the parts to be in perfect working order.
Look for gaps in the following areas that could cause the machine to break down:
- Skills: There will not be a free flow of information if employees don’t have the skills they need to collect, enter and analyze data. Training in these areas needs to happen before the implementation of any new system.
- Data: Incomplete data sets are an ongoing problem in just about every industry. Data can’t be made actionable or effectively analyzed if it’s outdated and irrelevant.
- Legacy systems: Data can easily become trapped in older systems. It’s imperative that data be extracted and moved into a format that can be used within any new system before the new system is put in place.
- Processes: All processes should be set up to ensure consistency of data and data flow. Data needs to be harmonized across the business, as does the organization’s data governance framework.
- Technology: Inadequate IT systems can cause a range of problems. For example, employees may not receive up-to-date information at the right moment. This may cause bigger problems, such as execution fragmentation and marketing messages arriving out of sync or at inopportune times.
Find the Right Partner
Finally, you need to find business partners that share your vision. Finding the perfect partner is never easy, and it is likely that your company will partner with several different organizations. But above all, it’s important to share a vision.
Additionally, you likely have several platform providers. To ensure that you achieve true convergence, it’s vital any new system is completely interoperable with your existing systems. Without that, you risk setting up de facto data silos and isolating legacy systems within the organization.