Information silos: Investigating cause and effect
In the business world, information is a precious commodity — possibly even more so than cash. It’s what cements the foundation of your business. It’s what keeps your order-to-cash process cruising along. But if you don’t have easy access to it, it can be your biggest downfall.
Whether you realize it or not, your operations are not immune to what we in the biz call “information silos.” These are wide chasms in your workflow that your information can fall through, most often when data moves from one information system to the next. They halt progress and make it difficult to recover essential information. This leads to poor communication between team members, missing and mis-picked orders, and the general threat of an inaccurate view of your inventory’s status.
Diagnosing where your information silos reside can present a challenge, especially if your order-to-cash visibility is already a problem area. In order to help make this process a little smoother, we’re outlining a few major causes of information silos, as well as the upsetting effects they can have if they go unexamined.
Cause: People as Information Silos
In some cases, information is living rent-free inside one employee’s brain. At first blush, this may not seem like a huge problem. We all have that one person we consider to be the expert of our department, the one we consistently rely on for advice and answers to tough questions. Maybe we get into the habit of asking them for guidance before we even take a crack at a task ourselves. This is where it can become a hassle.
Effect: They’re Irreplaceable, for better or worse
The painful part comes in when that person isn’t readily accessible. What if Jeremy, your warehouse guru and knower-of-all-things, decides to take a well-deserved vacation? If he’s the only one with access to critical information you need to keep churning out orders, you’re in for a world of inefficiency.
Personnel as an information silo means employees can’t answer many of their own questions without looping in other people and resources. Behind every official (or unofficial) warehouse workflow expert is a whole team of employees relying on their intelligence, potentially unnecessarily. While there’s nothing wrong with turning to the experts, it’s important that your workflow has standardized, easy-to-follow processes that anyone could easily duplicate on their own.
Cause: Fear of Over-Sharing Data
As technology continues to expand, lots of businesses find their data in varying states of exclusivity. Since 90% of businesses in 2020 have moved to some version of cloud software, the possibilities for customizing your employee’s access to data are expanded. Managers can easily pick and choose who has access to what information, which can seem like a smart move. Everyone can get to the data they need to perform their job, and any information they don’t need to see is filtered out securely. It’s making life easier, right?
Maybe not always.
Effect: Poor Communication Between Teams
Limiting the amount of data your employees can access can be useful, but it can also lead to inefficiencies. With these information silos, employees only see their individual contribution to the company — whatever branch that might be in. They have effectively no way of seeing the bigger picture of how they fit into your operations.
We all want to feel like we’re a part of something, and if your employees can’t see how they’re contributing to the overall goals of your business, that can be a problem. The moment your employees feel more like a cog in a wheel than a unique asset to your company, morale will dip, and efficiency along with it.
Cause: Splitting Information Between Systems
Running a business requires cooperation between several moving parts. Many businesses find themselves running multiple solutions based on whatever task needs completing.
You might find yourself in a similar position now. That means you’re operating separate solutions for tracking orders, for accounting needs, for project management, and countless more. If you’re relying on all these separate, specialized solutions to complete varying tasks, they’re all housing their own unique data that your coworkers don’t necessarily have access to.
Think of each of these systems as having their own language. They all have different processes, different owners, and different kinds of data. If everyone is speaking in their own language, it can be hard to find common ground without a translator. In this case, the translator is anyone who sees and understands how all these pieces fit together. Without them, there’s little to no opportunity for meaningful collaboration across departments, which is bad news for your efficiency.
Effect: No standardization
When they’re on their own, these varying systems used to manage your business are merely puzzle pieces. It’s a snapshot into one particular sector of your operations.
Imagine if your ecommerce solution and your inventory management solution weren’t compatible and couldn’t easily share data. If your ecommerce staff can’t easily tell how many orders have been processed and shipped, as well as how many units remain on the shelves, your listing will become inaccurate.
Without shared insight between these two solutions, there’s a big risk that you’ll end up selling more units than what you actually have available. The side effects of this can include delays, bottlenecks, and unhappy customers. That’s just one example, but there are countless other scenarios where a lack of consistency can sabotage your order-to-cash process.
A light at the end of the tunnel
Now that you’re familiar with the menace that is information silos, we do have some good news. Information silos don’t have to be inevitable pain points. With the right solution, users can integrate their varying systems under one roof and easily communicate with other departments. A system like this could be a major turning point for your operations — you just need to take the next step.
If you’re curious about whether or not your business is due for a system update, take a look through this ebook. We’ll guide you through a few telltale signs that an ERP system is just what the doctor ordered.