When departments and sectors within an organization or company procure and manage their data systems, they consequently create data silos. For example, data silos may restrict data collected and managed by the marketing department from other departments, such as HR or logistics.
Data silos essentially have far-reaching effects on an organization, such as:
- Teams cannot collaborate effectively
- Planners cannot gain insights by analyzing data from different operations
- Business leaders or senior management cannot conduct oversight of the organization from a central database
- Data duplication
- Integration difficulties, especially integration of legacy systems, can be time-consuming and can affect interoperability
In these and more ways, data silos do more damage than good to an organization that wants a central authoritative data repository. With the proper data management strategies and technologies, organizations can easily break down the data silos and integrate between SaaS solutions.
Integration between different SaaS solutions is essential to understanding financials, operations, supply chains, workforce requirements, customer behavior, and other facets of the organization.
Source: SMB CEO
What is a Data Silo?
A data silo is a repository of data walled off from other systems within an organization. This isolation is largely technological when data systems and applications are not designed to integrate and communicate with others in the same organization.
This isolation could also be institutional where different departments and sections are not designed to share information. An organizational culture that incentivizes departments to operate independently and competitively fosters the development of data silos.
Whatever the cause of data silos in an organization, their existence eventually results in duplicate, conflicting, incomplete, or missing data. For example, when building a robust financial model, data silos can significantly hamper an organization’s project by providing inconsistent financial data from different departments.
The solution to this problem is to begin the journey towards integration between the different SaaS solutions within your organization.
Importance of Integration between Saas Solutions
SaaS integration is a mechanism that connects different software applications thus enabling them to work seamlessly together. The integration bridges the gap between various SaaS solutions ensuring free data flow and automation of processes in an organization.
SaaS integration is instrumental in improving operations at your organization in a variety of ways including:
1. Automation and Streamlining of Processes
Through integration, relevant and correlated data can be streamlined and aggregated. This helps with the automation and simplification of the process of data collection and processing of data across different systems in an organization.
2. Improved Accessibility and Data Synchronization
With streamlined processes, users do not have to wait for manual data synchronization across multiple systems to gain access. For example, if one department changes the data, it is automatically updated across the organization. This ensures real-time data availability and accessibility.
3. Improved Data Accuracy
Real-time updates to the data ensure that the accuracy of the data is improved. Moreover, the synchronization of data across disparate systems reduces any inaccuracies in the data as long as there is no outdated data in the integration framework.
4. Increased Efficiency and Revenue
Integrating SaaS solutions in an organization automates the flow of information between the different subsystems. This eliminates the need for manual and repetitive data entry. This way, users can channel their time and resources into activities that will improve the overall efficiency. This has also been shown to help increase an organization’s revenue potential.
5. Scalability
Modern integrated systems rely heavily on the cloud for data storage, enhancing business processes’ scalability. The integrated ecosystem allows organizations to use a central data storage platform, eliminating resource replication. Moreover, if the organization grows and there is a need for additional storage, the cloud service provider can quickly scale up according to the new needs of the organization.
6. Cost Effective
Managing individual subsystems and the resulting data silos can be expensive and this can accrue extra managerial costs. However, with an integration platform, organizations can effectively manage their financial resources by reducing maintenance costs.
The integration platform also ensures the elimination of repetitive tasks and the need for the operation of data silos. This results in a drastic reduction in data storage costs.
SaaS Integration Methods
Based on business requirements and type of usage, organizations can incorporate the following integration methods:
Source: Flexsin
1. Vertical Integration
This method allows the integration of unrelated subsystems into one functional unit by creating silos based on their functionalities. Each element or layer in the vertical integration platform works upwards, and the integration process is expedited by using only select vendors, developers, and partners.
Vertical integration is one of the quickest methods of integration. However, it is risky and requires a hefty capital investment.
2. Horizontal Integration
This method is also known as the enterprise service bus (ESB). This integration method assigns a specialized subsystem to communicate with other subsystems in the organization. It reduces the number of interfaces connecting directly to the ESB to one. This leads to reduced integration costs and provides flexibility.
3. Point-to-Point Integration
This integration method results in a star polyhedron once they are all connected. Data could be pulled from each system and combined depending on an organization’s needs.
4. Common Data Format
The standard data format was developed to avoid having an adapter for converting data from or to other formats. This integration method utilizes enterprise application integration that enables the transformation of the data format of one system to be accepted in another system.
SaaS Solutions and Data Integration Best Practices
To settle on the best integration method, it is crucial that your organization needs to put in place best practices for successful integrations. The integration best practices should be guided by the following:
- Establish clear goals and objectives
- Ensure data security and compliance with data protection laws
- Set up a monitoring, evaluation, and optimization framework
- Formulate a data strategy
Data Governance Framework
In the process of breaking down your data silos, it is crucial that you have a data governance framework. This comprehensive set of standards, protocols, guidelines, rules, and processes enables organizations to manage data effectively.
The data governance framework ensures that:
- The data quality is maintained
- Policies, rules, and definitions are consistently applied to all data sets within an organization
- Data security is upheld
- Data quality is maintained
- Compliance with regulations and laws
Utilizing a data governance framework allows an organization to manage and secure its data effectively, which can lead to a streamlined and efficient data management process.
Future-Proofing Data Strategy
A future-proof data strategy is essential for every organization looking to remain adaptable and agile in the ever-changing digital landscape. Organizations should keep pace with emerging technologies to mitigate data management challenges and seize new opportunities, such as the use of digital business cards as part of their CRM.
This way, organizations can effectively keep breaking down data silos and optimize the integration between their SaaS solutions and ensure long-term success and adaptability.
Case Study: Successful Data Silo Breakdown
Consider a scenario where an insurance company amalgamated client records, billing, and claim inventory systems. This integration resulted in a comprehensive client profile accessible to all departments, which enhanced the quality of service by simplifying the claim settlement procedures. Moreover, the company improved its organizational culture by optimizing cross-sectional management styles.
Conclusion
Breaking down silos is not just a technical hurdle for an organization. An organization must adopt a comprehensive integration approach spanning technology, governance, and culture. By adopting these strategies, organizations can encourage teamwork and collaboration between departments.
In the fast-paced modern business environment, it is crucial to break down data silos and integrate your SaaS solutions to achieve operational excellence while maintaining a competitive advantage.
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