How siloed software systems can hurt your company’s finances
As businesses grow, the importance of using their data strategically to achieve their goals and making use of information in an effective manner plays an essential role in remaining productive and profitable. In the world of rapidly growing masses of data that needs to be processed in a timely manner, effective data management is becoming the most important thing all companies need to adapt into their day-to-day activities in order to remain competitive.
Most businesses do this by using numerous siloed systems for different operations, and as a company starts to grow, there is a natural progression for using additional software systems for more business processes. However, if these systems that are responsible for so many different aspects of the company have no way of communicating with each other, and never intermingle and share data amongst themselves, it has to be done manually – with time and effort that a lot of businesses cannot afford to spend.
Having to manually centralize and process data from each system can lead to many communication issues and inefficiencies that the business needs to spend additional time and energy on. Using siloed software systems and failing to effectively use data can lead to a variety of challenges that all have an effect on the company’s processes, as well as creating an environment that is not sustainable long-term.
One of the main aspects of this unsustainability comes from the potential harm it can cause to profitability – below are a few examples of how using siloed systems can have a negative impact on a company’s finances.
If it takes longer to fulfil day to day activities which could have been avoided by utilizing integrated systems, it can have an effect on all areas of the business and can disrupt productivity. If different teams use different systems and datasets, the manual process and time it takes to individually process information from all of them can hinder efficiency and consumes the efforts that could have been focused on the core activities of each employee. Not to mention the time and effort it takes to train new employees for understanding all the different systems that are in place, which adds additional administrative burden on the business that could be avoided by more effective data management.
Lack of real-time visibility
If business-critical decisions need to be made based on data that has been manually collected from several different databases and systems, often with time delays, creating a situation where companies review data that is not accurate anymore, it greatly increases the risk of poor decision-making. When data is stored throughout multiple systems, it becomes extremely difficult to centralize it into one coherent set of information that business executives can use to understand what is going on beneath the surface of a company. And by the time the information has been properly processed and decisions are being made, very often they have to be made based on out-of-date information that is prone to many errors – this is a position no company wishes to be in if they want to remain competitive.
The costs of investing in new systems
Many companies invest in expensive systems for different types of processes, which in some cases is necessary, but not the only possibility. New systems do not only generate financial costs but consume the time and energy it takes to implement them, which might not always be the best financial choice on the long run. It is worth investigating whether a new system is going to do a better job than the existing one, especially if the existing one can be used in an environment where the problems rooting from using several different databases and their management is solved with the help of data integration.
Potential harm to customer experience
Maximising the potential of every customer interaction is essential. In order to be able to communicate effectively and offer accurate information and support, the speed with which the company can oversee each individual issue is key for offering the best possible customer experience. The company needs to meet their expectations in a timely manner, and if there is ever an issue with delayed responses or time-consuming processes due to the challenges of separate datasets, it is going to be reflected on customer retention rates. Effective data management is essential for the business to remain competitive, so they can keep their current customers and attract new ones – and without using the opportunities of data integration, this could prove to be a challenge.