Data silos are dangerous. While it’s human nature to collect and share information to have it available when we need it, teams tend to think they are the only people who need it. They’re wrong. In this article, we describe what data silos are, why they exist, how they impact the supply chain, and – more importantly – how to remove them.

What are data silos?

Data silos are areas where data is stored separately from other parts of the business. Conga says they are a “repository of data controlled by one department or business unit and isolated from the rest of the organization.”

Are data silos the biggest supply chain silo? Many think they are. In a comment on an Inbound Logistics blog post asking this question, Carl Schweihs, President and COO of PeopleManagement, said, “Data. …[T]he lack of good data or lack of access to it can hurt everything from productivity to shipping.” Nearly a third (32%) of all responses mentioned data in response to this query. 

Why do data silos exist?

It’s natural for teams to build up information over time. They might share it with other team members, their company’s leaders, or collaborators. But because teams operate separately, they think of themselves and every piece of information they work with as separate from other groups’ or even the company’s goals.

Sadly, when it comes to effective rebate management, nothing could be further from the truth!

While teams may have separate budgets, different goals, and varying priorities from other departments or divisions, they have far more in common than they think. This invaluable data often lives in separate data repositories and becomes a data silo when it is inaccessible. 

Data silos often happen in large, decentralized organizations. This challenge is particularly common in contracts that go through multiple iterations, like rebate deals. But they are also often created when businesses expand rapidly or when mergers and acquisitions occur.

How they impact the supply chain

In organizations, data silos hinder business operations, prevent the flow of information, hamper data collation, and make it almost impossible to use data analytics to get a sense of the bigger picture.

In the supply chain, the same thing happens with far more severe consequences. 

Data silos exist in the supply chain for a good reason. Before connected computing was commonplace, the logical way to deal with complex supply chains was to break information down into chunks and separate it. If separate parts only needed this information to function, everything worked. Today, however, our interconnected supply chains require collaboration – and effective information sharing is key to success.

Removing data silos improves visibility

An EY report on breaking down silos in supply chain execution said, “One of the largest barriers to overcoming supply chain silos and complexity is the lack of consistent visibility across disparate systems and organizations.” Reuters says that 60% of logistics service providers have found that end-to-end visibility yields the best ROI in their current supply chain execution processes, according to their publication, The State of Supply Chain Execution 2021.

Data silos are dangerous because they create data inconsistencies. For example, the finance and sales teams may see different versions of the agreement in a rebate context. If one team operates based on outdated information, things could go wrong. And if the difference affects the financials, things can go very wrong indeed!

Data silos also result in incomplete data sets, duplicated data processes, and inconsistent data. That’s not just a problem internally – because data siloes can be a cause or symptom of a siloed business mentality which hinders effective collaboration – it’s also a data privacy and protection risk. And that creates a compliance risk.

How to remove data silos

“To gain visibility across the supply chain, these individual silos must be broken down and connected through a unified, data-driven system.” That’s what the same report by EY says. We agree.

-       Software

EY recommends “investing in innovation and using data-driven intelligence not only to overcome supply chain issues but also to build agility and resilience for future disruptions.” They say, “Being able to deploy analytics on top of an interconnected and enriched data foundation provides modern businesses with an immense opportunity for finding efficiency, reducing waste, and generating new avenues for innovation.” But, while the report said 30% of logistic service providers indicated a perceived lack of ROI in adopting new technologies, we have shown that Enable’s rebate management tool gets an average ROI over three years of 400%. Part of this is because of the efficiency of using cloud-based technology. They say, “Moving to the cloud not only enables businesses to remain agile by quickly scaling their IT environment and supporting infrastructure, but to do so at a lower cost than going the traditional on-premises route.” 

The right collaboration software provides an enriched data ecosystem and scalability on demand and allows organizations to embrace unprecedented growth, unlocking the potential for collaboration.

-       Collaboration

Powerfully, the EY report says, “Operating as distinct entities is no longer functional, and businesses that fail to adopt these collaborative models will see increased costs and reduced efficiency.” How does one ensure collaboration works effectively? By removing data silos.

Centralizing your rebate data in a single, easily-accessible system reduces technical incompatibilities and cross-functional dependencies, allowing all stakeholders to operate more efficiently and collaborate effectively.

Benefits of removing data silos

We’ve all heard the phrase, “With great power comes great responsibility.” Today, the corollary is, “with great data comes great power.” 

Organizations that can access data about their trading programs are information-rich. This helps all trading partners make informed decisions. As Howard Cook said in a blog post on harnessing the power of your rebate data, data can tell you about potential risks or areas of underperformance and also showcase opportunities to increase growth or performance. You can also measure your growth by seeing how the data changes over time.

But there’s a caveat: You can only get these benefits if your systems are connected! If you want to use granular rebate data effectively and combine data from different sources to get insights like the rebate value of stock in warehouses or distribution centers, ensure you have deals that cover your entire range of products or want to consolidate earnings or spend on trading partner rebate programs, you must remove data silos!

Beautiful things happen when data flows seamlessly through systems and between trading partners. Efficiency improves, as do relationships. It becomes possible to see the bigger picture. Planning improves. And risks can be identified and reduced. But data has to be accessible, integrated, efficient, and accurate for it to be valuable.

Conclusion

To conclude, here’s another quote from Inbound Logistics. One respondent says the biggest supply chain silo is data flow throughout the supply chain. How does he propose resolving this? Simple:

“Embedding cross-functional metrics, dashboards, and (ideally) organization enables informed decision making, transparency, and value company-wide. The more teams know about the full value chain; the more successful each team will be.”

- Omer Abdullah in Inbound Logistics

Is it time to connect teams, make informed decisions, and improve transparency and value company-wide? Are you ready to maximize your data visibility with the help of a rebate management system and extract strategic insights from your rebate data? Then it’s time to eliminate those silos using powerful rebate management software.

Get in touch, or start your free trial of Enable’s powerful rebate management software to make data silos a thing of the past.