Expert Advice for Medium and Midsize Businesses

The Trouble with Silos and How to Break Them Down

Rudolph Lukez
Director, ERP Product Marketing, Oracle

In many aspects of our lives, silos are not uncommon. I realized this the other day as I went to the grocery store near our house. Each aisle and section is focused on one thing, from produce to canned goods to cereal. Trying to create a great meal while staying within the confines of one aisle is nearly impossible—you’d have pasta but no salad, or a fantastic steak and nothing else.

In prepping for a dinner party, we naturally understand this. We have a holistic view of the meal we want and we approach the store with that goal in mind. That means including multiple ingredients and visiting as many parts of the store as needed to collect them.

The same notion holds true for small-to medium-size businesses (SMBs) wanting to improve communication, collaboration and ultimately have a more comprehensive analysis of their business. Information silos make all of those things more challenging. Finding ways of breaking them down ensures a free flow of data between teams, improves efficiency and makes your company more competitive.

Silos Are Organic—But Not Healthy 

The formation of silos isn’t surprising. In fact, people have a natural tendency to work hard and stay focused in their particular areas of expertise. As a company grows and more people are added to individual teams, team members take on specialized roles and departments cultivate their own preferred technology applications. The silos organically create and compound upon themselves, and become their own organisms.

The finance unit of any small business offers a prime example. Finance uses its own systems for tracking operational expenses, capital costs, revenue and more. But the activity of other teams is deeply relevant to their analysis—and when the information isn’t easily connected, the organization can suffer from inefficiencies, lack of communication, and information gaps. It’s akin to going to the grocery store without a list: You find yourself running and back forth across the store in order to get what you need.

More importantly, though, silos lead to missed collaboration and business opportunities. The ability to see information across business units and then connect the dots is frankly what separates good organizations from great organizations. That type of analysis spurs growth and helps SMBs spot issues before they become big problems.

How to Tear Silos Down

If your SMB suffers from silos, don’t worry—you’re not alone! But the sooner you break down the proverbial walls, the sooner your company will be able to capitalize on the information you already have available. It’s there for the taking; you just need to create and facilitate the data flow. 

To eliminate silos:

Identify information touch points. Figure out when and where data needs to cross organizational units—and how that transaction currently occurs. For example, if Finance needs compensation information from Human Resources, then how do they obtain that information and how often? These intersections are where real business occurs.

Examine the barriers to those transactions. Once you’ve mapped out the information intersections, dig into the efficiency of those transactions. As an organization, you want to root out any existing or potential problems with the information exchange. For example, examine the security of the exchange, how many people are involved, or any information that ends up unavailable.

Breaking down silos with tech. With your SMB’s silos now out in the open, determine what technologies eliminate these information barriers. Then find a solution capable of automating much of the data exchange across your business units and departments. Single purpose solutions only add to the overall complexity. Instead, explore a comprehensive ERP system that aligns to the needs of multiple teams at once—and provides an overall view of the business. This cross-functional investment in your entire company can lead to not only increased collaboration and communication, but also improved employee engagement.

A Silo-less Future 

Breaking down silos is exciting—but what you can do next is even more so. When you’ve broken free from silos, the business components are all functioning as part of the same team. Thanks to cloud-based technology management, you don’t need to be in the same location to connect data and people.

Information sharing becomes more efficient and more accurate. In addition, you free up employees from what were essentially repetitive administrative tasks. I was recently at Modern Finance Experience, and heard from a company that had been managing 2,000 spreadsheets related to their monthly close. Once they deployed our ERP cloud solution, the organization immediately relieved their employees of that burden, giving them the opportunity to do higher-level work. Among many benefits, this creates opportunities for leadership and cross-functional teams, improving information flow. 

That’s really what it’s all about: Elevating the potential of your employees and reaching your goals. With silos gone, they have more and better information to act on and more time to do so.

Think about that grocery trip. Once you navigate the entire store and find everything you need in a timely manner—that’s when you’re able to cook up something really special.

Learn more ways to help your SMB grow and succeed.

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