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Siloization

  • Glossary

"Siloization"

This glossary explains various keywords that will help you understand the mindset necessary for data utilization and successful DX.
This time, let's think about "siloization," which is useful when thinking about what IT systems and organizations should be like.

What is Siloization?

Siloization (or siloed) is a term used to describe a situation in which IT systems or organizations are divided into separate, isolated parts, and are unable to work together as a whole.
In particular, this term is used to point out that such fragmented situations are causing problems, such as when IT systems introduced by each department are isolated and unable to work together, when data is fragmented and company-wide data utilization is not progressing, or when problems of sectionalism arise within the organization, and overall optimization is not being achieved due to the isolation of each part.

Understand the origin and meaning of the term "siloization"

"Siloization" is a term that is used quite often, but I think there are many people who have heard it but don't really understand what it means. Let's understand it clearly below.

Siloization is a metaphor using the word "silo." It is used when pointing out a bad situation (it is generally not used as a compliment). The "silo" used in the metaphor is the object in the photo below. As it is a word of foreign origin, it is not easy for Japanese people to understand and does not work well as a metaphor, but it is a metaphor using this image.

A "silo" is a place where grains and livestock feed are stored for long periods of time, and is often a round tower-shaped building like the one in the photo. Silos have a different purpose than ordinary buildings, so they do not have the openness that ordinary buildings have. It is not easy to enter from the outside, and they are sealed off from the outside world to prevent rain and moisture. In fact, they are designed to "actively deny" access from the outside world, to prevent rodents and other animals from getting in and to protect against theft.

Siloization is a metaphor that uses the impression and atmosphere of a silo, asking, "Aren't you closed off from the outside world like a silo?" It is used to point out the problem of being isolated and shut out from the outside world.

Many things in the world are becoming "siloed"

I hope you now have a good understanding of the concept of "siloization." Siloization is known to be a problem that tends to occur in various fields around the world. As an example, I will introduce examples of siloization in "IT systems" and "organizations."

Siloization in IT systems

Siloed IT systems are a very common problem. Therefore, your company's IT is likely experiencing some sort of siloed IT problem. Furthermore, in many cases, siloed systems are not created intentionally, but rather occur without you even realizing it.

IT implementationthat seems to be without any particular problems:

Imagine a workplace where IT has not yet been introduced. What would happen if you decided to start using IT in that situation? The accounting department introduced an accounting system, which made clerical work much easier. Next, the manufacturing department introduced a production management system, which also became more convenient. The momentum to introduce IT spread to other departments, and the sales department introduced a sales management system. I think this type of introduction process is quite common.

IT implementation is progressing independently in response to needs, and each department is seeing solid results. It may even be considered exemplary IT implementation. However, this process is also a typical example of how silos can develop.

If you think about it, your IT systems are "siloed":

If you think about it, the systems that have been introduced are not connected and are separate from each other. For example, if someone new is hired, the employee list in multiple systems must all be updated individually. Another common problem is that data entered into the production department's order management system is also entered into the accounting system twice.

This type of problem is often taken for granted, and it can be difficult to even notice that it exists. Even if such a problem does exist, it is often covered by operations such as manually re-entering data each time, and people often think that "it's just the way it is" and don't even realize that it's a problem.

Each system is properly implemented and working properly, and there are no problems in that respect. However, the "systems" are separated and not properly connected, which causes unnecessary work and other problems. This situation is also called "siloization."

Siloization in the "organization"

"Siloization" is also a term often used to describe problems facing organizations. It refers to a situation where cross-departmental cooperation is not working well, a situation also known as the drawbacks of vertical division or sectionalism.

Doing things well can also lead to silos:

Just like silos in IT systems, organizational silos are not always created out of malice or negligence.

For example, the sales department works daily to ensure that sales activities are carried out effectively. The organizational culture of the department, including rules and ways of doing things, is refined for this purpose. This is healthy for the department itself. However, this often leads to differences in rules, ways of doing things, and desirable ways of thinking with other departments.

When this happens, even though (or perhaps because) each department is doing its job properly and functioning properly, it can become difficult to build cooperative relationships that transcend departmental boundaries.

Silos are commonplace

Once you become aware of the existence of such problems, you will realize that such problems are commonly found in various fields around the world. If you know the term "siloization," when you notice such a situation, you will be able to effectively share your awareness of the problem with others.

Also, if you say "distributed" instead of siloing, it gives the impression of pointing out the "way of distribution itself," which has both good and bad characteristics. By pointing out "siloing," you can "point out only the problems" of what is happening. It can be used as a convenient word to point out only the problems and awareness of issues in common situations.

What problems arise when silos occur?

Let's take the examples of "IT systems," "data," and "organizational problems" to think about what specific negative consequences can arise from silos.

Duplicate the same data or functionality

For example, it is common for employee lists, business partner lists, and other data to be duplicated in multiple systems. When updating data, it is necessary to update all the data in each system, which not only requires extra effort and cost due to multiple management, but can also lead to data inconsistencies and problems if you forget to change data in one system.

Additionally, there are cases where system functions are duplicated, such as when each department introduces its own cloud service for schedule management, which can result in extra IT costs.

When an organization is siloed, it is easy for business functions to overlap between departments, and waste occurs when different departments solve the same business problems separately.

Working across "silos" becomes difficult

If each department implements and operates its own IT system, even if IT can improve the efficiency of each department's activities, it can hinder major cross-departmental initiatives.

For example, if the sales and production departments try to closely coordinate information on order prospects and production capacity, operations will have to be carried out across systems, which can lead to a large amount of manual work every time something happens, making it difficult to operate effectively, and can even lead to a decline in business productivity.

When data silos become an issue, it can be difficult to access data outside of the silo, which can prevent insights and innovations that would have been generated if the data had been visible.

When silos exist within the organization itself, cooperative relationships across organizational boundaries, such as between departments or branches, generally do not function well.

It becomes difficult to carry out company-wide activities, optimization, and transformation.

Because business-related data is scattered across multiple systems, it can be difficult to utilize data from a company-wide perspective. For example, it can be difficult to efficiently gather analytical information for business decisions.

While it's common to struggle with manually gathering data from various sources within a company for monthly management meetings, this is actually a problem that arises because of disparate data and systems. Insufficient data collection makes it difficult to make appropriate decisions. Inability to quickly gather data slows decision-making, leading to missed business opportunities and delayed response to problems.

Siloed organizations or IT systems can sometimes prevent major business improvements across departments and branches. Even when trying to promote new initiatives, the ideas that emerge from within the company are often limited to new business that merely improves existing operations, hindering company-wide initiatives and new business initiatives that would only emerge if the company's thinking itself were changed.

How to deal with silos

What should you do if "siloization" occurs?

"Unifying" also creates problems

For example, if you have separate IT systems, you might first think that it would be a good idea to replace them with "one system that is unified across the entire company." If you abolish the IT systems that were introduced in each department and instead introduce a software package that covers all of the company's operations, then you can certainly unify the systems into one. In the case of data, the idea is to create a data infrastructure that is common to the entire company and store all the data there, solving the problem of silos. If you have multiple systems that are siloed, then just having one system will eliminate the problem.

Although centralization has many advantages, it also has its drawbacks. The benefits of each department independently implementing the system that is best for them and using it effectively in their work are inevitably lost, and the centralized system tends to be imposed on everyone, often with inconvenient methods. The system can become so large that it becomes difficult to implement and use it flexibly, and it can also become difficult to make detailed modifications in the future.

Even in organizations, even if they are often referred to as one team, unreasonable centralization and standardization can cause problems within the organization, leading to confusion and a decline in vitality.Even if integration appears to have eliminated divisions and the organization appears to be clearly organized from the perspective of management, it is meaningless if the functions of essential departments themselves become dysfunctional.

"Unifying" can sometimes be meaningless

Furthermore, even if centralization is easy to understand in theory, when you examine it individually and specifically, there are cases where centralization has little benefit in the first place. In other words, there are often cases where there is no real harm in leaving things siloed. The functions and roles between departments are so different that there is little point in going to the trouble of cooperating. This is likely to be the case when the functions of each department in an organization are well divided.

Also, talk of "unifying" can sometimes creep in for reasons outside of one's own company. When "selling a company-wide unified system," the current system is sometimes criticized for being siloed, as a justification for claiming it's no good. In this way, the old system is abolished and a new system, such as an ERP package, is introduced, only to find that essential business operations no longer function. Because this sort of thing actually happens quite often, some people may have a negative impression of claims that tout company-wide optimization.

A "connecting" mindset can eliminate silos

There are other options besides "putting everything together." Improvements can be made by thinking in terms of "connecting."

Let's say that every time someone joins the company, it is a hassle to register them in the employee list of various systems within the company.By linking and synchronizing the data from each system without unifying the systems, you can take advantage of the strengths of each department's system and alleviate the problem of silos.

Even cross-departmental initiatives between the sales and production departments can sometimes be resolved by linking and coordinating their systems. By automatically linking order forecast data from the sales department's system and spare production capacity data from the production department's system, you can advance the digitalization of cross-departmental activities while still taking advantage of the convenience of your current systems.

If it is difficult to utilize and analyze data across the entire company, the problem of silos can be solved data integration the data needed for analysis from each system and collecting it in a DWH, etc. If the only reason is to see analytical reports at management meetings, there is often no need to replace the systems of all departments.

The problem of organizational silos also has many data-related issues.

Not just silos, but any organization has some kind of problem, and some of these can be resolved by improving the organizational structure. However, there is no ideal organizational structure, and in most cases, you will have to choose which trade-off to make from several realistic options (functional or divisional organization, decentralized or centralized, etc.).

Let's say your organization has a problem with silos. For example, the sales and development departments aren't working together well. Or the East Japan branch and the West Japan branch are acting independently and not cooperating. While this is also an issue with organizational structure, it can sometimes be solved or alleviated by how you handle data. By making good use of the power of IT, you can increase the options available to your organization and business.

Let's say each business division has its own separate IT system, creating silos. There are things you can do without the hassle of restructuring or system integration. If the problem is that you can't make optimal decisions across the company, you can collect data across business divisions to make the numbers visible, allowing you to understand the company-wide situation and make optimal decisions across the company.

Let's say the sales department's order taking activities and the production department's production activities don't mesh well, causing frequent trouble between the departments.If this is the case, by linking the order forecast information in the sales department's sales management system with the production capacity information in the production management system of the production department and the inventory information in the materials purchasing system, it should be possible to achieve a good collaboration between production planning and sales activities.

There are also things that can be done in innovation and the creation of new businesses. If there are new business ideas but they don't come up, or if useful on-site insights are being discarded without being utilized, perhaps the situation can be improved by establishing an information infrastructure that allows "insights" and "ideas" as data to reach the people who need them within the company (for example, even if it's just by allowing employees to freely connect with each other on Slack).

Nowadays, it is becoming necessary to have close cooperative relationships with other companies and to cooperate with other industries beyond traditional boundaries. While it may be possible within a company, unifying IT systems with other companies is not realistic, and groundbreaking alliances with other industries may mean that the very concepts of data and systems are fundamentally different. Cooperation while preserving each other's differences and independence will become increasingly important in the future.

The idea of "connecting" is an approach that can eliminate the problem of silos while "making use of differences and mutual independence." It not only solves problems with internal IT systems, but can also solve organizational and management issues. Furthermore, given recent trends, it can be said to be an approach with great potential for the future.

"Connecting" technology that can effectively solve the problem of silos

Even if we understand that one way to effectively solve the problem of silos is to "connect" IT systems and data by linking them together, the next question is "how to achieve this" and "whether our company can effectively utilize such an advanced approach."

Certainly, efforts to utilize the independence and uniqueness of each part without forcing unification of the whole can simply lead to chaos if not implemented well. In order to effectively combine and utilize IT systems, isn't it impossible unless the company has engineers capable of full-fledged programming and develops the system in-house? You might think so.

There are methods that allow you to efficiently develop "connections" using only a GUI to link the diverse IT systems and data within an organization. These are "connection" technologies known as "EAI," "ETL," and "iPaaS," such as "DataSpider" and "HULFT Square." By utilizing these, you can smoothly and efficiently realize flexible integration processing of data and IT systems.

Can be used with GUI only

Unlike regular programming, there is no need to write code. By placing and configuring icons on the GUI, you can achieve integrated processing with a wide variety of systems, data, and cloud services.

Being able to develop using a GUI is also an advantage

No-code development using only a GUI may seem like a simple compromise compared to full-scale programming. However, if development can be done using only a GUI, it becomes possible for on-site personnel to proactively work on cloud integration themselves.

The people who understand the business best are the people on the front lines. They can rapidly create the necessary things themselves, such as data utilization, cloud utilization, and the creation of cross-departmental collaborative processes, which is an advantage over a situation where they have to explain things to engineers and ask them for help every time something comes up.

Full-scale processing can be implemented

There are many products that claim to allow development using only a GUI, but some people may have a negative impression of such products as being too simple.

It is true that things like "it's easy to make, but it can only do simple things," "when I tried to execute a full-scale process it couldn't process and crashed," or "it didn't have the high reliability or stable operating capacity to support business operations, which caused problems" tend to occur.

"DataSpider" and "HULFT Square" are easy to use, but also allow you to create processes at the same level as full-scale programming. They have the same high processing power as full-scale programming, as they are internally converted to Java and executed, and have a long history of supporting corporate IT. They combine the benefits of "GUI only" with the proven track record and full-scale capabilities for professional use.

What is necessary for a "data infrastructure" to successfully utilize data?

Of course, the ability to connect to a wide variety of data sources is necessary, and high processing power to process large amounts of data is also required to firmly support actual business operations. At the same time, flexible and rapid trial and error led by the field is also essential.

Generally speaking, if you want high performance and advanced processing, the tool will tend to be difficult to program and use, while if you want ease of use in the field, the tool will tend to be easy to use but have low processing power and can only perform simple processing.

In addition, it is also desirable that the candidate has advanced access capabilities to a wide variety of data sources, especially legacy IT systems such as mainframes and non-modern data sources such as on-site Excel, as well as the ability to access the latest IT such as the cloud.

There are many methods that meet just one of these conditions, but to successfully utilize data, all of them must be met. However, there are not many methods for achieving data integration that are both usable in the field and have the high performance and reliability of a professional tool.

No need to operate in-house as it is iPaaS

DataSpider can be operated securely on a system under your own management. With HULFT Square, a cloud service (iPaaS), this "connecting" technology itself can be used as a cloud service without the need for in-house operation, eliminating the hassle of in-house implementation and system operation.

Related keywords (for further understanding)

  • EAI
    • The IT initiative to break down silos by "connecting" systems through data integration has been called EAI.
  • iPaaS
    • iPaaS is a cloud service that provides the power to "connect" systems and data.
  • Loose coupling
    • This is a concept of creating a system by combining small, independent parts in order to overcome the problems of a unified "monolithic system."
  • Cloud integration
    • Using the cloud in conjunction with external systems and other cloud services. In order to successfully introduce and utilize cloud services, achieving cloud integration is often as important as introducing and utilizing the cloud itself.
  • Excel Link
    • Excel is an essential tool in the use of IT in the real world. By effectively linking Excel with external IT, you can make the most of Excel's strengths while smoothly promoting IT use.

Interested in our "connecting" initiative to eliminate silos?

If you are interested, please try out our products that solve the problem of siloed IT systems and businesses by using the concept of "connecting."

The ultimate tool for connecting data: DataSpider, data integration software

"DataSpider," data integration tool developed and sold by our company, is a "connecting" tool with a long track record.

Unlike regular programming, development can be done using only the GUI (no code), without writing code. This means that it can be used by business personnel who have a good understanding of the business and can grasp the specific issues surrounding their company's silo structure.

There are many tools available that allow simple integration, but this tool is easy to use, even for non-programmers, as it only has a GUI, and it also has "high development productivity" and "full-scale performance that can serve as the foundation for business (professional use)." It can smoothly solve the problem of "connecting disparate systems and data," which is hindering the successful use of IT.

We offer a free trial version and hold online seminars where you can try out the software for free, so we hope you will give it a try.

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