What Are Information Silos? Understanding Their Role in Business

What Is an Information Silo?

An information silo is a self-contained information management system that struggles to communicate with other systems. Communication flows vertically, which makes it difficult to share data between unrelated teams or platforms. Information silos are found in many businesses, as management often fails to see the advantage of sharing data across systems, or because of cost and complexity concerns of system integration.

Silos can offer some control over critical information, but they also create real risks, such as inefficiencies, misinformation, and missed business opportunities caused by limited communication and collaboration. In this article, we explain how information silos work, the problems they create, and steps businesses can take to address these challenges.

The Impact of Information Silos on Organizations

Information silos may also exist because managers control the flow of information and access to the silo, meaning that they have an incentive to maintain the status quo. Additionally, the costs associated with integrating the information systems may not justify a change.

An example of an information silo would be the electronic management system used for medical records. Hospitals within a network may be able to exchange information on the patient, but out-of-network facilities may not know of pre-existing problems that could help with the diagnosis because the medical record system is not designed to "talk" to other information systems.

The Mechanisms Behind Information Silos

An information silo is created when departments or groups within an organization choose not to share information or allow for knowledge to be exchanged through information systems with other groups of individuals in the same organization. When different departments in a business do not share the same priorities and work with different sets of data, management may create an environment that discourages communication and collaboration between groups.

Challenges Posed by Information Silos

An information silo can result in problems such as a duplication of effort and redundant job roles. Silos may lead to the development of contrasting systems that can lead to an increase in costs and a lack of synergy. A bottleneck in information results in inefficiency as different departments may be working with a series of alternate understandings for completion of a project. This can easily lead to a number of missed opportunities for the business, or in the worst case, contribute to the overall failure of a company.

As groups work separately and continue to restrict shared access to information and systems, it becomes more difficult to create a consensus on priorities for the entire company. This could lead to employee frustration and result in missed deadlines, misplaced priorities, or an outright failure to achieve business goals. When information is not readily available across the organization, it can result in faulty decision-making based on inaccurate or out-of-date data.