Is Your Company Being Held Back By Information Silos? 4 Ways to Change That

What is an information silo and a silo mentality, and why is it called a silo? Here's everything you need to know.

"An information silo is an information management system that is unable to freely communicate with other information management systems," according to Investopedia. "Communication within an information silo is always vertical, making it difficult or impossible for the system to work with unrelated systems. Information silos exist when management does not believe there to be enough benefit from sharing information, and access to information might not be useful to personnel in other systems."

That said, information silos may also exist when some managers choose to control the dissemination and flow of information, as well as access to the silo. This means that they have some sort of incentive to maintain the status quo, or they may not be able to justify a change given the costs that are associated with integrating the information systems.

As an example, consider the electronic management system that hospitals use to maintain medical records. While some hospitals within the same network may be able to exchange patient information with one another, out-of-network hospitals, doctors' offices and medical institutions may not be able to tap into this information. Therefore, they could be left in the dark regarding pre-existing medical conditions that, if they knew about, could be able to help them diagnose and better treat patients. But, simply, the medical record system is not designed to "talk" to other information systems that are not in the same network — and this is to help maintain patient confidentiality.

Information silos are causes when departments or organizational groups choose not to share information or allow the flow of information and knowledge through information systems with other departments or organizational groups. 

"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," according to Investopedia.

Information silos can hurt employees' mentality. This is all where the term silo mentality comes into play, as well. A silo mentality is simply a company's reluctance to share certain information with certain employees in different parts of the same company. Of course, a silo mentality can reduce efficiency and damage the company culture.

While information silos are typically intentionally created, there are some problems that can arise as a result of them. For example, departments or different organizational groups (or different doctors like the aforementioned example) may waste time duplicating efforts and doing redundant work. If information was shared between groups, they wouldn't necessarily have to do the work to figure out what was already done.

"Silos severely restrict the exchange of information because information flows up and down within the silo but isn’t shared with other departments," according to Small Business Chron. "If your research and development group selectively shares information with your marketing division, the marketing team will make decisions based on the limited information it has, which might not be accurate. For example, the marketing division might plan a major push for a current product because it is unaware that research and development plans to release a new version in nine months."

As such, information silos can cost companies time and, therefore, money.

Likewise, information silos can cause companies to end up creating contrasting systems on accident, which can be a waste of time, money and the other resources that it took to create these systems. In other words, if systems don't "talk" to each other, it's difficult to make sure that they all work seamlessly together under one roof. 

"A bottleneck in information results in inefficiency as different departments may be working with a series of alternate understandings for completion of a project," according to Investopedia. "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."

Ultimately, information silos can create divides in companies, as information isn't shared with everyone and it can become hard for there to be a consensus on different matters.

"This could lead to employee frustration and result in missed deadlines, misplaced priorities or an outright failure to achieve business goals," Investopedia reports. "When information is not readily available across the organization, it can result in faulty decision-making based on inaccurate or out-of-date data."

Here are four ways to break down information silos.

A shared vision for the company is important. It helps different teams all working toward their own individual team goals come together to work toward a common goal. This helps to shake up silo mentality in that people start keeping the same vision in mind.

Collaboration tools will help teams come together because they're forced to work together. Collaboration makes teams stronger, and they'll be able to share information that way, even if their individual information silos aren't transferable.

Train employees on the systems together so that they all know how to use each other's systems if necessary. They may still maintain their own information silos, but they'll have the knowledge and skills to be able to operate with other teams, as well. This way, if they have to tap into other systems to share information, they can.

Nothing beats face-to-face communication. Encourage employee interaction in the office through group activities like team-building exercises, office outtings and other events.

Information silos can help to keep confident information confident and keep systems from being cluttered with unnecessary data. But, on the other hand, they can also create divides in companies and networks, causing difficulties and possibly costing time and money.