www.informationweek.com
Lisa Morgan, Freelance WriterMarch 27, 20258 Min ReadNils Ackermann via Alamy StockData silos have been plaguing organizations since before the data analytics gold rush. Sadly, data silos remain an issue in many organizations, which calls into question the reliability of AI outputs.Data silos are making it much harder for agents to get unified insights based on a holistic view of the data about an object of interest, such as a customer or an employee, or just a single user, says Michael Berthold, CEO and co-founder of data analytics platform provider KNIME. For example, agents struggle with isolated data sources, [like] a human having to go to the CRM to see information about a company and the current contract history, then go to the support system to find out more about ongoing technical issues, and then also check the online forum to see if employees of the customer posted something there.According to a recent Gartner survey, 63% of organizations either do not have or are unsure if they have the rightdatamanagement practices for AI. In fact, Gartner predicts that through 2026, organizations will abandon 60% of AI projects unsupported byAI-ready data.How Data Silos Form and What to Do About ThemTool vendors are trying to make the flow of data between systems easier by providing integrations with other tools. Similarly, an agent will benefit from having one place to go to get information about a customer.Related:Michael Berthold, KNIMEMichael Berthold, KNIMEIn an ideal world, all data would be integrated. That was the promise of data warehouses years ago, and its still what is being promised. Especially companies with more legacy data and systems will continue to have data silos, says Berthold.AI models require high-quality data to deliver optimal performance. Poor data leads to underperforming models, which can cost organizations tens of millions of dollars or more, according to Gordon Robinson, senior director, data management R&D at data and AI solution provider SAS.Inconsistent data across silos means different parts of an organization may track similar data independently, leading to discrepancies and the lack of a single source of truth, says Robinson. Data silos also can lead to incomplete AI model training. When AI models are trained on fragmented data rather than a comprehensive dataset, they fail to reach their full potential and deliver optimal insights.Josh Weinick, a sales engineer at AI-powered cybersecurity automation platform Blink Ops has seen cases in which a chatbot is unable to provide accurate customer support because it doesnt have access to sales or product data living in another departments separate system.Related:Most silos are caused by a mix of legacy infrastructure, organizational culture and inconsistent data standards. When teams cling to their own systems and definitions, or when older technology doesnt integrate well with modern AI platforms, its easy for silos to form, says Weinick. Mergers and acquisitions can also play a role. Newly acquired business units often bring their own tech stacks, which stay isolated unless leadership prioritizes integration.Without leadership buy-in and a culture of data sharing, departments tend to guard their data.Ashwin Rajeeva, co-founder and CTO at enterprise data observability company Acceldata says data silos restrict AIs access to complete, high-quality data, which leads to biased models, inconsistent insights and unreliable automation.Fragmented datasets make it difficult for AI agents to understand context, reducing their effectiveness in decision-making and business impact, says Rajeeva. Eliminating silos is essential for AI to scale, improve efficiency and deliver meaningful enterprise value.The root causes of the data access problem are legacy infrastructure, multi-cloud environments, decentralized data ownership and weak governance.Related:A data-first AI strategy focused on governance, interoperability, and observability is key. Enterprises should implement automated data quality checks, real-time monitoring and lineage tracking to ensure AI models operate on accurate, consistent data. Aligning data strategy with business objectives and fostering cross-functional collaboration accelerates AI adoption and impact, says Rajeeva.Gokul Naidu, senior manager at SAP says silos can cause gaps in model training and may require manual consolidation or cross-team requests.By the time information is merged, it may already become outdated, slowing the feedback loop for AI driven optimizations and reducing potential ROI, says Naidu. When I wear a FinOps hat I see that silos obscure the value of unit economics, such as cost per transaction, cost per user, and limit the ability to measure how each service or feature contributes to overall business value.In his view, cultural resistance to sharing, a lack of standards and governance, legacy apps and technical debt contribute to data fragmentation, making it difficult to establish a unified data strategy. To overcome them, he suggests doing the opposite, which is promoting a culture of sharing, having a unified data strategy, and using automation and observability.Paul Graeve, CEO at IT system data services provider The Data Group points to SaaS systems. Specifically, organizations are not investing the time, energy, and money necessary to load SaaS data into a data warehouse where the organization can own the data, clean it, and effectively use the data for any important business initiative.Your data is locked away in all these SaaS platforms scattered around the globe. This can be scary considering your data is your most valuable asset, says Graeve. The only way you can effectively and efficiently use your data for AI, analytics, portals -- for any initiative -- is to consolidate all your data into a one-version-of-the-truth data warehouse. Until you have your data in one place where you can see it, fix it, enrich it and efficiently use it, youre going to struggle successfully implementing any AI initiative.Paul Graeve, The Data GroupPaul Graeve, The Data GroupArmando Franco, director of business modernization services at TEKsystems Global Services, says data silos limit access to comprehensive training data, reducing model accuracy, and introducing inconsistencies due to conflicting governance and duplication. They also create inefficiencies in automation and decision-making, as AI agents require real-time access to unified data. Additionally, fragmented data poses security and compliance risks, potentially leading to regulatory violations if governance is not properly enforced.These challenges stem from outdated IT infrastructure, business unit fragmentation, and a lack of a unified data strategy, says Franco. Legacy systems were not designed for interoperability, while different departments using specialized tools create barriers to integration. Without centralized governance, enterprises struggle with inconsistent data management, and siloed AI initiatives lead to duplicated efforts and conflicting model outputs. Addressing these issues requires modernizing IT systems, fostering cross-team collaboration, and implementing a cohesive data strategy.Why Some Enterprises Struggle More Than OthersThe longer an organization exists, the more likely it is to be struggling with data silos.If a company has been around for a while, it will have different tools and systems, and the act of unifying it all is doomed from the start. Even worse, if that company bought a couple of other companies in recent years that brought along their own tools and data solutions, says KNIMEs Berthold. Dont dream of waiting for the famous data warehouse to solve everything. Dont try to put a bandage on the problem by starting to copy around data so it all creates a data swamp in one central location.Instead, its important to have a data integration, aggregation and analytics layer in place that allows everybody and AI agents to access a unified view. Berthold says organizations should ensure the technology in that layer is well-documented so future colleagues can understand its functionality and update it as data moves or new data sources are added.According to SAS Robinson, data silos within organizations often form around products or business functions, so many organizations still struggle to unlock the full potential of their data.The best way to overcome these challenges is by implementing a strong data governance framework within your organization. With increasing regulatory demands and the rising frequency and cost of data breaches, robust data governance is no longer a choice -- its a necessity, says Robinson. A successful data governance program starts with understanding what data you have, assessing its quality and tracking how it is used across the organization.Additionally, techniques like entity resolution can help create a single, unified view of data by integrating information from disparate silos into a centralized repository. However, many organizations have yet to invest in strong data governance. Meanwhile, AI governance is emerging as a crucial focus, especially as new AI regulations continue to evolve.Effective AI governance must be built on a solid foundation of robust data governance, says Robinson. If you havent invested in data governance or your current platform lacks robustness, this should be your top priority. Its no longer optional. Its a fundamental necessity for any data-driven organization today.In addition to that, Blink Ops Weinick says organizations should prepared to invest in modern data integration and metadata management and put strong security and governance frameworks in place from the start, so fears around compliance or breaches dont create massive delays.Most importantly, focus on cultivating a cross-functional mindset, says Weinick. Demonstrate quick wins by bringing together two siloed data sets to address a pressing business problem, then celebrate and scale those successes across the enterprise.About the AuthorLisa MorganFreelance WriterLisa Morgan is a freelance writer who covers business and IT strategy and emergingtechnology for InformationWeek. She has contributed articles, reports, and other types of content to many technology, business, and mainstream publications and sites including tech pubs, The Washington Post and The Economist Intelligence Unit. Frequent areas of coverage include AI, analytics, cloud, cybersecurity, mobility, software development, and emerging cultural issues affecting the C-suite.See more from Lisa MorganReportsMore ReportsNever Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.SIGN-UPYou May Also Like