Fragmented data is a very common business problem resulting from an unorganized information system filled with data scattered across various storage locations and applications. Failure to manage this situation creates confusion, delayed business decisions, and many security concerns. Leaders can address this problem by learning to centralize data and implementing stricter access and management policies.
Yahoo Finance reported that 34% of business respondents in a HubSpot survey cited fragmented customer data as the very reason for revenue decline. Additionally, only 9% of respondents trusted that their company's data was accurate enough for reliable reporting. If companies can't trust their own data, how can customers and B2B clients do so?
What Are Examples of Data Fragmentation?
A common example of fragmented data or informational silos is when different departments use the same information (just in different ways) but don't share it.
For example, a marketing team may use Mailchimp for customer contact information while the sales team tracks the same info in Salesforce CRM. These are two different systems that do not sync; therefore, one team may not have the most updated insights about the same customer.
The same thing happened between the finance and human resources departments. One employee's payroll is managed in an accounting system, while HR may have their salary and benefits data stored on their own human resources application. Discrepancies can easily arise when both teams use manual data entry, and it may take a long time to bridge their updates.
Why Is Fragmented Data Common?
Some companies don't have a modern central data management system in place, as there are still legacy systems alongside new cloud-based apps. A small company may scale into a large corporation while still using disconnected systems.
Many departments have their own applications and tools, where people are continuously harvesting the same data in different locations. Teams purchase independent software platforms that don't have easy ways to communicate with other programs. It makes it harder and more time-consuming to make updates.
Additionally, there may be multiple out-of-sync versions of the same information when teams make copies for reporting and analytics.
Without a consistent central governing policy, different departments and workers may define, store, and format information differently, creating a lot of redundancies in different forms.
How Does It Affect Business Decision Making?
The impact of data fragmentation shows when stakeholders and managers resort to guesswork, thanks to the many blind spots in the b2b data scattered in different parts of the supply chain. Manual data compiling and reconciling across different tools soak up critical time that could be used more creatively.
Companies may have contradictory reporting of the same information since different departments use different metrics.
Those using artificial intelligence are also in a tough spot as they're feeding it inaccurate data without proper context. Regardless of how fast AI may be, it will only produce incorrect outputs when it's being fed wrong or outdated data.
What Are Some Fragmented Data Solutions?
Start solving data fragmentation issues by removing data silos and making information accessible through centralized repositories and integration platforms.
Some options include:
- Snowflake
- Google BigQuery
- MuleSoft
- Workato
In addition to storing the information in one accessible spot, you also need responsible ways of managing it.
Data governance frameworks help establish organizational rules and access controls for better security. These rules help prevent new information silos from forming within the platforms again.
Benefits of Resolution
As you better organize customer data, you can create rich, real-time profiles to better understand your market. This could enhance the personalization your brand offers during every interaction, which goes a long way to building customer loyalty and meeting their expectations.
It'll be easier for your company to stay in compliance with simplified privacy controls that have straightforward data security.
Save on business overhead as you'll have fewer storage and computing redundancies. Then you'll be able to cut down on application licensing fees and reduce the risk of compliance fines.
Frequently Asked Questions
What Are the 4 Types of DBMS?
A database management system (DBMS) is a software tool used for organizing, managing, and storing data.
There are four main types, which include:
- Relational
- Object-orientated
- Hierarchal
- Network
Your Relational DBMS organizes data into tables with rows and columns. Common keys establish data relationships and high accuracy.
An Object-oriented DBMS stores your data as objects, including attributes and behaviors. It is best for programming languages like Java or Python to manage complex data modeling in real-time simulations.
A Hierarchical DBMS uses a strict tree-like structure to organize data. In this case, your data flows in one-to-many relationships, where each data parent can have multiple children, but each data child only has one parent.
One example is an organizational chart or a traditional filing system.
Similar to the Hierarchical system, a Network DBMS has more flexibility due to many-to-many relationships. In other words, a child record can have multiple parent data connections. You'll mostly see this example in older legacy systems.
Is 0% Fragmented Good?
If your company has achieved 0% fragmentation, that is a very good thing. This means your files are stored in one place on your drive and aren't broken across different areas. It puts less stress on your system as it can read and load data much faster now.
The type of drive that you have on your system also affects 0% fragmentation capability. It's normal for a Solid-State Drive (SSD) to be at 0% fragmentation because there are no moving parts, and scattered data doesn't slow it down.
Prevent Scattered Business Data for Easier Communication
The last thing a modern business should ignore is fragmented data. With data scattered across different systems and departments, you may have loads of redundancies and inaccuracies affecting your bottom line.
As different departments share the same information, companies can make it easier by integrating a centralized platform and strict data management procedures. You'll save time and money while building customer trust with accurate personalized products that will keep them coming back.
If you want to learn more about business, check out our other related articles on our website.
This article was prepared by an independent contributor and helps us continue to deliver quality news and information.
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