Saturday, February 6, 2016

3.1 Freedom for all data: fight the silos

The existence of data silos is very expensive and it prevents companies from doing digital business. So why are they there? Mainly for two reasons: 1. a technical and 2. an organizational one.

1. Technical reason

As described in the section “2. Challenge” we faced a lot of technical restrictions in the beginning of the client-server era. As soon as the data volume reached a certain extent and we wanted to do different things with it at the same time, we had to split it into several databases simply due to performance considerations. From a technical perspective this is basically the one and only reason to have more than one database. All other arguments are due to:

2. Organizational reasons

Most businesses today are organized in hierarchically structured boxes. You all know the picture below.

This is one of the easiest charts to read: when you own such a box, you have resources assigned (people, money, information, etc.) which you can normally freely dispose. The control over resources in an organization gives you power over colleagues who have less or no resources. The fewer boxes are above yours, the more power you have. That is how many organizations still work today.

To all of these boxes there are usually dedicated and hopefully unique functions within the company assigned. If you were asked why you own this box and why its existence is absolutely crucial for the company’s prosperous survival, your answer will be: “Because I am doing an important job that nobody else in this company can do.” To do your job right you need information (=data) and most probably some software. In order to defend your position you will make sure that nobody else gets the data that you have. And the nice thing about client-server 30 years ago was, that IT became so cheap, that everybody could have his or her own server with his or her own, private information.

Do not get me wrong: my intention is not to blame anyone for the situation they are in. You are all doing great jobs! What I want to say is that surviving or even growing in the era of digital business is above all a matter of governance which has to be driven top-down from top management. Technology is not an issue anymore which I will prove in the next chapter.

By the way: there are client-server systems existent where a lot of organizational units work with different parts of one highly integrated application on a very limited number of separated databases. These systems are for example called “SAP Business Suite” – which is a nice coincidence to which we will come back later.

To summarize my thoughts: becoming a digital enterprise is about the free flow of data within a company. To get there you need to shut down the hundreds of data silos you have today. Shutting down data silos needs to be accompanied with an organizational change project.

Now let’s have a look how technology can support us here.

No comments:

Post a Comment