Data has become the center of all business activities. It has been this way for several years now, but data will become even more integral to businesses in the future.
Companies rely on data insights garnered from customer interactions and marketing campaigns. They also use operational data from within their business processes to make decisions that benefit the business.
However, the foundation of data power can be extremely fragile, especially regarding data fragmentation. Data fragmentation spreads data across different systems and applications. When data is scattered like this, its value becomes inhibited, bringing several risks to a business.
Table of Contents
What Does Data Fragmentation Mean?
In plain terms, data fragmentation is the process of dividing an organization’s data into multiple locations. When data fragmentation is apparent, this data appears in inconsistent formats, and not all data groups are accurate.
Data fragmentation often happens when different departments work on their own data sets. Data can also become scattered after a business merger or acquisition. Another cause of data fragmentation is the rapid growth of cloud-based software solutions in businesses.
In essence, data fragmentation causes silos. While each silo may be efficient by itself, the data presents an incomplete picture. This is the biggest reason why data should be centralized.
Data Fragmentation Comes with Several Risks
Data fragmentation impacts several processes, including business performance and security. The following are just a few of the risks associated with scattered data:
Weak Decision Making
With fragmented data, getting an overall view of a business’s state is challenging. Insights gained from fragmented data may also be obscured. This results in weak decision-making, which could spell trouble for a business.
For instance, the marketing team may target the incorrect audience because they have incorrect data on buyer history. And the data they have may differ from that used by the sales team.
So, essentially, the marketing material and products on offer will not be the same. This breakdown will lead to unhappy customers and an unnecessary scramble to fix things within the business.
Wasted Resources
Scattered data often also means duplicate data. This leads to wasted storage space to store the same data in multiple places. Fragmented data means inconsistency, so extra resources are needed to reconcile information. The time and effort spent on this could be better allocated towards other business processes.
Decreased Business Adaptability
Businesses must be able to adapt and respond quickly to changing consumer trends. Data fragmentation makes this difficult because the valuable data required to adapt is not stored in a centralized location.
Security Risks
Moreover, fragmented data is a security risk. When data is scattered across systems and databases, it is challenging to enforce security protocols. The lack of a centralized database means vulnerabilities that cybercriminals can exploit. This could lead to data breaches and theft.
Mitigating the Risk of Data Fragmentation
Businesses need to avoid data fragmentation by implementing clear data governance policies. They should use data integration tools as well to prevent data siloes. Data warehousing is another good option for storing historical data. Moreover, there should be a data champion to drive these strategies.
Good data governance will make consolidated data possible, helping businesses make better decisions and grow over time while staying ahead of the competition.
