Data silos in ERP systems: Integration as a solution

In today's data-driven business world, information is the life elixir of each company.

Enterprise Resource Planning (ERP) systems play a central role in pooling and managing a variety of business processes.

But what happens when these valuable data are caught in isolated "Silos"?

In this paper, we highlight the problem of data silos in ERP systems and show how their dissolution by targeted integration not only increases efficiency.

However, also paves the way for sound decisions and sustainable growth.

The silent problem: What are data silos?

In today's data-driven business world, information is the life elixir of each company.

For Data silos in ERP systems: Integration as a solution, API & Integration Projects, Cost Calculator: API Development, Solution: Integration Chaos sowie RPA vs. API Integration help you align rollout, scope and budget before you commit.

Imagine each department in your company works with its own isolated record.

The sales department has its own customer data, accounting its own financial data and production its own inventory data.

These separate data islands are referred to as data silos.

They often arise organically when companies grow and introduce new expert software solutions for different departments without paying attention to continuous integration.

The result is a fragmented data landscape that makes a holistic view of the company impossible.

The serious disadvantages of data silos

How does data silos arise?

Short: Data silos are rarely the result of a conscious decision.

Data silos are rarely the result of a conscious decision. Rather, they develop slimy and for different reasons:

• Company growth and acquisitions: If companies grow quickly or take over other companies, they often bring their own IT systems. Rapid integration of these heterogeneous landscapes is often neglected in favour of rapid operational integration.
• Department-specific island solutions: Custom departments create their own software tools to improve their specific tasks (e.g. a CRM in sales, a project management software in marketing), without taking into account the company-wide data strategy.
• Fehlende IT-Governance: Without clear guidelines and a central authority that controls the acquisition and integration of software, uncontrolled wildlife is created in applications.
• Technical barriers: Old legacy systems often do not have modern interfaces (APIs), making connection to other systems more difficult and expensive.

The existence of data silos can have far-reaching negative effects for a company. The main disadvantages can be summarized as follows:

• Inefficient processes: Employees spend valuable time compiling and comparing data from different systems manually. This leads to double work, increased susceptibility to errors and ultimately to slowed down business processes.
• Suggested decision bases:

References and further reading

The following separate references complement the topics in this article:

• Bitkom – German digital industry association.
• German Federal Office for Information Security (BSI).
• European Commission – Digital strategy.
• MDN Web Docs (Mozilla)
• W3C – World Wide Web Consortium.

> "ERP programmes rarely fail on software selection; they fail on unclear process ownership."

— Björn Groenewold, Managing Director, Groenewold IT Solutions

Frequently Asked Questions (FAQ)

What is this article about: “Data silos in ERP systems: Integration as a solution”?

This post explores Data silos in ERP systems. Integration as a solution from the perspective of needs, typical pitfalls, and sensible next steps.

In short: In today's data-driven business world, information is the life elixir of each company. Enterprise Resource Planning (ERP) systems play a central role in...

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Useful for project leads and product owners in Software development who must choose between standard software, custom development, and integration.

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Technically and organizationally, alignment with experienced partners pays off — from requirements to operations; start with the [services overview](/en/services/software-development). For multi-system landscapes, [IT consulting and architecture](/en/services/it-consulting) helps align vendors and internal teams.

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