According to IDC Market Research, companies lose 20% – 30% of their revenue annually due to inefficiencies caused by data silos. For a mid-sized business with $10 million in revenue, that’s $2 to $3 million slipping away every year.
Many chief financial officers (CFOs) may not realize the cost of siloed data is bigger than immediate revenue loss. Data silos can quietly undermine your team's productivity, customer experience and strategic decision-making in ways that compound over time. Fortunately, companies that overcome data silos with the right platform, like Sage Intacct, aren't just saving money; they're gaining a competitive edge.
Example: The Cost of Siloed Data in Action
Your sales representative just closed a $50,000 deal, but the fulfillment team is in the dark about the custom specs buried in the customer relationship management (CRM) system. Meanwhile, finance is stuck manually re-entering order data from the enterprise resource planning (ERP) system into spreadsheets because they can’t see real-time payment history from sales.
Herein lies the expensive cost of data silos — those invisible barriers that keep your systems from talking to each other.
Understanding the Cause of Data Silos
A data silo occurs when information in a department is not easily accessible to other departments, leading to isolated knowledge across a company. Data silos result in repetitive or inconsistent data, which can hinder productivity, increase costs and reduce effective decision-making.
Common causes of data silos include:
- Enterprise resource planning (ERP) systems that fail to integrate with customer resource management (CRM) systems
- Rapid growth and acquisitions without the support of proper infrastructure
- A lack of collaboration between employees who manage certain applications and outside teams
- Restrictive access to software
- Decentralized IT and various departments purchasing their own technology solutions
The Cost of Data Silos: Diminished Productivity and Missed Revenue
DATAVERSITY's 2024 Trends in Data Management survey found that 68% of organizations cite data silos as their top concern, up 7% from the previous year. But the problem isn't just growing; it's getting more expensive, too.
Poor data quality costs organizations at least $12.9 million a year on average, reports Gartner research. Not only are organizations losing money, but data silos are causing employees to lose a large percentage of their time chasing data throughout the week.
Think about your own team. How often does someone ask, "Where did you get that number?" or "Can you send me that customer's purchase history?"
These seemingly innocent questions represent significant productivity drains that many organizations never quantify. When your sales team spends Tuesday morning recreating a customer analysis that finance ran last week, but stored in their system, you're literally paying twice for the same insight.
The hidden costs of data silos go deeper than time wasted. When your CRM shows a customer as "highly engaged" while your ERP shows they're 60 days past due, you miss coordination and set up strategic missteps that can damage relationships and miss revenue opportunities. These disconnected systems often signal the need for comprehensive business process optimization to align technology with operational workflows.
3 Hidden Efficiency Drains You're Probably Missing
3 Hidden Efficiency Drains You're Probably Missing
When customer data lives in both your CRM and ERP without synchronization, teams unknowingly work with different versions of the truth. Sales updates the contact information in the CRM, but billing still uses the old address from the ERP. Version conflicts don't just cause delivery delays; they erode customer trust when your company appears disorganized.
Multiple departments end up analyzing the same customer scenarios independently because they can't access each other's insights. Marketing runs a customer profitability analysis using CRM data while finance runs the same analysis using ERP data — and reaches different conclusions.
When this happens, you're not just paying for redundant work; you're making strategic decisions based on incomplete pictures. The hidden cost is evident when conflicting departmental strategies often cancel each other out, creating zero-sum internal competition instead of aligned growth.
When systems don't integrate, institutional knowledge becomes trapped with individual employees who become the "go-to" person for bridging data gaps. Your business becomes dependent on human translators instead of systematic processes. These key employees become overloaded, burn out faster, and when they leave, they take irreplaceable knowledge with them.
Why Rethinking Organizational Design is Vital
Most business leaders assume data silos happen because of poor technology choices. The truth is more nuanced and, unfortunately, more expensive to fix. Salesforce's 2024 Connectivity Benchmark Report found that 72% of information technology (IT) leaders describe their current infrastructure as "overly interdependent," while paradoxically, 80% report that data silos are hindering their digital transformation efforts.
However, organizational design is the real culprit behind the disconnect. Your CRM was purchased by sales to solve sales problems, while your ERP was chosen by operations to handle operational workflows. Each system excels at its primary function, but they were never designed to share a conversation. It's like hiring two brilliant specialists who speak different languages and expecting them to collaborate seamlessly.
The problem compounds when departments optimize their individual systems without considering enterprise-wide implications. Sales configures the CRM to track lead sources and deal stages. Finance sets up the ERP to monitor cash flow and approval workflows. The marketing team builds their automation around campaign performance. Each optimization makes sense in isolation but creates deeper integration challenges.
The Solution to Data Silos: Using the Right Platform for CRM-ERG Integration
Organizations that successfully tackle data silos choose specialized tools that excel at their core functions and integrate seamlessly. Your CRM should remain a powerful sales engine, while your ERP should optimize operations. And your financial management platform should be the bridge that keeps everything in sync.
That’s where Sage Intacct stands out. Built as a cloud-native financial management solution, it’s designed with open APIs that make integration not just possible, but effortless. Whether you’re connecting to ADP or other best-of-breed applications, Sage Intacct ensures your systems talk to each other without friction.
Sage Intacct allows you to:
- Start with simple connectors and scale to advanced workflow automation
- Centralize financial data across entities, currencies and locations
- Automate tasks like invoicing, procurement and month-end close
- Visualize performance with real-time dashboards and key performance indicators (KPIs)
Your Next Move
Cherry Bekaert's professionals have helped hundreds of organizations bridge the gap between CRM and ERP systems. We understand that every business has unique workflows, and we know how to create integrations that work with your processes.
We will work with you to identify your most critical visibility gaps and determine where better financial information would have the most significant impact on your business. Contact us to get started on your transformational journey.
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