An organization’s data exists in multiple places, including cybersecurity tools, financial systems, operational dashboards and compliance software. If you don’t unify the information in a single platform, your data remains scattered or fragmented across tools.
Unfortunately, the effects of fragmented data rarely show up in the analytics dashboards where you can measure and fix them. Yet they can significantly disrupt daily operations.
Understanding how to spot the hidden impacts of fragmented data and what you can do to avoid them is key to making your risk management strategy more effective. Learn how in this guide.
Table of Contents
What Causes Data Fragmentation?
Fragmented data in any business often comes from a combination of technological and organizational factors. Together, they influence how information flows (or fails to flow) across the organization.
Multiple Disconnected Systems
According to Salesforce’s research, large organizations use more than 1,000 apps on average. However, nearly 70% of those tools are disconnected from each other, meaning they aren’t communicating and sharing data.
If your cross-functional teams use systems that don’t talk to each other, your data ends up scattered across different tools. For example, data security risks end up in a cybersecurity tool, while vendor-related threats appear separately in third-party risk management software. Storing data in multiple disconnected platforms causes fragmentation across products and services.
Organizational Silos Between Teams
Without a standard enterprise-wide process for quantifying and scoring risk, each department that handles data may come up with its own assessment methods and information management requirements that fit its specific workflows.
When every team operates in isolation, consolidating related insights and easily accessing them becomes difficult. The resulting departmental silos fragment the organization’s overall risk view and obscure the human decisions behind ownership and accountability.
Legacy Systems
Outdated tools often can’t integrate with modern systems, or even other legacy software, due to design incompatibility. As a result, they can’t share information with the rest of your business tech stack, so data ends up isolated in separate places.
6 Hidden Impacts of Fragmented Risk Data in Organizations
Fragmented data slows teams down and weakens the organization’s ability to respond confidently and decisively to emerging threats. It increases teams’ workloads, limits insight visibility and makes it difficult for departments to work together. Here’s exactly how that hurts daily business operations.
1. Introduces Manual, Time-Consuming Data Reconciliation
When different data lives in separate systems, risk assessment teams must manually retrieve it from the various sources. They then need to compare and verify different release versions to ensure accuracy, consistency and completeness before compiling a final draft with a full picture of the organization’s exposure.
This is work they wouldn’t need to do with the right tools. An AI-powered, integrated risk management system like Onspring automates many manual tasks.
Manually gathering data from different systems is also a huge time-waster. According to a report by Forrester and Airtable, workers can lose 2.4 hours daily looking for data trapped in silos. That’s 12 hours in a five-day workweek that your team could be spending on more impactful work, such as assessing exposure levels.
2. Creates Blind Spots in Risk Management
In organizations with departmental silos, teams often end up assessing and managing threats using only the data available in their own systems. Without visibility into related risks tracked by other teams, departmental leaders may base their risk management strategies on incomplete information.
The limited view can also prevent executives from seeing how threats interact across business functions. Such blind spots can result in interconnected issues across the organization going unnoticed. For executive leadership, this lack of visibility undermines confidence in business reporting and strategic planning.
Threats that silently escalate within an organization due to disconnected systems can cause compliance and governance gaps. For example, if IT identifies a data security issue in a vendor’s software but that information never reaches the compliance team and executives on time, the organization can miss regulatory reporting deadlines. It may also lose the chance to update security controls to avoid data breaches.
3. Makes Collaboration Across Teams More Challenging
Fragmented data hurts cross-functional collaboration. Without a single source of truth, teams struggle to maintain a shared understanding of what issues they’re managing and what actions they need to take.
Research shows that when cross-functional collaboration becomes difficult because of disconnected and inefficient processes:
- Productivity drops by 24%.
- Employee morale and engagement fall as it becomes harder to find the information they need to do their job effectively.
- Revenue decreases.
To work well together, departments need a centralized platform to store information and team up on projects.
4. Slows Down Decisions
When fragmented data forces teams to spend extra time gathering and reconciling information from multiple sources, it delays business decisions. Some threats can quickly change in severity or form. If it takes too long to obtain insights from fragmented data analysis, the organization may respond too late or base decisions on outdated information.
5. Leads to Inconsistent Risk Assessments and Duplicate Efforts
Fragmented systems can make different teams evaluate the same issues differently, each using its own assessment methods or scoring systems. In such cases, every department may end up with its own unique version of the truth about an exposure.
For senior decision makers, that’s bad news because they won’t have a clear, unified picture of the organization’s exposure. What one team flags as a critical concern, another might consider minor. Such inconsistent assessments are unreliable when making high-impact decisions.
Additionally, fragmented systems can lead to duplicate effort. Without a unified view, a team may assume it’s the only one addressing a particular issue. In reality, another department may have already assessed and scored the issue using the organization’s standard procedure. Repeating the process duplicates effort unnecessarily.
6. Makes It Harder to Stay Audit-Ready
To show compliance and promote accountability during audits, your organization may need to track how a particular issue changed over time, who owns it and what actions were taken to manage it. If this data is scattered across multiple platforms or spreadsheets, you can’t readily pull it up when audits roll around.
Moving Toward a More Connected Risk Management Environment
The consequences of using fragmented data in your organization are too significant to ignore. The following best practices can help you avoid them:
- Reduce manual work: Automate and integrate your systems to get rid of time-consuming data reconciliation and speed up decision-making. You can use pre-built integrations or custom APIs. If you’re still on legacy systems, consider moving to modern alternatives designed to connect to other tools while overcoming data migration risks.
- Break down silos between risk departments: Create a standard risk assessment process, so each team follows the same cross-functional workflows and shares their data with other related departments.
- Create shared visibility across teams: Set up a centralized data risk management platform that gives departments and senior leaders a clear, unified view of risks in real time.
When choosing a risk management system to unify fragmented data, make sure it meets all your usability and flexibility requirements while protecting against data privacy risks. If you’re not sure what features you need, learn how to choose the right platform before buying.
Unified Risk Management That Improves Collaboration and Enables Faster, More Confident Decisions
An enterprise risk management (ERM) platform like Onspring eliminates the fragmentation problem. You can collect all your information in one place, whether it’s credit, cyber, reputational, third-party or operational risk data. The modern ERM tool also reduces manual tasks by automating workflows that trigger assessments and inform risk owners when their risk profiles change.
To explore a platform that unifies your risk data, request a demo to see Onspring in action. And get help evaluating your centralized risk data and transforming it into actionable insight by downloading our Quantifying and Scoring Risk for Clearer Decision-Making ebook.
