07

Aug

The Cost of Information Silos

In the military and other sensitive environments, “need to know” is an established security principle, denoting that the fewer people to be aware of something, the less likely it will be discovered by someone who should really not know.

Unfortunately, many organisations have a legacy environment that echoes this with silos of information restricted to a particular team or department. In most cases, there is no sound business reason for this and it is more akin to school days when you would wrap your arm around your work to stop friends from pinching your ideas.

The reality is that the sharing of ideas is where innovation comes from and what every organisation should be encouraging.

To illustrate the cost of not sharing, let us consider an example. An organisation has 5 million files that have been generated over the last 20 years, stored in a variety of file shares, most of which are restricted by department. Sound familiar? These documents encompass 20 years of intellectual property, representing significant value to the organisation.

For the purposes of my example, I am going to assume a value of $0.01 per document to each person with access. You could rightly argue that some documents have no value to certain people, but that different documents have more and vice versa, so let us accept this minimal figure as an average.

The organisation has 2000 staff who are split into four departments. 

To calculate the potential value of the intellectual property, we multiply the total number of documents by the total number of staff by the average document value:

5,000,000 x 2,000 x $0.01 = $100,000,000

Okay so far, but let us now calculate the reality.

Again, here are some generalisations just for the sake of our example. The 4 departments have 25% of the staff in each and the number of documents are split equally between the departments, with another equal share generically accessible to everyone: 20% restricted to each department and 20% centrally.

So now our calculation is rather different.

Centrally shared we have 20% of our documents which are available to everyone:

5,000,000 x 20% x 2,000 x $0.01 = $20,000,000

Each department has 20% of our documents which are only available to 25% of our staff:

5,000,000 x 20% x 2,000 x 25% x $0.01 = $5,000,000

With 4 departments this results in a Realised IP Value of:

$20,000,000 + 4 x $5,000,000 = $40,000,000

This means we are only realising 40% of our potential value.

This figure gets increasingly worse when there are more departments, with 10 departments realising less than 20% of the potential value.

Realised Intellectual Property Value

So, how much intellectual property value are you missing out on?

Try it for yourself with our  "Realised IP Calculator"

Posted by: Dave Paylor, Team Leader, Portals & Productivity Solutions Office365 | 07 August 2015

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