The cost of data fragmentation

6th January 2014

As personal and corporate mobile devices proliferate and more and more on-premise systems are superseded or supplemented by cloud software and services the shadow cast by data fragmentation looms large, says Lesley Meall, FSN writer.




While many of the associated problems are the responsibility of the IT department, there are concerns for the finance department too. A recent study of mid-sized organisations across the US and the UK by research company Freeform Dynamics found that after security, the most conspicuous consequences of data fragmentation are elevated costs and operational overheads.  


“Most study participants say fragmentation translates directly to wasted storage capacity due to repeated over-provisioning, multiple copies of data driving up storage volumes and costs, and a significant amount of additional overhead to manage the complexity,” says Tony Lock, programme director at Freeform Dynamics. “The overwhelming majority of respondents recognise the danger of storage costs running out of control,” he adds, “and the need to educate business stakeholders on the value and risk aspects of better data management, as well as cost, comes through strongly.” 

How much of a problem all of this is varies depending on a number of factors. These include: the size and structure of an organisation; the policies and procedures it has in place to regulate the classification and storage of data and employee use of personal equipment and consumer-grade cloud storage; any existing information technology (IT) infrastructure and plans for its future; the volume of data the organisation is creating and storing and how quickly and easily this must be available to users inside and outside the organisation. 

“Users now expect all data to be available to them at all times, even though it may have been many months or even years since that data was last accessed,” observes Lock. But as corporate data becomes ever-more dispersed, the study found (30% of) IT managers struggling to manage data security and (80%) concerned that effective decision-making is being hampered by data availability and consistency issues. So the costs of data fragmentation are direct and indirect, which makes them difficult to quantify and to manage – though not impossible. 

Cloud solutions

Providers of cloud software and services are helping in various ways. “Our apps all share the same database, reporting tools, user interface and workflow,” says Kevin Roberts, vice president, business development, at So the finance software integrates with recent FinancialForce acquisitions Vana Workforce (human resources) and Less Software (supply chain management) as well as the customer relationship management (CRM) system

Defining workflow rules and transaction flows is all point and click on the Salesforce platform and FinancialForce also provides ClickLink. “It allows end users to create integrations with apps that are on the Salesforce platform, no coding required,” says Roberts. Not all software is written for use with “Off platform and multi-cloud integrations are more difficult and require technical knowledge,” he says, as does integration with on-premise applications. 

Fragmentation can be a challenge whether data is on premise or in the cloud. “Modern cloud apps have more sophisticated APIs and web interfaces, but you still need to connect systems that are physically disconnected,” says Roberts, who (unsurprisingly) suggests that it is far easier to stay on one cloud platform. He has a point, of course, but so do the many organisations that choose to mix and match software and service providers to create more ‘hybrid’ IT infrastructures.

Hybrid solutions

“The hybrid approach works well for many organisations,” says Richard Starr, professional services director, Advanced 365. Many customers of the managed services provider want a corporate IT infrastructure that combines the delivery mechanisms and access devices that best meet their needs. “They may want to keep their finance system on-premise but interface with it from mobile devices. They may see benefits in keeping their human resources system on-premise and putting their payroll system in the cloud,” he says. 

As Advanced 365 and its customers are not immune to the challenges of data fragmentation, it has developed tools to manage this. “There are good interfaces across our product portfolio and we can also connect our systems with legacy systems and other providers’ software,” says Starr. It also supports business units and IT departments by designing, developing and optimising data warehousing and business intelligence solutions that consolidate data from various systems. 

On-demand solutions

It is also getting easier for businesses with and without IT departments to manage integration and minimise fragmentation by using specialist tools to combine multiple cloud products with each other and with on-premise software. Product agnostic point and click tools from the likes of Adeptia, Dell Boomi and Scribe enable non-technical users to connect different sources of data and enable IT workers to define, deploy, synchronise and govern integration and master data management processes.

So although the proliferation of cloud-based software and services and mobile devices is creating more and more islands of corporate data at more and more locations, technology can also make the associated integration issues easier to manage. But CFOs and others in the finance function will need to carefully consider the risks and operational overheads of the various approaches, if they are to minimise costs and the size of the shadow that is cast by data fragmentation.