One very practical illustration of the problems that can be created by data silos involves the lack of shared information among the nation's intelligence agencies in the years preceding September 11. I am hoping that this problem has been greatly reduced in the years since then.
Data silos make it harder for different parts of companies to access information that could be useful to them. This makes companies less efficient. The best thing for companies to do is to merge the systems used by their various departments. They should all use compatible systems so data can be accessed by everyone with a need.