Organisations have access to more data than ever before, covering processes, staff, clients, competitors, costs and more. From cloud platforms and collaboration tools to AI systems and analytics dashboards, information is constantly being created, shared and stored.

While data is good news for decision-making, it only works when handled correctly. Otherwise, as more and more data is collected, it can cause chaos.

This is a concept known as data sprawl: the uncontrolled spread of data across disconnected systems, departments, and formats. And it can bring many problems, including increased security risks, compliance headaches, operational inefficiencies and rising costs.

In this blog, we’ll explore the root causes of data sprawl, its hidden costs and how to avoid it.

Understanding the roots of data sprawl

Data sprawl doesn’t happen overnight. It’s often the result of cumulative decisions, rapid innovation and a lack of coordinated oversight. Here’s a closer look at the key drivers:

1. Rapid cloud adoption

The shift to cloud services has revolutionised how businesses operate, offering scalability, flexibility and cost-efficiency. However, when cloud platforms are adopted in silos, without a unified governance framework behind it, data becomes fragmented.

Different teams may use different tools, each with its own storage, access controls and data formats. This decentralisation makes it difficult to maintain visibility, enforce policies or ensure consistency across the organisation.

2. Shadow IT

Employees and departments often turn to unapproved apps or platforms to solve immediate problems, especially when official tools feel too slow or restrictive. While this can boost short-term productivity, it creates long-term risks.

Data stored in these shadow systems is typically outside the purview of IT and security teams, making it vulnerable to breaches, loss or non-compliance with regulations like GDPR. And often, there’s a reason why they’re not approved – such as known security risks.

3. Unstructured data explosion

Structured data (like databases and spreadsheets) is relatively easy to manage. But unstructured data (like emails, documents, images, videos and chat logs) tend to make up the vast majority of enterprise data.

This type of information is often scattered across file shares, collaboration platforms and personal devices, with little metadata or classification. Without proper tools to catalogue and govern it, unstructured data becomes a major source of sprawl.

4. AI and analytics rush

Organisations are often eager to leverage AI and advanced analytics to gain insights and competitive advantage. But in the rush to innovate, data is often pulled from multiple sources without standardisation or oversight. This leads to duplication, inconsistent formats and questionable data quality.

Worse, AI models trained on fragmented or biased data can produce unreliable or even harmful outcomes. This is why data groundwork is key to any successful AI initiative.

5. Post-pandemic digital transformation

The pandemic accelerated digital transformation across industries, forcing rapid adoption of remote work tools, cloud platforms and automation.

While this enabled continuity, many decisions were made reactively. Systems were deployed quickly, often without long-term planning for data integration, governance or scalability.

The result is a patchwork of disconnected platforms and data silos that persist even as organisations return to more strategic operations.

The dangers of data sprawl

While data sprawl may seem like a technical inconvenience, its impact runs deep. Here’s how it can negatively affect your business:

• Security vulnerabilities: When data is scattered across unknown or poorly secured locations, it becomes difficult to protect. They create blind spots that cyber attackers can exploit. Organisations then struggle to enforce encryption, access controls or threat detection consistently. And if you do fall victim to a cyber attack, the financial damage and operational disruption can be ruinous.
• Compliance risks: Regulations like GDPR and the upcoming EU AI Act require organisations to know where their data lives, how it’s used and who has access to it. Data sprawl makes this nearly impossible. Incomplete records, undocumented transfers and orphaned datasets can lead to non-compliance, fines and reputational damage, as well as loss of future opportunities.
• Operational inefficiencies: Managing fragmented data is time-consuming and error prone. Backups take longer, disaster recovery becomes more complex and teams often duplicate efforts because they can’t find or trust existing data. This slows down decision-making and drains IT resources that could be better spent on innovation.
• Financial impact: Storing redundant or unused data across multiple platforms drives up costs. Organisations often pay for excess cloud storage, underutilised SaaS licenses and overlapping tools. Without a clear inventory, it’s hard to optimise spend or negotiate better vendor terms. Plus, it becomes harder to make accurate cost-saving decisions if data siloes are in place.
• AI unreadiness: AI systems thrive on clean, well-structured and accessible data. When data is fragmented, inconsistent or poorly labelled, it undermines model training and output quality. Worse, it can introduce bias or errors that go undetected. Data sprawl also complicates lineage tracking, making it harder to explain or audit AI decisions, an increasingly critical requirement for ethical and regulatory compliance.

Building strong foundations to prevent data sprawl

Avoiding data sprawl requires a proactive, strategic approach that aligns data practices with business goals. Here are the foundational steps every organisation should take:

1. Establish a data strategy

A clear data strategy ensures that data collection, storage and usage are intentional and aligned with business outcomes. This means identifying which data is critical, how it supports decision-making, and where it should reside. A good strategy also defines how data will be governed, shared and protected across the organisation.

Begin by auditing your current data landscape: where data is stored, how it’s used and where gaps or risks exist. This helps identify redundancies, silos and areas lacking oversight.

2. Implement robust data governance

Governance is the backbone of sustainable data management. It provides the rules, roles and responsibilities needed to keep data organised and secure.

Start by defining ownership and accountability. Assign data stewards or owners for key datasets. These individuals are responsible for ensuring data quality, access controls and compliance with policies.

You’ll also want to establish clear guidelines for how long data should be kept, who can access it and when it should be archived or deleted. This helps prevent unnecessary accumulation and reduces risk.

3. Centralise data inventory

You can’t manage what you can’t see. A centralised inventory provides visibility into what data exists, where it’s stored and how it’s used.

Tools like Microsoft Purview or Azure Data Catalog allow you to scan, classify and index data across cloud and on-premises systems. This makes it easier to find, understand and govern data assets.

Consistent metadata helps users interpret data correctly and enables automation for classification, access control and compliance. So, aim to tag data consistently with business context (e.g. sensitivity level, department, purpose) to improve discoverability and governance.

Tools and technologies that help

Technology is essential for enforcing governance and maintaining control over sprawling data environments. It can play a key role in helping organisations discover, secure and manage their data effectively – and with a lot less effort. But it’s crucial to find the right tools that align with your goals.

• Automated data discovery and classification: Tools like Microsoft Purview automatically scan and classify data across cloud and on-premises environments. This helps organisations build a centralised inventory of their data assets, apply sensitivity labels, and enforce compliance policies. By knowing what data exists and where it resides, businesses can reduce duplication, eliminate orphaned datasets and ensure consistent handling of sensitive information.
• Cloud-native monitoring and logging: Observability tools like Azure Monitor and Microsoft Sentinel provide real-time insights into system performance, data access, and security events. These tools help detect anomalies, track usage patterns, and enforce governance policies across distributed environments. By monitoring how data is used and accessed, organisations can identify shadow IT, prevent misuse and maintain control over sprawling data sources.
• Data security platforms: Security is foundational to governance. Microsoft Defender for Cloud offers unified threat protection and posture management across hybrid environments, while Microsoft Information Protection (MIP) enables classification, encryption and rights management based on data sensitivity. These tools ensure that data is protected throughout its lifecycle, reducing the risk of breaches and unauthorised access, especially in environments where data is scattered.
• SaaS management tools: Uncontrolled SaaS adoption is a major driver of data sprawl. Microsoft 365 Admin Centre helps organisations monitor app usage, manage licenses and identify underutilised tools. Microsoft Entra ID (formerly Azure AD) provides centralised identity and access management, helping enforce conditional access policies and reduce shadow IT. Together, these tools support governance by ensuring that only approved platforms are used and that data access is properly controlled.

Building a culture of responsible data use

Technology and strategy alone aren’t enough to prevent data sprawl; organisational culture plays a critical role. Here’s how to create a culture of responsible data use that embeds governance into everyday decisions.

• Leadership buy-in: Strong data governance starts at the top. When senior leaders prioritise data management, it signals its importance across the organisation. This includes allocating resources, setting expectations and modelling best practices. Without executive sponsorship, governance initiatives often stall or remain siloed within IT.
• Cross-functional collaboration: Data should flow across departments. Breaking down silos between IT, security, compliance and business units is essential. Establishing a data governance council or working group can help align priorities, share insights and ensure that policies are practical and widely adopted.
• Training and awareness: Even the best tools and policies fail if people don’t understand them. Regular training on data hygiene, classification, access protocols and compliance requirements empowers employees to make informed decisions. It also helps reduce accidental data sprawl caused by poor habits, such as saving files in personal drives or using unsanctioned apps. Use Microsoft 365 tools like SharePoint and Teams to embed governance into daily workflows, e.g. by applying sensitivity labels, access controls and retention policies automatically.

Discover how to master your data

Data sprawl is a strategic challenge that affects every part of the business. From security and compliance to operational efficiency and cost control, unmanaged data can quietly erode performance and trust. But with the right strategy, tools and culture, organisations can turn fragmented data into a governed, high-value asset.

As businesses increasingly look to AI to drive innovation, the importance of clean, well-managed data becomes even more critical. AI systems are only as good as the data they’re built on. Without strong governance, even the most advanced models can produce unreliable or biased results.

If you’re ready to move beyond the data clean-up and start applying AI strategically across your organisation, join us at Infinity UNBOUND: Get to AI — a free, expert-led event designed to help businesses unlock the full potential of AI. You’ll hear from Microsoft and industry leaders, explore practical use cases and discover how to turn your data strategy into real-world transformation.