The True Cost of IT Downtime

IT systems have become integral in the daily operations of businesses and government organizations worldwide. Every now and then something will go wrong that will occasionally throw a wrench, disrupting daily operations and grinding everything to a half. Any single moment of downtime could have a detrimental effect on your business. When it comes to IT downtime, it needs to brought under control quickly so that business can resume as usual.

What is IT Downtime?

There are multitudes of reasons why downtime can occur. It could be because of a cyber-attack, dated equipment parts that overheat or fail, or human error. For equipment in particular, it could be that the network hardware and software is outdated, connections are broken, or even.

Your employees can’t email each other. Software won’t run. Important files on your servers can’t be accessed by employees.Any of these things can cause IT downtime which impacts your business in costly ways.

A survey was conducted by CA Technologies in 2011 that estimated the costs of IT downtime to $26.6 billion dollars. You will need to keep in mind that this is not limited to major corporations but small to medium businesses as well. Downtime treats everyone the same and businesses will take a hit. Here are 7 impacts that result from a network outage:

Four Modern Server Computers Isolated on White.
  • No cash flow
  • Revenue losses
  • Lowered confidence in the IT department
  • Damage to the company’s reputation among customers, which could potentially make them angry or annoyed on top of that
  • Loss of discount offers that you could’ve given out
  • Loss of productivity and overtime to compensate for that loss

The Rand Group provides a convenient measure the metrics of downtime per hour:

The cost per hour of downtime is calculated by adding labor costs per hour to the revenue lost per hour. To calculate your labor cost per hour of downtime, you need to factor in your revenue, number of employees, average annual employee benefits, the number of hours worked per week, and the percentage of the workforce an outage would affect. To calculate your revenue lost per hour of downtime, you need to know how much revenue you make every day and the percentage of your revenue an outage would affect.

Losses can mount up quickly when you take all of that into account.

Even a single hour of downtime can cost your business $100,000.00 to $300,000.00 in losses, which is a huge amount of pain that you could be spared from. The reality is that having zero downtime is unrealistic. Major tech companies have already postured themselves implement maintenance periods on certain days of the week in order to minimize downtime and keep the network running and available 24/7. While no company is immune to the corrosive effects of downtime caused by your network systems, there are ways to ease the pain.

What Are My Options To Reduce IT Downtime?

Businesses have a vested interest in making sure that IT staff are focused in keeping the network running as long as possible. Taking proactive measures instead of waiting for something to happen at the worst possible moment can save your company from significant costs.

Internal assessments would need to be conducted to see how well a network responds to outside stressors. An executive summary would need to be written to lay out a plan of actions and milestones to be taken in order to harden the network. Your company will need to get into the practice of prioritizing which services in your organization will need to be restored first.

Your downtime mitigation options ultimately depends on the size and scope of your company. As an owner, you will need to interact with your IT staff regularly to ensure that the network continues to run and that your company has contingency plans in place in case something goes wrong. Minimizing downtime ensures that your brand recognition, employee morale and customer experience remains intact.

If you are a large entity with money on hand, you should consider investing updating the servers that run your network. If you do not have the budget for an upgraded network infrastructure and the staff to support it, there is also the option of hiring a managed service provider. An MSP is a third-party provider that remotely handles the management of your IT systems for you, and provides significant cost savings.
MSPs also provide the following benefits in addition to the cost savings:

  • Direct access to experts who know their craft
  • Proactive and rapid response times to keep downtime to a minimum
  • Greater focus on the business at hand
  • Ready infrastructure
  • Better data management and analytics tools on hand
  • Innovative tech and excellent business practices
  • Risk and compliance mitigation
  • Provides business agility so that you as the owner can remain focused on your business

There are no shortage of benefits when partnering up with an MSP that handles your IT infrastructure for you.

In closing, we touched up on network downtime a lot throughout this article. Information systems are an integral part of business practices because we collectively rely upon them for business transactions through email, chat, data, and other activities. Companies should make it a practice to prepare for the worst.