The Cost of IT Downtime
Updated: May 24, 2019
There are a lot of moving parts in every business. Ideally every part is always working to the best of its abilities and everything is running smoothly. However, this is not how life works. Problems happen every day in every aspect of life, including business. The difference between an average and successful business is knowing how to handle these problems.
Computer and network systems are at the very center of most company’s operating systems. Computer operations needs to be treated as a first-class citizen. Your computer network can no longer be treated as a peripheral system, but a critical one. Yes, getting the office cleaned, and making sure there are enough pens and other office supplies is important, but you could probably get by without them for a day. Could your business get by without computers for a day?
Everyday Causes of Downtime
While site-wide disasters (natural and man-made) definitely happen, they only account for around 2 – 5% of all downtime. That is a subject for another day. Everyday issues, on the other hand, account for almost entirely for what will cause your business downtime. If your website is down, if your network is down, you ARE losing money.
These include the obvious – hardware, network, internet and other failures, but also hidden issues. Hidden downtime is caused from things like slow computers, slow browsing, and interruptions. Both obvious and hidden downtime issues cause productivity and time loss.
Cost of Downtime
Downtime costs come from a variety of places, but some of the major ones are:
Loss of incoming revenue
Loss of employee time and payroll associated
Cost of repair
Brand reputation damage
According to a study by Databarracks, a little over a third of companies/organizations do not know what an IT outage could cost them. The actual cost varies from industry to industry and business to business. A huge portion of what people do all day at their jobs will have to wait until that computer or network is working again. If a business relies on orders being fulfilled from their website, and the website is down, they will get no orders during the time of that outage. If computers are not usable, orders probably can’t be fulfilled until a later time. Information to help service the customers issue also may not be available. This causes loss from incoming revenue, but there are other areas of loss.
There is the loss from paying employees while they can’t do their work. Even if your outage lasts only an hour, that is one major interruption. You must add on the amount of time it takes to get back on task to the time the system or hardware was unusable to calculate true downtime.
Then there is the cost of repairing what is broken. Often repairing something after it is broken is more costly than regular maintenance. Think of your car. It probably requires a minimum maintenance of oil changes every so often to keep things running smoothly. If you didn’t handle that maintenance you would likely end up having to replace the engine, which is a much higher price than those few oil changes a year.
But perhaps even larger than those is the potential damage to your brand reputation. If a customer tries to contact you and your website is down, or your computer system is down, they will have to try later. The chances of that person trying later will get exponentially smaller as the length of downtime increases. If they are a first-time customer, they may never come back. If they are a loyal customer, they may come back but your reputation still took a hit. This is a much harder loss to calculate in dollars but is incredibly important to every business.
Try this online calculator to help you figure out what your downtime cost would be.
Limiting the Everyday Causes
These is no real way of eliminating the causes, but many can be predicted. Employing a monitoring system, instead of the break/fix model can cut down on your downtime significantly. Hardware breaking down will always happen. If you pay attention to how it is doing with regular maintenance and monitoring, you can tell when it is heading for a break down and act accordingly. It is also a good idea to have a plan in place for when your network is down to limit the loss of productivity.
Making sure your operating system is up to date is very important. With the end of Windows 7 coming, you will want to make sure you have upgraded before January 14th 2020.
If your business relies on computers to run effectively, you need to be monitoring their health and productivity. Someone absolutely needs to be taking care of this whether in house or out.
Downtime will happen but being prepared can significantly decrease the loss associated with it. Employing managed IT services will make a difference.