The Real Cost of Outages: Data Beyond Your Downtime Calculator

Do you know the true cost of a downtime event for your business? You may have run some numbers through a downtime calculator and have a rough estimate of the impact of downtime on your business. However, you are probably not considering some costs that are harder to quantify. And those costs could significantly affect your bottom line.

According to ITIC’s 2017 Reliability and Hourly Cost of Downtime Trends Survey, almost half (47 percent) of small to medium-sized businesses estimate that just one hour of downtime means $100,000 in lost revenue and end-user productivity. For large enterprises, these costs can climb into the millions, especially for verticals like healthcare, manufacturing, retail, transportation, and utilities.

Downtime calculators tend to focus on losses due to decreased employee productivity and a pause in ecommerce availability. Depending on the length of the outage, these costs will be significant.

But have you considered the real costs associated with losses due to human error, physical security breaches, cybercrime, environmental disasters, and even utility failures? They can be much more difficult to quantify, yet do heavy damage to your budget and reputation.

Take a look at four reasons why outages and downtime might be costing your business more than you think.

1. Lost employee productivity and morale and beyond

When systems go down, worker productivity generally falls. The decline depends on how much each employee relies on information technology to do his or her job.

A downtime calculator can tell you how much your company is losing per hour, by taking into account employee wages plus each person’s utilization percentage. But your losses can extend beyond just these hourly costs.

As an outage happens and in the hours and days following, some of your staff will have to stop working on revenue-generating projects and focus on getting systems back up. You may also incur overtime costs for staff putting in hours beyond the regular workday or even the cost of additional temporary workers.

There will also be a burden on your regular workers when they’re forced to clock extra unplanned time on the job. Employees may resent the overtime cutting into their personal lives, and the outage may have an impact on morale. Frequent outages might eventually cause valued staff to move to another company with better work–life balance.

2. Diminished company reputation and customer loyalty

It takes much less time to lose the standing of your business than the time it took to build your company’s reputation. You also run the risk of customers taking their business elsewhere.

When your reputation takes a hit and customers leave, your bottom line is obviously affected. In order to regain some traction, you may need to uplevel your marketing game by working with an outside agency or pouring more money into the budget. Companies facing negative publicity in the news might even look to PR experts to limit the damage.

Customer churn and additional marketing activities can take a big bite out of your budget. It’s a hidden cost of downtime that shouldn’t be taken lightly.

3. Data loss plus recovery costs

Data losses are common when you encounter unplanned downtime. Employees may not save their work frequently enough, or your database might not have a recent-enough backup. Worst case, you might be affected by a virus or ransomware.

Data recovery is a difficult process that’s not always successful. And it’s a cost that you might not have budgeted for.

It takes extra time and effort from your IT staff to get your databases and servers back up and running. That’s time you might have spent on revenue-generating business initiatives rather than on IT recovery processes.

4. Out-of-compliance violations

If your company must maintain PCI compliance or follow HIPAA regulations, then you don’t want to put secure data at risk for even a short time. It could mean fines and penalties plus additional scrutiny of your business processes.

A downtime calculator can’t quantify all the business costs related to an outage. That’s why you need strategies to maximize the uptime of your IT systems.

Many companies are turning to high-security data centers to avoid unplanned downtime. These secure facilities include uninterruptible and redundant power supplies, specialized cooling systems, and the right hardware and software to back up all your data.

Have you considered a new data center solution to keep your IT processes running smoothly? Hosting your valuable data and applications in this protected environment minimizes service interruptions and unplanned downtime, giving your company more time to do what’s most important: serving your customers for maximum revenue generation.