What is the Real Cost of an Internet Outage?
How much does an Internet outage cost? When it comes to
mission critical applications, most companies invest a lot of cash in order to
see results. Unfortunately, they do not get the desired outcome all of the
time. Despite the advancements made in IT infrastructure, businesses still have
to face downtime due to internet outages.
While unplanned internet outage falls under the
responsibility of the IT infrastructure to resolve, it is however a business
issue that sadly many businesses have to deal with. A major part of the
thorough evaluation process is being able to calculate how much money a
business can lose for each minute, hour or day of downtime. That being said,
while the exact number of the cost of downtime can be hard to quantify, certain
enterprises which depend on their ability to deliver IT services to customers,
such as ecommerce websites and telecommunications services are mostly hit the
hardest with downtime, with the damages of downtime reaching as high as one
million dollars or $11,000 of revenue being lost per minute.
Outage Period on Average
Whenever an internet outage occurs it is a race against time
for businesses to get back online before everything spirals out of control for
good. According to a study done by IP Process Institute, the average resolution
time per outage is 200 minutes, while the average outage incident length that
has been reported has been around 90 minutes.
Employee Productivity
Needless to say, downtime costs also have a major impact on
employee productivity, which is measured in terms of wages and other benefits
which are made idle due to downtime. Right after a downtime event it is good to
investigate the problem and find out the cause (whatever it may be) to keep it
from happening again. Other solutions such as hiring temporary staff to recover
any lost data and enter paper transactions. If customer satisfaction has been
damaged, you might also need a special marketing program so that those who are
disgruntled can be won back before they change their mind for good. Whether it’s
hiring more staff, having to pay overtime or coming up with a new marketing
strategy to win back those who left due to the internet outage, it is the
business that has to bear the brunt of unexpected internet outages.
Loyalty and Reputation
What is the reputation of your business worth to you? More
importantly, what is your reputation worth? Probably a lot, while it could be
hard to assess considering the long term effects, downtime costs usually involve
the loss of business, tasks of employees diverted from other tasks to getting
the IT system of track again and overtime expenses along with additional repair
and maintenance costs. Of course, these costs will vary from company to company
and will depend on when exactly the downtime even occurred, which systems were
at fault and what measures will have to be taken to get it functioning properly
again.
According to studies performed by IT analyst firms, on
average companies in the US lose between $84,000 and $108,000 for every hour of
IT system downtime. When it comes to total data center outages that had an
average recovery time of around 134 minutes, the average costs were around
$680,000.
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