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Measuring the Impact of IT Downtime

Technology failure is one of the most frustratingly common side effects of doing business in this interconnected age. It’s difficult to quantify the impact of such failures, although scary numbers like $9,000 per hour are regularly thrown around. But a 2014 Gartner survey of CEOs and business executives from 410 organizations worldwide produced some intriguing statistics that speak to the need for comprehensive IT support:

IT Downtime Business Survey


Your server was down for an hour. How much did that cost?

To one degree or another, the vast majority of businesses today rely on technology to operate. For those that depend on it, unscheduled downtime of critical network components results in more than inconvenience and frustration. Downtime equals lost profits.

Many business owners don’t fully appreciate the costs associated with technical issues, so let’s see what an hour of server unavailability really costs.

Let’s say you’re a mid-sized online retailer with 150 employees and the average salary is $50,000. Your server crashes, and suddenly your employees are without email and database access. Perhaps even your web server is down as well. It takes an hour for your IT guy to respond to your call, drive to your location, and fix the server.

How much have you lost in worker productivity in that hour? Fulltime employees generally work about 2000 hours per year, so each employee averages $25 per hour in compensation ($50k/2000 hours). Multiply that by 150 workers, and you’ve paid your employees $3,750 for time that they’ve been unable to perform their job duties.

BUT WAIT, THERE’S MORE!

In addition to the $3750, you’ve also paid your IT person however much for a visit to your office and an hour’s labor. If in fact your web server also went down when the server crashed, you’ve also lost out on an hour’s worth of customer orders.

Let’s say your company averages 200 orders per day in the 12 hours between 9am and 9pm, with an average order of $50. 200 divided by 12 is 16.7 orders, and at $50 per order, that equals $835.

Even disregarding the cost of repairing the server, the one hour of downtime has resulted in $4,585 in lost employee productivity. This calculation also doesn’t account for soft costs like worker frustration, missed or delayed deadlines, and damage to the brand.

Consider that a catastrophic server failure, without an automated backup and disaster recovery solution, could require days or even weeks to fully repair, restore data and applications, test, and bring back online.

So, what’s the best way to protect yourself from lost productivity due to IT issues? Instead of waiting for something to go wrong before you contact an IT pro, choose an IT provider with a proactive approach to protecting your network and computers. CMIT Solutions actively monitors all your computer, servers, mobile devices, and critical components like firewalls and routers for potential issues and resolves them before they balloon into real problems resulting in downtime.

No disaster recovery plan?

Unsure if your backups are correctly backing up? Don’t wait for disaster to strike before putting a data security and business continuity plan in place. Sign up for a free technology and security assessment from CMIT, and we’ll show you how to protect one of your business’s most valuable assets—your data. Click Here for a free IT assessment of your business!

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