Businesses everywhere recognize that today’s marketplace is only becoming more dependent on technology, not less. As a consequence, having your systems offline means that your business will be, too. See why downtime is considered by many to be the biggest threat to your company’s finances, and where the many additional, unexpected costs are coming from.
The Costs
According to a recent survey by ITIC, 98% of organizations state that just one hour of downtime costs them over $100,000. With Dunn & Bradstreet estimating that over half of Fortune 500 companies experience a minimum of 1.6 hours of downtime per week, that means these companies are losing over $8 million a year.
The scariest part? That’s just the loss that we can reasonably estimate. That doesn’t include all of the often-overlooked, insidious damages as well.
These damages can include:
- Overtime
- Travel expenses
- Missed deadlines
- Unmet compliance
- Effects on stock prices
- Effects on credit ratings
- Effects on company image for customers and investors
- Campaigns completed to explain or make up for the lack of service
- Etc.
While most downtime is actually planned – taking the shape of routine maintenance, updates and upgrades – the most costly downtime is typically unplanned, despite accounting for only about 10% of all downtime. To get some perspective, consider these statistics: unplanned downtime alone costs businesses an average of $5,617 a minute, which comes out to $337,020 an hour. That’s over triple the cost per hour mentioned above for both planned and unplanned downtime combined. To add insult to injury, these costs are all very concrete, and don’t consider the long-term effects on employee productivity or customer satisfaction (check out this article to assess the costs of downtime for factors like these).
Why Insurance Doesn’t Cut It
Since IT has become the fabric that ties together every company’s operations, downtime either hampers or halts the productivity of most (or all) employees. This can occur with something as simple yet critical as having an e-mail server go offline. Some companies turn to insurance providers to mitigate these costs, but the truth is that they just don’t cut it.
Besides being notorious for reluctance to pay, filing a claim takes additional time, effort, and cost in addition to what was already lost. Insurance providers also don’t typically cover any other expense than lost sales, a debatable figure which is only one of many factors contributing to the overwhelming costs of downtime. Meanwhile, although insurance underwriters are trained to spot any potential risk of loss to your company, IT managers typically lack the expertise or experience to accurately assess these risks. As a result, insurance companies easily take advantage of IT managers that underestimate their losses.
Solutions That Save
Step 1: Conduct a downtime business impact analysis.
Step 2: Implement solutions like data replication and high availability (HA) to ensure that your systems remain continuous during a failure.
Step 3: Establish tried-and-tested disaster recovery (DR) solutions as well, to ensure that your data is resilient to disaster scenarios, and that data loss won’t be replicated to your target site.
Too often, business executives and administrators consider solutions like disaster recovery (DR) and high availability (HA) as mere “insurance policies.” The reality is that HA is the ultimate protection from downtime, letting you seamlessly pick up where you left off, whether it’s during planned maintenance or a natural disaster. When the disturbance ends, synchronizing the systems and switching back is effortless, even without your clients knowing that a disturbance ever occurred. Meanwhile, DR solutions will ensure that your data is resilient and immune to loss or corruption (see this article for more details on why HA and DR can’t replace on another).>
With today’s always-on business environment and the level of reliance on technology only increasing, users take uninterrupted access for granted. Without solutions like DR and HA, periodic interruptions are simply unavoidable, making downtime one of the biggest threats to any company’s profitability.
For more information on how to protect your company from downtime, contact us today at 317-707-3941.