The True Cost of IT Downtime

The Financial Consequences of IT Downtime 

IT downtime can lead to significant financial loss. Studies show businesses can suffer losses of hundreds of dollars each minute of unplanned downtime. Higher operational costs, such as emergency repairs and employee overtime, are also possible. For this reason, preventing downtime should be a priority to work into your IT budget.

Determining the Cost of IT Downtime 

The most direct method to estimate downtime cost is to evaluate the loss of revenue while the system is down with this formula:

Downtime cost = (revenue per hour/operating hours) x downtime hours

Factors to consider beyond this when calculating downtime:

• Reduced productivity. Your staff cannot complete some daily duties when the system is offline.
• Reputational damage. Your company’s good name is on the line. A major stoppage can be long-lasting.
• Compliance and legal risks. It’s critical to have stopgaps in place to keep your operations compliant if your system is compromised.

Sector-Specific Costs of IT Downtime 

Losses from IT downtime are on the rise and play out differently depending on the industry. Here is how some prominent fields are affected.

Healthcare 

A server failure could render electronic health records unavailable. That could mean you are unable to perform certain functions, such as notetaking and accessing records for a healthcare provider. Certain tests might not be available if machinery is down that supports diagnostics and testing. All of this can prevent the intended flow. Healthcare facilities could be fined if they’re out of compliance during an outage.

E-Commerce 

If your site goes down, your sales halt. By some estimates, this could be thousands of dollars per minute, depending on the type of commerce and business size. During busy shopping seasons, the losses are amplified even further.

Finance   

Banking and finance have some of the biggest risks associated with IT downtime. Research puts potential losses in the millions. If the outage is extensive or happens as a result it could cost a company untold losses of current and future business.

Main Causes of IT Downtime

Identifying common causes of IT downtime can help anticipate potential problem areas. Here are some that come up often.

• Cyber attacks and security breaches. These include data breaches, hacking attempts, and malware infections. These endanger system availability and data integrity, which can diminish customer trust.
• Hardware or software failures. Disk drive breakdowns, server crashes, and other component flaws can cause downtime. Software bugs, poorly tested programs, and multi-software incompatibility can also present problems.
• Human error. Accidental data deletions, misconfigurations, and unauthorized access can cause system interruptions. Modifications to critical system settings can also be problematic.
• Insider threats. These can be malicious or negligent and are tough to recognize. Studies reveal it could take an average of 77 days to identify an insider threat, which can come in many forms, including cyber attacks, sabotage, theft, and more.
• Natural disasters. Earthquakes, floods, and storms can cause structural damage and downtime. Companies where natural disasters are likely should also have a disaster recovery plan.
• Network issues. Connectivity loss is reason No. 1, from cable damage, hardware failures, and ISP outages. In any event, network problems keep users offline, halt business operations, and cut off communication externally and internally.

Mitigating the Impact and Costs of IT Downtime 

With proactive monitoring, redundant systems, regular data backups, and other standards, you can safeguard your client’s IT systems, decrease costs, and increase protection. Rightsourcing these tasks to an MSP can be a cost-effective way to employ experts to assist in IT management.

Schedule regular system maintenance — This helps extend equipment life, decrease repair costs, and optimize system performance. It’s a good way to ensure compliance with regulations, energy efficiency, and equipment safety.

Prepare backup and disaster recovery plans — Take precautions to avoid accidental deletions or failures to save progress, losing a device with valuable data, software bugs, and more. Being prepared can also protect against issues of infrastructure or service, data theft, or database corruption. 

Organize incident response teams and strategies  — You’ll be able to track issues and identify conditions that lead to them. With a plan and teams in place, businesses can better manage risk and safeguard their digital assets with a proactive approach.

The Role of MSPs in Reducing Downtime 

A managed service provider, or MSP, manages a business’ information technology, or IT, remotely. This third-party entity often works with:

• Government agencies
• Nonprofits
• Small and medium-sized businesses

Rightsourcing tasks to an MSP can help reduce costly IT downtime, give the company expertise in an array of technological needs, and help to better your compliance and security.

IT downtime can be damaging to your bottom line and a threat to your business reputation. Operational costs don’t have to be prohibitive to safeguard your systems from these events derailing your business.

With help from an MSP like Techmate, you can gain peace of mind knowing experts are in your corner to mitigate those risks. Call for a free demo of services today.