Chaos. Frustrated customers. Waiting employees. Thousands of dollars lost per hour.
Having an IT failure can be one of the most stressful experiences a business can encounter in today’s tech-reliant business environment. IT downtime can entail simultaneous hidden and apparent costs to a business that can impede operations for an extended period. Loss of productivity, data cost and the financial cost are among the consequences of an IT failure.
When a business experiences an IT outage, one of the most apparent costs is the loss of productivity among employees. While management is busy trying to restore normal operations, employees are generally wasting time by waiting for IT to be fixed. This can have adverse effects on customer support, normal day-to-day operations and significant loss in revenue. Additionally, your business is still liable to pay employees for those wasted hours even though they can’t provide value to your business. On average, businesses lose 14.1 hours annually on IT downtime; this is nearly two days worth of work, repair costs, and hours paying employees. Employees also spend an average of 30 minutes per week trying to solve their own PC problems. Depending on the size of your business, the hours it takes to restore operations may vary along with repair costs.
The financial cost of an IT outage is generally the most apparent effect of an IT outage. The loss to the bottom line can be affected by several factors. The first component is the loss of revenue from customers and clients due to the IT outage. This is a variable that depends on the size and nature of a business. For example, an e-commerce company with tiny profit margins will likely suffer more costs due to inventory in comparison to a consulting company. The average cost for businesses across all sectors is $5,600 per minute, which adds up to over $300,000 per hour; this figure takes into account payroll, revenue and some other factors.
Lastly, the data cost is also an expensive aftermath of an IT outage. Data loss is more problematic than the apparent loss to the bottom line for several reasons. Depending on the nature of your business, data loss can come with unexpected and costly consequences. During the outage, if confidential data of customers are lost, your business is liable for both financial and legal consequences. This can result in ongoing legal battles, damage to reputation and accumulating fees of all kinds. Also, the data cost includes key applications for business processes like sales or marketing software. Damages to key applications will likely take an extended time to fix in addition to dealing with any issues with customer data.
Although IT downtime can be extremely stressful, having a contingency plan in the case of IT failure occurring can be helpful and offset some of the damages. Click here for a free assessment from Skyriver IT and we can help assess your IT risks and design a plan for your business.