How Much Does Network Downtime Truly Cost Your Company?

Read this article on InformationWeek.com

How many hours of network downtime did your company experience this past year? The average company suffers from about 14 hours of IT downtime per year. Regardless of whether you experienced more or less, I’m positive that there was a negative financial impact associated with each downtime event.

According to a 2011 survey by CA Technologies, small enterprises lost, on average, more than $55,000 in revenue due to IT failures each year, while midsize companies lost more than $91,000 and large companies lost more than $1,000,000.

Those numbers may shock you, but let’s think this through. How much are you paying idle employees? Did you pay overtime to make up for lost productivity? How much revenue did you lose that could have been generated? Did you incur late delivery surcharges? Did a loss of customer goodwill erode your ongoing revenue stream? Did you need to plan and execute campaigns to explain and apologize for the outage?

Costs Incurred From Network Downtime

Here’s a partial list to help you work through what downtime costs your company:

• All internal business processes will cease; inventory tracking/ERP, billing, HR, intranet, etc.
• Lost sales revenue; sales will have no access to customer or product data
• Lost employee productivity; no systems to keep them working
• No communication; no email
• Cost to restore IT systems
• Materials lost/disposal and cleanup costs
• Financial impact of customer dissatisfaction
• Contract penalties
• Compliance violations, if applicable
• Upstream and downstream supply-chain ripple effects
• IT and employee recovery costs
• Potential litigation/loss of stock value
• Missed deadlines that result in employee overtime
• Priority shipping charges