02 Apr Calculate Your Cost of Downtime and 3 Ways to Reduce It
When your network or applications unexpectedly fail or crash, it can have a direct and far-reaching impact on your bottom line and ongoing business operations. Picture all your employees, unable to work, staring at blank computer screens.
How much does it cost? It depends on the size of your workforce (at least those employees affected), the average cost of employees per hour and how long you experience downtime.
Calculate the Cost of Your Downtime
You can calculate the estimated cost of downtime with a simple formula:
Cost of Lost Productivity = E (number of employees) x T (time down) x P (average pay per hour)
First, determine the number of employees. For smaller companies, you may know this right away. Larger businesses will need to add up exempt and non-exempt employees from all divisions. Next, determine how much ddowntimeyou’re experiencing. Multiply number of employees by hours of ddowntimeand multiply this total by the average hourly rate.
Here’s a hypothetical incident for a small business; if 100 of your employees were impacted for 4 hours and your average pay is $33 per hour, your cost in lost productivity would be $13,200. That doesn’t include the lost revenue, because assumedly, you charge customers more than you pay employees.
And there are other costs, some of which are more difficult to calculate: customers who couldn’t find you or contact you, lost sales, employee morale and frustrations and reputation damage. If you rely on your website to take orders or initiate bids, downtime means customers can’t access the business and may very well look elsewhere. Existing customers may be frustrated when the support team is unable to look up their information to answer questions and resolve problems. And imagine the time required if information or data can’t be recovered or restored.
Protect Your Company from Down Time
Some downtime is unavoidable; system maintenance needs to happen. Hardware must be replaced or upgraded periodically. But that planned downtime can be scheduled in advance when it will cause the least disruption. Avoiding outages entirely is almost impossible; but that doesn’t mean the number can’t be significantly reduced or that an outage needs to be an expensive disaster.
Here are 3 Steps to reduce the likelihood of downtime and to help your company function better when an outage occurs:
- Implement reliable backup procedures: Use a backup solution capable of keeping your data safe and secure. Create a schedule for daily backup and test the backup restoration feature so you’re ready to restore vital information in an emergency. The faster you can get data restored, the less down time you’ll experience.
- Put security systems and policies in place: Protect your business against common cyber threats with comprehensive security systems and policies. The average malware attack costs a business 50 days. The most expensive component of a cyber attack is information loss, which represents 43 percent of costs. Don’t forget cell phone protocols. Phone apps are a growing source of cyber attack.
- Get skilled help from a managed IT services provider: Working with a managed services provider means having an experienced IT team overseeing your systems. Configuration errors are a common cause of IT down time. Having a managed services team that specializes in configuring and supporting your systems can ensure that changes are made appropriately and correctly, without risk to your operations.