Our network assessment is a detailed map that will identify holes and any areas of improvement that your network may need. A network assessment is what we recommend for understanding where your network is doing a good job, and where it’s not. To mitigate the negative consequences of downtime, have a thoroughly reviewed plan for disaster recovery and business continuity. The cost of IT downtime is, frankly, enough to cause some companies to go out of business. Would you require the services of a PR firm to get your organization back on track? Considering these possible costs along with the calculations above and it’s easy to see why network management should be a robust part of your IT strategy. Would customers and prospects lose trust in your company, and to what extent? Hard to say, but we’re willing to bet that several people wouldn’t come back. Would your company miss important deadlines or be unavailable to customers and prospects at a critical moment? If their network management was sub-par, the answer is undoubtedly yes. Is it possible your organization would lose customers as a result of downtime? Absolutely. We’ve talked about how this sort of IT Downtime can lead to a hit in your company’s reputation. Other costs are more difficult to determine. In hindsight, network management seems like a good investment, right? That’s a lot of costs that might add up otherwise. For some businesses, downtime may negatively affect their supply chain, causing delays and fees. There may be recovery costs, such as the cost of employees working overtime, the cost of repairing devices or systems, and data recovery costs. These aren’t the only costs to consider when calculating the total cost of downtime. H = hours of downtime Additional Costs for IT Downtime H = number of downtime hours Revenue loss = (GR/TH) x I x H The following formulas can be used to obtain a ballpark estimate for labor costs and revenue loss per hour of downtime: Productivity cost = E x % x C x H Businesses that provide online services or data center services will have higher IT downtime costs when it comes to this number. So, what really determines the cost of IT downtime? The most difficult part of accurately calculating your cost of IT downtime is deciding on the percentage impact and estimating what is referred to as intangible costs, such as the cost of a damaged reputation. According to Carbonite, average downtime costs per minute for small businesses range from $137 to $427 per minute. The study indicates that downtime costs for small businesses ranged between $82,200 and $256,000 for a single incident. While these numbers do provide data for businesses of a variety of sizes, they only take into account businesses with data center footprints.Ī study conducted by IDC on behalf of Carbonite takes into account all small businesses. It’s common practice to look at these numbers when trying to understand why network management is so important to your IT strategy. The chart above is from the Ponemon Institute’s Cost of Data Center Outages 2016 Report, and their mean costs of unplanned downtime are some of the most commonly cited in the industry. The minimum cost of IT downtime was $593 per minute, while the maximum was $17,244 per minute. Cost of Downtime Ranges $137 to $17,244 per MinuteĪs seen in the chart above, there is a significant variance in the cost of downtime between organizations. Understanding what IT downtime truly costs means understanding where that money goes to, namely labor cost, production cost, revenue loss, and reputation damage control. We also discuss how to calculate the average cost of IT downtime for your business and why good network management is crucial for your IT plan. Here we will review several average downtime costs that include small businesses and large enterprises. *The Ponemon Institute & Emerson Network Power
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