Why is Downtime So Harmful to a Business?

We don't often consider the total actual cost to our business when technology issues cause downtime--and the damage may be much more costly than you realize.

Your Company’s Largest Expense:

Nearly every business has this one thing in common: the cost of salaries are the biggest monthly expense. A business lives or dies by its ability to be productive with inventory of hours purchased each month in salary. When unplanned downtime or disruptions halt the flow of business, the cost in manhours is staggering. Not only do we have the direct costs of labor, we have the indirect costs of lost opportunity. It’s a sobering exercise to pencil out what an hour, a day or gulp… a week, of downtime costs a company.  

The Causes of Downtime:

What causes downtime? There are many hypothetical factors but we’ll focus on the events that are statistically more likely to occur. This is an important exercise because if an event can be talked about and planned for ahead of time, plans can be put in place to minimize or avoid the most common causes.  

  1. Hardware failure in computers that are past their useful age. When a switch or server fails that is over 60 months old, it shouldn’t be a surprise. In fact, USA Today reported that workstations over 48 months old and infrastructure hardware (switches, routers, firewalls, servers) that are over 60 months old have an 80% chance of failing during the course of a business day. When this same equipment is below those ages, they have only a 20% chance of failing randomly.
  2. Cyber intrusion happens in a variety of ways but the most common disruption we see in small businesses occurs when an unsuspecting employee opens an email attachment and installs an application on their computer that encrypts all of the network data, oftentimes including poorly designed backup solutions.  

Real-world Example:

It’s always helpful to hear real-world examples of disruptions. For the first example of hardware failure, a company that we work with decided to run infrastructure hardware well past it’s reliable life span. When the main server hardware failed, all five of their virtual servers were offline for several days while new hardware was emergency drop-shipped from the manufacturer. The hardware and emergency labor cost an estimated 60% more than it would have under a normal maintenance replacement and the team of over 100 employees was disrupted for several days.  

An example of the cyber intrusion comes from a prospective client who we spoke to recently about their experience. Their current provider failed to patch an outdated email server that hackers were able to compromise. The impact to the business was at least a four-day disruption to email for some of the key decision makers in the company.  

Focusing On the Right Solutions:

When designing a technology solution for your company, we try to identify the high priority applications and the most common fail points. With the priorities defined, we can help develop contingency plans that will help you keep your most valuable assets working and your business functioning.  

Image by Steve DiMatteo from Pixabay 

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Philantech3 is a complete IT services & IT support company working with organizations in Spokane.