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Strategy | 3 min read

The Real Cost of Operational Downtime

Jeff Dotzler
Written by Jeff Dotzler

Stuff happens. Today’s technology, advanced as it may be, is far from perfect, and operational downtime at one point or another for any business is almost a guarantee. The question isn’t so much whether business downtime will happen, but rather, how unplanned delays and stoppages may affect other aspects of your business and erode profitability.

When you understand the real cost of operational downtime, you’ll likely be more motivated to do whatever you can to minimize it. So, let’s get into what constitutes downtime and all the factors in play.

Two Primary Types of Downtime

Generally speaking, there are two types of downtime that interrupt business productivity: those resulting from faulty tools, and those resulting from circumstances that interfere with normal business operations. Think of them as “everyday” issues and “catastrophic” issues, respectively.

  • Everyday issues interrupt productivity and can incur lost time and repair costs. They typically stem from equipment and technology — computer crashes, hard drive failure, printer jams, toner/ink outages and slow internet connections, but can sometimes be the result of human error
  • Catastrophic issues stop business productivity altogether, sometimes for an extended period. A catastrophic issue may be out of the business’s immediate control — as in a natural disaster — or it could be a consequence of a cyberattack or full-scale data loss

Is There a Literal Downtime Cost?

It’s been researched, discussed and speculated just how much downtime costs per minute or per hour. Some research, like the Gartner report from 2014, indicates an average cost of $5,600 per minute. Other sources, however, say it approaches $10,000 per minute.

Any way you look at it, it’s expensive.

Hidden Costs

The true dollar amounts can vary depending on the situations, employees affected and the nature of your business. But the hidden costs are practically universal.

Brand Reputation

When systems fail and a business is left scrambling to get things up and running again, any customers that try to work with the business during that downtime or affected by a data loss or other mistake will end up frustrated. If this happens frequently, those customers could become perpetually upset with you and take their business elsewhere — possibly leaving angry, reputation-damaging reviews in the process.

Such a hit to the reputation could wind up costing you future customers, who may see those reviews and do a 180 toward one of your competitors. One of the most important things any business can do is build up a loyal customer base. That’s tough to do if you’re experiencing frequent downtime; any shot at loyalty can go down the drain.

Idle Time

If your employees can’t work, what can they do? You still have to pay them for their time, so you’re paying them for lost productivity and to wait until your systems are back up and running. That kind of waste can vary wildly depending on how much each employee is paid, but it’s wasteful nonetheless. It can also domino into affecting other aspects of your business, like needing to reschedule and bump projects down the road while you recover and catch up from the downtime.

Employee Retention

We’ll keep this one quick: Would you want to work for a company that experienced frequent system issues or cyberattacks? Chances are, probably not. Others would likely answer the same. If you’re experiencing high turnover, that’s going to cost you in frequent HR, recruiting and training expenses.

Lost Revenue

When your business isn’t functioning, it’s not making money. Could you have made a few more sales in the hour that your software was down? Was your IT department held up fixing an issue rather than heading out to your new customers to update their operating systems? If you’re spending your days experiencing hours of downtime and trying to fix the issues, that’s time you won’t be spending earning revenue.

How to Prevent and Prepare for Downtime

The Cloud

Whether you use Microsoft or Google for your cloud-based services, storing valuable documents and resources on the cloud helps ensure access from almost anywhere with an internet connection. If hardware acts up and you can’t get to a document you need, sign onto the cloud with a different device and keep at it.

Virtual Desktop Infrastructure (VDI)

Virtual Desktop Infrastructure, or VDI, allows for secure connections remotely. When it comes to avoiding downtime, the added security of a VDI can help prevent cyberattacks or other unauthorized access, better ensuring a smooth workday for employees.

Read More: Top 5 Virtual Desktop Infrastructure FAQs for Business

Hire a Technology Management Provider

Getting a Technology Management provider like Elevity by your side goes a long way to proactively address downtime concerns so your business can be better prepared to tackle possible obstacles.

Before you make that hire, however, you may be wondering how modern Technology Management differs from traditional IT services. To learn more details, we invite you to click the link below and access our free infographic, Traditional IT vs Technology Management.

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