THE REAL COST OF DOWNTIME

THE REAL COST OF DOWNTIME

 

The Cost Critical Application Failure

Server downtime is an issue that plagues the vast majority of organizations. When servers go down, many if not all organization’s most critical applications become unavailable, and the cost of being unable to do business mounts minute by minute.

What is the Actual cost of down time?

This is a question that many organizations don’t have an answer to. This is because many organizations don’t measure their cost of application down time and if they do they do it incorrectly. What organizations don’t know is that without the exact information, it will be hard for them to make sound investment in data center technology. At the end of the day high availability of the business depends on the organization based on the value a computer has to an enterprise. It is important to consider that the applications that levy the highest downtime cost on your organization are likely to be the ones you want up and running first after a server outage. What is the value of these applications, and what does it cost you when they are inaccessible? Without knowing the true cost of downtime, your organization can’t properly and cost-effectively protect itself.

The Actual Cost of down time

The costs of downtime include both direct and indirect costs. Direct costs are expenses that can be completely attributed to the production of specific goods or to a particular function or service, whereas indirect costs are more difficult to quantify but can be even more damaging to an organization

The cost of down time involves much more than just lost wages. The cost of down time can be broken into the following Categories

Business Cost; these are the first costs that come to mind for most people. Lost wages, overtime, and remedial labor costs all add up during an outage. Other business costs include lost inventory and the scrap of work in progress, potential legal penalties for not delivering on service-level agreements, and litigation costs due to third parties seeking compensation for losses incurred during a system outage

Productivity Cost; During an outage, employees can’t perform their regular duties. Though production cost varies from one industry to the other the common way of calculating production cost is. (average employee wage x number of hours production stops+ overtime costs for employees to make up lost work time) If employees are salaried and not paid overtime, they may be forced to put in extra work hours, which can take a toll on both employee productivity and morale, tougher to measure but certainly still costly

Recovery Cost These costs include the price paid to repair the system, IT staff overtime, and third-party consultants or technicians needed to restore service. Another consideration: the opportunity cost sacrificed when IT needs to focus on system recovery instead of working on other critical projects for the organization

Customer Loss; The effects of indirect costs can be felt long after an outage is resolved. Previously loyal customers can lose faith and take their business to competitors. Once a company is seen by its customers as unreliable, it can be very difficult to undo the perception

Reputation Damage; Bad publicity can cause major damage to an organization and not just large ones. It’s true that the traditional press loves a good headline about bad news at a big company. But what can a complaint on Twitter or a negative post on Face book cost you? Converges found that one bad tweet can cost a company 30 customers. And while industry websites and bloggers don’t always have a large audience base, they do have the rapt attention of your target market. This means that one negative blog post about your company can make a huge impression on your customers and prospects

Share Holder Value Impact; Bad press can also devalue a company’s stock and reduce its market capitalization. Especially in shaky economic times, the stock market reacts to negative press about a company, even more so if the news is about a significant sales loss an event that is entirely possible when servers go down

In conclusion,Having in mind your desired availability for your critical applications, it therefore necessary to chose a solution which will enable your organization to prevent all the loses which have being mentioned above by minimizing down time. Are you looking for such a solution you should no further because PEPEA DISASTER RECOVERY has got your back. You can reach us sales@ke.msgafrica.com