The Price Your Business Pays For Downtime

The Price Your Business Pays For Downtime

Are you familiar with the expression, “An ounce of prevention is worth a pound of cure”? Those words of wisdom from Benjamin Franklin describe the challenges faced by IT departments to keep their companies running.

As a business owner, you know that network downtime can result in lost revenue, data failure, lower employee productivity, and lost customers. So it’s wise to enforce a proactive plan to prevent these things from happening. Understanding the difference between break/fix solutions and Managed IT Services helps, and each type of technical support can lead to significantly different conclusions.

What is at risk?

Each instance of downtime is different in its own way, and most companies plan for these occurrences during hardware or software upgrades or routine maintenance. But pre-planned downtime must be kept to a minimum in order to keep your operations churning.

The serious problems begin when your company experiences unexpected downtime, which may force customers to switch to your competitors and hurt your brand’s reputation. Aside from lost revenues, here are other factors that will impact your bottom line:

  • Data and systems recovery expenses
  • Workforce overtime costs
  • Reduced employee motivation and productivity

To make things worse, the expenses caused by downtime are going up each year.

What causes downtime costs?

Innovations in technology are constantly shifting expectations. Customers are demanding their vendors stay open for business longer hours and expect them to be available on holidays and weekends, too.

As such, regardless of what products and services your company offers, every minute of unexpected downtime will increase overhead costs and upset customers. That means your IT Support team needs to be proactive in the battle against these events, always on the lookout for vulnerabilities and the latest ways to resolve them.

The following areas of downtime will force your organization to spend money on resolving issues:

  • Looking for the cause: forensics costs from investigating the complete or partial reason behind the outage.
  • Keeping downtime contained: expenses incurred to keep an outage from causing more disruption, worsening, or spreading.
  • Recovery costs: expenditures gained for returning your company’s core systems and network back to an operational state.
  • Costs of damaged equipment: expenses for new repairs or equipment purchases, as well as refurbishment.
  • Loss of user productivity: related costs and lost time that is associated with your employees during downtime.
  • Third-party expenses: costs of any contractors and their contributions to your projects

How do you calculate the overall price related to downtime?

Of all the costs resulting from downtime, lost sales revenue is usually the largest, especially if your business is an eCommerce business. A busted network means a busted website, which means no sales for however long it’s down.

To compute the overall cost of lost revenue, the first thing you need to do is find out what systems are integral to making your company money -- in other words, which systems do you absolutely need to function productively and meet client demands?

Calculate the average amount of revenue your firm collects per hour to figure out how much each hour of downtime costs. The overall cost of downtime will vary from one business to the other, but you must determine an acceptable maximum and prepare accordingly so you never exceed it.

The good news is that Complete Technology Services offers a range of IT solutions and managed services to relieve most of the concerns that small businesses in Kansas City have regarding downtime. Give us a call today to learn more about how our reliable services let you focus on your business without worrying about downtime costing you money.

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