IT downtime – What are the risks & how to minimise costs

Published on the 14/05/2018 | Written by Chris Dickinson


Managing tech downtime_Pronto cloud

Whether the result of natural disasters or outright malice, IT downtime is more than an inconvenience: when mission-critical applications go offline, it can mean disruption and disaster…

Businesses are experiencing extraordinary growth in the volume of data they generate and collect. In fact, every day the human race creates 2.5 quintillion bytes of data. Looked at another way, 90 percent of the data in the world has been created in the last two years –and a lot of that is business data.

Every time someone visits your website, clicks on an ecommerce cart, or tweets about your brand, new data is created and triggering relevant business functions. Likewise, every time a staff member logs a customer support request, confirms a new client project, or files an invoice, new data is being captured, prompting business systems and relevant actions by your staff. This is why nearly 75 percent of all business applications are now labelled as mission critical – which means that if you lose access to these applications your business operations are disrupted or stop.

Downtime impacts bottom line
There are many causes for IT downtime including natural disasters, human error and malicious acts by hackers. According to a report from Gartner, the average cost of downtime is US$5,600 per minute. Translate that into an hour, and the same report estimates downtime:

  • at the low end can cost US$140,000 per hour
  • US$300,000 per hour on average
  • and at the high end, up to US$540,000 per hour.

Alarmingly it’s estimated that 80 percent of organisations are unable to afford more than 8.76 hours of annual IT downtime. Size or IT budget does not appear to be a barrier for downtime with 59 percent of Fortune 500 giants experiencing a minimum of 1.6 hours of downtime per week – therefore losing close to a million dollars each week.

“59 percent of Fortune 500 giants lose close to a million dollars each week dues to downtime.”

So what’s contributing to these costs? One of the major factors in downtime is that your staff can’t be productive. They either become limited in the tasks they can perform, or they simply can’t do anything until the systems are back up and running. Staff can also take a while to spin back up to speed after a disruption, again hampering results.

Downtime also interrupts the normal functioning of the organisation. If the systems aren’t working, your company isn’t writing invoices or processing transactions. That’s going to be a major hit on cash flow, and will ultimately impact the bottom line. It also costs money to recover from downtime, and it might not always be possible to get back all data that was lost. This means customers and staff have to be approached to reproduce the lost data, further adding to the cost of the recovery program.

If you’re running a customer-facing business, whether it’s through a customer service portal, or via ecommerce, downtime means that you can’t fulfil the needs of those customers. That’s lost sales and lost sales support.

There’s also something else that’s harder to measure – reputational loss. If a customer cannot be served, they’re going to go elsewhere. Worse still, they may be inclined to write about it on social media, further amplifying the fact your organisation didn’t meet their needs. According to Dunn and Bradstreet, half of organisations that had experienced downtime said it damaged their reputation and 18 percent of the organisations surveyed described the reputational aspects of downtime as being ‘very damaging’.

If hardware has failed, there’s going to be a cost associated with replacements and getting the organisation back to where it was before the disaster took place.

The final costs to consider are regulatory. If you’re operating in a business area that is highly regulated, such as financial services, government or medical, then there’s going to be a backlash from regulators, questions asked, and possible probes into why the downtime happened in the first place. On top of that, there could be fines associated with the business IT going down and not fulfilling its obligations.

Prepare to recover
Trying to avoid downtime is becoming increasingly impossible – a bit like the quest for immortality! So rather than focus on chasing the impossible, think about how you can prepare to best live the life you have.

Some businesses can live with a pure cloud back-up solution where recovery times and the potential for data losses can be significant. By using a cloud back-up, the system can be restored over time and can bounce back from the disaster.

Sometimes, however, a cloud back-up isn’t enough. If you have applications that are absolutely critical to the running of your organisation, then it makes sense to invest in Disaster Recovery as a Service (DRaaS). A business should identify which applications cannot afford downtime and should be protected by a disaster recovery solution versus those that can be simply backed up into the cloud. This helps you manage your systems protection costs.

With DRaaS, your applications are backed up with incremental restoration periods. This means that if you experience a disaster, such as a malicious attack, you can quickly go back in time to a recovery point, keeping critical applications up and running, and in doing so, maintaining business continuity and avoiding the costs of downtime.

A further benefit of DRaaS is that it lets you test your disaster recovery at any time. This means you can simulate a disaster and recovery at any moment so that you are ready to respond in the event that something does happen to your IT infrastructure.

I often compare the requirement for a DRaaS solution in business to having car insurance. If being on the road in your car is absolutely critical in your day-to-day life, then subscribing to a premium insurance package is sensible. In the case of a road incident or breakdown, you need the right safeguards in place that will ensure you’re back on the road swiftly – and with minimal cash loss.

Downtime is an unfortunate reality that businesses have to accept, but it doesn’t have to impact your profitability. The right technology partner can help you find a solution that protects your business – while you focus on growing it.

Chris DickinsonABOUT CHRIS DICKINSON//
Chris Dickinson, General Manager, at Pronto Cloud Managed Solutions.

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