{"id":13858,"date":"2020-11-23T11:34:36","date_gmt":"2020-11-23T11:34:36","guid":{"rendered":"\/gb\/en\/blog\/?p=13858"},"modified":"2021-07-13T13:30:30","modified_gmt":"2021-07-13T12:30:30","slug":"cost-unplanned-outage","status":"publish","type":"post","link":"\/gb\/en\/blog\/cost-unplanned-outage\/","title":{"rendered":"The True Cost of an Unplanned IT Outage"},"content":{"rendered":"

When it comes to acquiring mission-critical applications, UK enterprises are willing to make huge investments. Think CRM<\/a>, supply chain systems and project management tools.<\/span><\/p>\n

Despite efforts invested in infrastructure reliability, many organisations continue to deal with downtime that lasts from a few minutes to several days, completely paralysing the business and causing irrecoverable losses. Especially in the context of COVID-19, where many businesses are fighting for their survival, the cost of an unexpected outage could mean the difference between closing your doors or remaining open for business.\u00a0<\/span><\/p>\n

Though unplanned outages are branded as \u201cIT issues\u201d they are, more importantly, <\/span>revenue issues.<\/b> Unplanned outages significantly reduce revenues for the company experiencing them. A<\/span>ccording to<\/span> ITIC\u2019s 2017 Reliability and Hourly Cost of Downtime Trends Survey<\/span><\/a>, 4<\/span>7% of SMBs estimate that just one hour of downtime means \u00a377,000 in lost revenue and end-user productivity. For large enterprises, these costs can climb into the millions, especially for data-driven industries like healthcare<\/a>, finance, manufacturing, retail, transportation, and utilities. According to one <\/span>IBM Global Services study<\/span><\/a>, <\/span>the average revenue cost of an unplanned application outage was estimated to be nearly \u00a32.1 million pounds per hour. IT disruptions can affect the entire service chain of an organisation to their customers and community.<\/span><\/p>\n

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During unplanned downtime, IT leaders try to regain normality while minimising revenue impact \u2014 <\/span>49% of surveyed enterprises<\/span><\/a> list data recovery as a top technical challenge, and 53% rank loss of revenue as a top business challenge of outages.<\/span><\/p>\n

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According to <\/span>Dunn & Bradstreet, 59% of Fortune 500 companies experience a minimum of 1.6 hours of downtime per week<\/span><\/a>. To put this in perspective, assume that an average Fortune 500 company has 10,000 employees who are paid an average of \u00a356 per hour, including benefits. Just the labour component of downtime costs would be \u00a3896,000 weekly to the company, which translates into more than \u00a346 million per year. The cost of each outage affects each company differently, so it’s important to know how to calculate the precise financial impact. Read <\/span>how to quantify downtime <\/span><\/a>to run your own businesses\u2019 downtime impact model.\u00a0 <\/span><\/p>\n

The scope of downtime per year<\/h2>\n

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As Gartner has shown, downtime can reach 87 hours a year<\/a> (for a large organisation). Obviously that’s the sum of many outages – anywhere from a few minutes to hours. But at the end of the day, for an organisation this becomes a staggering figure of lost revenue opportunities.<\/span><\/p>\n

Average outage period<\/h2>\n

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And when an outage occurs, it’s a race against time to handle it before it spirals out of control. According to the IT Process Institute, resolution time per outage is around 200 minutes<\/a>.<\/span><\/p>\n

Revenue impact from downtime<\/h2>\n

On average, businesses lose between \u00a365,000 and \u00a383,000<\/a> for every hour of IT system downtime, according to estimates from studies performed by IT industry analyst firms<\/span>. In addition, financial services, telecommunications, manufacturing and energy lead the list of industries with a high rate of revenue loss during IT downtime<\/span>.\u00a0<\/span><\/p>\n

If an outage creates a disruption in a supply chain with a high level of expectation in responsiveness (e.g. medical services or overnight delivery), the business may be exposed to even more damages. Often, damages stem from the inability to deliver (e.g. loss in delivery fees due to arriving late or lawsuits due to collateral damages). These highly publicised situations can impact shareholder value.<\/span><\/p>\n\t\t