Calculate What an Hour of Downtime Costs Your Business
We’ve all experienced the dreaded IT failure at the office when all of a sudden work stops or is interrupted, typically because you can’t access something you need – a file, email, the internet, a software program, or otherwise.
Soon enough the same questions begin to filter through the office…
“Is your wifi down?”
“Can you access the server?”
“Is your Windows working?
“Can you open [insert your software program]?”
These incidents seem like part and parcel of office life, and often just frustrating inconveniences, but what are they costing your business?
When you consider most SMEs operate with an office of 10 – 200 employees who generally depend on work files or resources to undertake billable work, it’s not hard to see the how these can periods can stack up in costs for a business.
It’s these unplanned work stoppages we IT folk refer to as downtime, moments when employees can’t access a system entirely or the system is accessible but limited in functionality and performance.
Downtime is usually caused by human error when operating certain technology, poor internet connections, dated hardware, and network failures, but can also result from weather issues, bugs, and increasingly cybercrime and hacking. Essentially, it results in a full or partial halt in business productivity and functionality.
Average downtime has been reported to last an average of 90 minutes. When you consider the labour cost and loss of billable work over this period for a workplace of 10- 200 staff the cost warrants attention.
How can you calculate the cost of downtime for your business?
Start by simply considering the technology your business relies on to operate on the day-to-day. For instance:
- Business applications used for daily operational processes
- Email platforms
- Internet
- Intranet tools
- Automated processes
- Key servers, LANs and WANs
- Technology hardware
How would 60 minutes of inactivity across one or more of these platforms for all your employees affect the operations in your business?
A simple estimate of the average cost of downtime for your business can be calculated using the following:
Estimated Average Cost of 1 Hour of Downtime = Employee Costs per Hour x Fraction Employees Affected by Outage + Average Revenue per Hour x Fraction Revenue Affected by Outage
Minimising downtime through technology is something Royal IT are very passionate about, particularly for small businesses of up to around 200 staff (our specialty). We see firsthand the incredible effect intelligent and up-to-date IT systems can have on a business, not just around minimising downtime and enabling disaster recovery, but facilitating increased efficiency for staff across the board.