Why measuring the cost of downtime is important for your organization

Published: Thursday, 01 October 2020 07:33

Almost a quarter of organisations are still unable to determine what IT downtime costs their business. This is according to new research conducted by Databarracks.

Data taken from its annual Data Health Check survey has revealed almost one in four organizations (23 percent) are not able to accurately report the financial impact of IT-related downtime on their organization. Given the unprecedented disruption caused by COVID-19, Peter Groucutt, managing director of Databarracks, states it is critical businesses make every effort to think more broadly about the financial impact of IT downtime.

“Being able to recognise and attribute costs related to IT downtime, helps organizations to make better-informed decisions on IT resilience, supplier management and continuity planning, which is particularly pertinent in the current climate,” said Mr. Groucutt.

The Databarracks survey also showed almost one in five (18 percent) organizations stated that as little as one hour of IT-related downtime can cost over £50,000.

Groucutt continues, “Businesses can’t afford unplanned downtime. As organizations have migrated en masse to remote working, people have become accustomed to having access to data and systems from wherever they work. But when those systems are no longer available it not only means staff aren’t able to do their jobs, it also comes with a severe financial cost to the business.

“Costs relating to staffing, lost revenue and the financial outlay needed to fix an outage will be known, but it’s important businesses go further. For example, how do you determine the financial impact to customer perception if a vital application goes offline for more than 24hrs? These are more difficult to estimate but can have an even bigger overall impact.

“Hidden costs often take longer to materialise, meaning they can be excluded when estimating the cost of downtime. It’s critical organizations do not ignore them. At a time when any outgoings will inevitably be scrutinised, it will be difficult to secure budget for IT resilience if you can’t clearly show the impact of downtime. Presenting a complete downtime cost immediately gives perspective to any expenditure, which will help you gain the resources needed to make improvements.”

More details about the Data Health Check survey.