August 2014


Estimating Downtime Costs at a Global Company



While the total cost for planned and unplanned downtime is significant, it is still significantly lower than the Aberdeen survey result. One reason is that we chose a relatively small business as our example. But the bigger reason is that these tangible costs represent only a fraction of the total financial impact downtime has on a business. There are other costs.


To gain a firm understanding of the total mpact of downtime, we must examine a few other subcomponents of downtime costs. These include regulatory, compliance and remedial impacts and loss of customer goodwill. (See “How Much Does Downtime Really Cost?” Full article available online, from which a few points are highlighted below.)


Regulatory and Contract Compliance Impact


Downtime can cause:

·      Failure to comply with required government regulations

·      Failure to fulfill contractual Service Level Agreements (SLA)

·      Substantial penalties for non-compliance or non-performance

Remedial Impact


After a downtime event:


·      Regular employee may have to work overtime to recover lost data and convert papre transactions

·      Additional temporary staff may be necessary to help expedite recovery

·      A special marketing effort may be necessary to redeem damaged customer satisfaction

Customer Goodwill


Downtime can lead to:


·      Missed deadlines

·      Unsatisfied customers or prospective customers

·      Lost confidence and damaged reputation

Total Impact


After all of these downtime cost subcomponents are analyzed:

·      Add them up to a total hourly downtime cost

·      Multiply the hourly total by estimated annual hours of downtime

·      Derive the real financial impact of downtime on business

Upshot: System Downtime and Business Downtime are NOT  Synonomous


While system downtime is inevitable, business downtime does not have to be. Available technologies can keep a business functioning even when individual hardware or software component become unavailable. For example, a high availability (HA) solution can provide ready access to real-time replicas of critical systems and data, at a remote loation. When a system becomes unavailable due to maintenance or an unexpected event, users can be switched to the alternate system image and data, eliminating the failure effects upon the business. Currently, HA technologies are mature, robust, and widely available.


Loxoll offers an excellent hardware-based IT SAN HA solution. Call us if you need assistance or additional information.


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