Improving uptime is a priority for businesses today. One that they are pursuing by building robust infrastructure (through heavy investments) that ensures their services, programs and/ or websites are constantly available for their customers.
Evaluating the cost of downtime
It is common for many IT companies to face downtime issues that, in turn, affect network quality and critical business applications. A sudden network or program failure can have a devastating effect on business continuity and lead to very large losses.
The average cost of downtime depends on many factors. For instance, a company's turnover, the industry in which it operates, how long was the downtime or interruption for, the exact time of the day and so on. For example, your loss could be significantly higher per hour if your business involves high-level data transactions such as in banks or online retail. You could face serious harmful effects if you experience a sudden interruption during peak online traffic.
Due to the many factors that affect different companies differently, the price of downtime also varies.
The effect of downtime
Downtime can affect your business financially in several ways. Five of the most important ones are:
- Lost opportunities
Most business concepts include online transactions such as purchases or electronic money transfer of through a network. This means every time you experience downtime on your network, your sales are only partially complete or not at all. In the event of prolonged downtime, your customers may want to contact other vendors who can immediately meet their needs. To make matters worse, they may never return to you - Decrease in employee productivity
Employees, and sometimes third parties, also need programs and/ or websites to run continuously in order to perform tasks critical to the company. When your network is down, it can prevent these tasks from getting carried out and have an adverse contagious effect on labor productivity. When employees are unable to work efficiently, the organization cannot achieve value from an expense. The wage cost per working hours during downtime is a significant expense - Damaged brand reputation
Your unpreparedness to offer desired services, enable hassle-free transactions and deliver satisfaction/ delight can frustrate your customers. With social media’s increasing access and use, customers can now quickly spread the (negative) word about your downtime through their posts on public platforms, resulting in negative publicity for you - More time to redo the work
Usually, downtime tends to result in data loss, incomplete task solution(s) and/ or improperly serviced customers. It may take a business a considerably long time to recover and return to normal. The extra time required to achieve pre-downtime status quo is also an additional cost. - Demotivated employees
When services are interrupted, not only are customers affected but employees (of a business) too grapple with increasing frustration levels while working on rectifying things. The mental dissonance is exacerbated when they must deal with dissatisfied/ irate customers, especially in cases where try as they might, things don’t go back to normal leading to them getting demotivated. A key consequence of discouraged employees may be their impaired productivity and efficiency.
What should you do?
Downtime costs can be crippling and risky for any business. If your network/ application does not work properly and starts affecting the efficiency of your routine business operations and/ or your revenue, then this non-performance is considered an actual downtime expense.
Waiting till you experience downtime in real-time and then correcting the resultant losses can be counterintuitive. Instead, implementing a few simple preventive measures can go a long way in arresting the damage. For starters, you can create a strategic plan that prioritizes the services that need to be handled quickly, have backup plans ready and/ or perform tests on a regular basis to always be prepared for downtime. Doing so can help your business save costs, improve brand reputation, enhance customer loyalty and increase employee satisfaction.
Want to learn more about how to avoid downtime? Write to us at us-marketing@columbusglobal.com today!