Did you know that IT downtimes can cost your business anywhere between $5,000 - $83,000 per minute?
That is exactly what the results of a survey by ITIC revealed in 2016, where 81% of respondent businesses said one hour of downtime cost them over $300,000, and 33% of the organizations stated an hour of service outage cost them anywhere between $1 million and $5 million.
Despite the unprecedented growth in technology, downtimes remain an expected risk of doing business. Mitigating that risk can ultimately decide the survival of your business. How much do you lose if you don’t have the right technology in place to monitor and restore your service right away?
Calculating the True Cost of a Service Outage
The true cost of service outages can be calculated by adding your labor costs and revenue lost associated with IT downtime. Two simple formulas to calculate them are as follows:
- Labor Cost / Hour = (# of Affected Employees) x (Average Employee Cost / Hour) x (# of Outage Hours) x (Average Revenue / Employee / Hour)
- Lost Revenue / Year = (Gross Revenue / Year) x (Total Business Hours Lost / Year) x (# of Outage Hours) x (# of Customers Affected) x (Average Revenue / Customer)
Recent events where Amazon lost $150 million in March 2017 and Jet Airways suffered $102 million in lost revenue in June 2017 due to service outages back up these staggering numbers. Can your business sustain such a hit?
The Other (Hidden) Costs of Service Outages
Using the formulas above, you might be able to put a dollar value to your temporary monetary loss. But, the hit your reputation and brand suffers may be irreplaceable. Especially if you’re a small or medium-sized company that doesn’t have millions to spend on PR stunts. Think about it.
- If you’re in Finance, and a customer faces a hassle processing payment, how likely are they to return the second time?
- If you’re into Manufacturing, and you miss a delivery date, how likely are your retailers to reorder?
- If you’re in Customer Support and miss solving a user problem deadline, will they stay or will they go?
Irrespective of your vertical, you cannot afford a service outage. What price do you put on your reputation?
How to Deal with Service Outages
Outages and downtime are a hassle that no company wants to deal with, yet they are a reality. Opting for a break-fix methodology for IT operations management (ITOM) is akin to opting for a band-aid to treat a broken leg. Having disjointed ITOM and IT service management (ITSM) processes don’t make much sense either.
Automation tools like ServiceNow, and Managed Service Providers (MSPs) like ProV, work together to give you benefits like:
- Increasing visibility, availability, and agility
- 360-degree view dashboard
- Patented CMDB with SLA integration
- Event management with performance analytics
- Regular service health check-ups
- Critical issue identification and notification
- Discovery, Mapping, and Orchestration
- Incident Management
- Auto assign issue to handler
- Real-time chat
We combine ITOM and ITSM best practices to detect problems before they occur and drastically reduce your downtime. Download our FREE whitepaper below to discover the real impacts that service outages have on your business to learn how to derive more ROI from IT while providing your customers seamless service delivery. For anything else, drop a comment below or contact us today.