Did you know that IT downtimes can cost your business anywhere between 5,000 and 83,000 USD per minute?
That is exactly what the results of a survey by ITIC revealed in 2016, when 81% of respondent businesses indicated that one hour of downtime cost them over $300,000, and 33% of the organizations stated that an hour of service outage cost them anywhere between 1 million and 5 million USD.
Despite the unprecedented growth of technology, downtimes remain an expected risk of doing business. Mitigating that risk can ultimately decide the survival of your business. How much would you lose if you didn’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 loss associated with IT downtime. The formulas to calculate these two things are:
- 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)
Amazon lost $150 million in March 2017 and Jet Airways suffered $102 million in lost revenue in June 2017 due to service outages. Could your business absorb such a large 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 immeasurable. Especially if you’re a small or medium-sized company that doesn’t have millions to spend on PR.
- If you’re in Finance, and a customer has a payment processing problem, how likely are they to return the second time?
- If you’re in 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's problem by the deadline, will they stay or will they go?
Irrespective of your industry, you cannot afford a service outage. What price would 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 a 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.
- A 360-degree view dashboard.
- A 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 issues to handlers.
- Real-time chats.
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 and to learn how to derive more ROI from IT while providing your customers with seamless service delivery. For anything else, drop a comment below or contact us today.