How much does 1 hour of downtime cost?
Updating business communications technology can be costly. Because of this, there is no surprise that organizations may skimp out upgrading or replacing outdated technology.
Tech spending trends are showing us that tech purchases are 37% additions, 32% upgrades, and 31% replacing existing technologies. This sounds great until you see that 40% of these purchases are driven by “internal events”. Internal events typically mean some sort of failure of equipment or a process that needs to be supported by tech.
However the cost of obsolete technology, or faulty technology incurs hefty hidden costs.
Businesses that depend on high-level transactions such as banks, and online-retail stores rely heavily on the uptime of tech. Another example may be enterprises that rely on teams to collaborate in the real-time, solving problems while big projects backed by heavy investment require mass collaboration.
So how much does 1 hour of downtime cost these organizations?
According to a study conducted by ITIC that measures downtime costs, a single hour of downtime costs over $100,000 for 98% of organizations, 81% of respondents reported that one hour costs their business over $300,000, and 33% of enterprises lost $1-5 million in one hour of downtime.
Costs are found by calculating the true cost to operate, plus revenue lost per hour. By factoring in revenue, number of employees, annual benefits, number of hours worked per week, and the percentage of workers who would be directly affected by the outage.
Revenue can be calculated by finding out revenue made each day, and the percentage of revenue an outage would affect.
More factors of costs can be considered, such as time needed to restore hardware or applications, and if your company is dealing with data, how much data can your company afford to lose.
You aren’t only losing out on dollars…
Bad experiences can chip away at revenue in the long term, especially if a bad experience is repeated. This also ties into creating value, when a customer relies on businesses for convenience, absence of that value will cause them to search for business elsewhere.
When it comes to outdated technology, it has the same negative effects on business. A survey from 2016 found that business in the U.S lose up to $1.8 billion a year in wasted productivity because of obsolete technology.
It’s clear that identifying issues with tech in a proactive manner can save lost revenue, reputation and time for companies. But are companies willing to make the upfront investment? It’s risky during this time for organizations that are holding off while the competition makes strategic investments in flexible enterprise wide solutions.
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