If you work in a company, whether you are related or not to the IT department, you have surely heard about “downtime”. It’s a situation that businesses prefer to avoid at all costs because it can significantly affect many areas of the activity. So how does it affect a business?
What is downtime?
The term “downtime” comes from the computer industry and refers to periods when a system is unable to perform its primary function. It means that the IT system could be temporarily unavailable, offline, or not operational. Applications, computers, servers, or a whole network can be affected.
Downtime takes different forms depending on the nature of the business. It could be the malfunctioning of the point-of-sale terminals or telephones of a retail business. In this case, which would be unable to make sales. Another example would be an inoperable portal which would cut off a service provider’s assistance to its customers.
Whether the downtime affects a product-based or a service-based company, downtime affects the business functionality massively. To reduce the risk of downtime, it’s crucial to know its causes.
What are its causes?
Before getting into the causes of downtime, it’s important to specify the two types of downtime. There are planned downtimes and unplanned downtimes.
Planned downtime occurs when the IT department intentionally shuts down the network to perform maintenance or upgrades. These are usually scheduled, hence the name. Performing maintenance and upgrades from time to time ensures optimal network performance over the long term.
On the other hand, unplanned downtime is, as the name suggests, not expected and brings a lot of loss to companies.
Unplanned downtime can be caused by:
- Human error: Downtime can be caused by mistakes done by employees while doing some tasks. These mistakes could be following outdated procedures, unplugging essential hardware, or taking wrong technical shortcuts.
- Understaffed IT Departments: Some companies don’t allow enough resources humanely and financially to keep their system running smoothly. It results in short-staffed IT departments having too many tasks daily and not being able to ensure all the maintenance the system needs on time.
- Hardware and software failure: In the same sense as the previous point, an IT staff could miss out on checking the age of hardware. It’s also valid for software updates. If the hardware and software systems of a company become outdated, they will not be able to support the updates and technological advancements. It will undoubtedly result in downtime due to incompatible changes.
- Security hacks: At MSG Group, we encounter countless businesses who ask for our help after being severely affected by malware or a hacker. Managing to restore data and securing the system is great for the company, but lost costs leave traces that take time to erase.
These are the top major causes. Other reasons such as power outages, natural disasters, or internet shutdown. They depend less on the control of the company.
For the causes that are entirely in the realm of control of the company, the owners must take all actions to prevent these issues. It’s even crucial when we know that downtime can severely affect a company financially.
How much does it cost?
The average loss experienced on an IT downtime depends on various factors. They are related to the company revenue, industry, the number of people affected, and the outage duration.
Gartner estimates the average cost of an IT outage to be 5,600$ per minute. Businesses operate differently depending on many parameters. For that reason, downtime at the low-end scale can be around $140,000 per hour with an average of $300,000 per hour and a high-end scale of $540,000 per hour.
Data Foundry shows some formulas to obtain a ballpark estimate of losses and labor costs per hour of downtime.
A small business can lose between $82,200 and $256,000 for a single incident. Big companies’ losses are way higher and can sometimes severely impact a company’s future. It’s important to prevent any downtime by taking all the precautions possible. One of the top actions to avoid IT downtime is securing the system. As a business owner who understands IT security’s importance, book a free consultation with us.