Downtime can result in costly losses – both monetarily and in terms of your reputation and customer loyalty. Customers expect you to be accessible and they really don’t care if your server is down, the power is out, or someone is out sick. Today’s tech-driven businesses rely heavily on their IT infrastructure to maintain smooth operations and deliver products and services efficiently. However, humans are not infallible and IT systems are not foolproof. Downtime – whether due to system failures, cyberattacks, or other disruptions – can have devastating financial and operational impacts on any business.
TechRepublic reports that the biggest cause of downtime is caused by human error: employees clicking links they shouldn’t. The second most common reason for downtime is a result of IT setting misconfigurations. Software failure is the third leading cause.
The Cost of Downtime
Downtime affects businesses of all sizes across various industries, and managers may not even realize that hidden costs have been incurred. Splunk recently reported that, for larger companies, “added downtime results in an average annual revenue loss of $49 million, $22 million in regulatory fines, and $16 million in missed SLA penalties.”
Here are some of the costs your business will inevitably face from periods of downtime:
Lost Revenue
When your IT systems are down and operations halt for any given reason, revenue is the first way in which a company is damaged. And for an ecommerce business, every minute of downtime can mean lost sales. But traditional businesses, as well, face lost productivity and delays in service delivery, leading to reduced revenue. SolarWinds estimates:
[The] average cost of downtime per minute for small businesses is $427 and $9,000 for larger enterprises. If you think of this cost per minute from an hourly perspective, a single hour of downtime costs small businesses roughly $25,620 and over half a million ($540,000) for enterprises.
Productivity Losses
Employees rely on IT systems to efficiently achieve their tasks; when these systems are unavailable, productivity drops. This lost productivity can extend beyond the immediate downtime period, as employees endeavor to catch up on backlogs and deal with the aftermath. Government agencies responsible for meeting the needs of their constituents often suffer considerable backlash.
Reputational Damage
Frequent or prolonged downtime can erode customer trust and damage a company’s reputation. In an age when online reviews and social media can significantly impact a business, maintaining uptime is crucial for sustaining customer confidence and brand integrity. According to MSSP Alert:
Downtime can dilute customer loyalty and damage public perception. 41% of tech executives in the report admit customers are often or always the first to detect downtime. In addition, 40% of CMOs reveal that downtime impacts customer lifetime value, and another 40% say it damages reseller and/or partner relationships.
Legal Fees and Compliance
For businesses that handle sensitive data, downtime can lead to cracks in the system that result in non-compliance. And should a data breach be the cause of the downtime, the business can face expensive lawsuits and settlements.
Recovery Costs
After a downtime incident, businesses often sustain significant costs to restore systems and data. This can include overtime pay for IT staff, costs of external recovery services, and investments in new hardware or software to prevent future occurrences.
The Importance of Having a Managed IT Partner
Given the high costs associated with downtime, proactive measures are essential. This is where a managed IT partner comes into play. Managed service providers (MSPs) offer a range of services designed to ensure that IT systems run smoothly and efficiently, minimizing the risk and impact of downtime. These services include:
Proactive Monitoring and Maintenance
Your MSP should monitor your IT systems 24/7/365, identifying and resolving issues before they cause significant problems. Your MSP should also provide ongoing maintenance and ensure that updates and patches are installed regularly, so that your infrastructure remains secure and performs optimally.
Rapid Response and Remediation
In the event of a system failure or cyberattack, your MSP can provide a quick response and resolution. Their expertise and resources give them the ability to reduce or eliminate downtime and associated costs.
Scalability and Flexibility
As your business grows, your IT needs will evolve. Your MSP offers scalable solutions that can adapt to changing demands, ensuring that your IT infrastructure supports your growth without interruption.
Comprehensive Cybersecurity
Cybersecurity threats are a significant cause of downtime. Your MSP can implement robust security measures – including firewalls, antivirus software, and intrusion detection systems – to protect your systems from attacks. They can also provide regular security assessments, including penetration testing to identify and address potential vulnerabilities before they impact your business.
Cost Predictability
Working with a managed service provider allows your business to benefit from more predictable IT costs that allow you to more practically plan for growth. Instead of incurring unexpected expenses associated with emergency fixes and downtime recovery, businesses can pay a fixed monthly fee, making budgeting easier and more predictable.
Disaster Recovery and Business Continuity Planning
Most company executives operate under the assumption that their backups will protect them and their business operations. Only when they experience a significant outage and their customers are left stranded do they discover the true risk of not having a disaster recovery and business continuity plan. Because of the time it takes to access and re-install files on new or repaired hardware, the only way to ensure continuous service to your customers is by having a hardware-independent restore.
We recommend that every company develop an emergency preparedness plan. Preparing for disaster helps reduce or eliminate downtime by ensuring that you are able to provide uninterrupted service to your clients. During a disaster, significant repairing and reconfiguring may be required. That’s going to turn into lost revenue and missed opportunities unless you have a hardware-independent restore option. Your MSP will help develop and implement disaster recovery and business continuity plans. These plans ensure that, in the event of a catastrophic failure, your business can quickly recover and resume operations with minimal disruption – even if you can’t access your building because of a natural disaster.
To learn more about how our team can help you reduce or eliminate downtime, get in touch.
