Top Questions About the Cost of Downtime
Posted December 5th, 2007 by Jonah ParanskyTo kick off a series on quantifying the cost of downtime, we begin by providing a primer style overview of the different components involved in measuring the cost of downtime.
As companies have begun to rely upon IT services more heavily, the expectation of 24×7 availability and 100% uptime continues to grow. At the same time, qualitative statements such as “my users need the IT business application available 24×7” simply aren’t enough to drive the organizational investment that improving uptime demands.
These are the top questions we hear about the cost of downtime:
What numbers should I use?
This is by no means a new task, with organizations struggling for years to assign dollar values to the cost of support, the cost of data leakage, and the cost associated with being compromised through a security incident. Often vendors (and at StackSafe we are no exception to this trend) search for general measures of downtime cost – to provide a general ROI for their solutions.
While understanding industry average figures is important, quantifying the cost of downtime is much more powerful when the numbers generated are specific to the organization and to the end-to-end IT business services in question.
How do I quantify the Cost of Downtime?
Four key components help with quantifying the cost of downtime incidents. They are ordered by difficulty for the typical IT operations team.
- IT Staff Hours lost
- Revenue lost
- Productivity lost
- Quantifying reputation damage
After you have managed to quantify the cost of a typical downtime incident – the next task is to annualize that number – into an Annual Cost of Unplanned Downtime
I have quantified the cost of Downtime – now what?
Understanding the cost of downtime is only the first step in a long path to improved availability and resiliency of the IT services your team delivers. Next up on the agenda is understanding the causes of downtime – so you can drive organizational improvement using the resources justified by your in depth cost analysis. As you can imagine – this will be an area of focus for us in future blog posts.
Resources:
Some digging around on the internet found a variety of calculators and equation models that target IT operations teams attempting to calculate their own cost of downtime. A small number of these are profiled below.:
- Syan, a UK server specialist organization has a handy dandy calculator to help organizations get a simply calculation of downtime – specific to their environment.
- Other calculators include this one from Sudora, and this excel version from Classic Blue.
- NASI (North American Systems International) also has an equation to help calculate downtime costs.
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Filed Under: Downtime, IT Operations
December 7th, 2007 at 11:04 am
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December 11th, 2007 at 6:58 pm
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December 26th, 2007 at 4:32 pm
[...] are a number of calculators online that can help with the productivity part of the equation. A simple calculation can be performed [...]
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[...] you have managed to quantify the cost of a typical downtime incident, the next task is to annualize that number into an annual cost of unplanned [...]
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February 15th, 2008 at 1:03 pm
[...] If we evaluated it in the same way we would evaluate any other IT service or business application, we would look to evaluate the top questions about the cost of downtime. [...]
July 25th, 2008 at 12:40 pm
[...] that light, a look at the costs of downtime is important. As Jonah Paransky has discussed in a previous post, it helps to look at the following four factors as a [...]