Quantifying Productivity Lost Due to Unplanned Downtime

Now that IT services have become part of a parcel of organizational productivity – a large driver of the cost of downtime is the productivity lost by the workers who cannot effectively function while their business systems are unavailable. A great example of this is when email stops functioning, or a CRM system goes down. Employee productivity is significantly impacted – often with significant organizational cost. As the number of employees dependent on an IT service grows, the dollar figures involved in the productivity loss calculations can quickly become surprisingly large.

There are a number of calculators online that can help with the productivity part of the equation. A simple calculation can be performed leading to a back of the envelope calculation of the productivity lost due to unplanned downtime. Key factors include

• number of employees affected
• the direct cost to the organization of those employees time
• the length of a typical downtime incident
• the percentage of their productivity lost due to the incident

The most difficult part of this calculation is calculating the percentage of productivity lost due to the downtime of the IT service. If you are lucky – the organization has already calculated an assumption as part of disaster recovery planning – and you can simply take a number that already has internal credibility.

If the heavy lifting has not been done for you – there are three great techniques. With all of them – what you really want is a sense of a range of reasonable values – this provides more value than trying to be exact.

1. The “walk around” survey – best effort guess based on conversations with potentially affected employees
2. The formal survey – a best effort guess informed by user feedback through a formal survey mechanism. To learn more about formal employee survey techniques, check out the Employee and Customer Survey Research Blog or the Qualtrics About Surveys blog.
3. The analyst based benchmark – you organization likely has contracts with market analyst firms – they often maintain useful benchmarks for assumptions in this area. The advantage of this approach is that executives love to hear numbers generated by analyst groups – regardless of the likelihood that the data is more “correct” – it comes with credibility.

As an IT operations professional, you may not have access to all these figures. Ask your finance team partner or business analyst – often they like nothing more than improving the financial rigor non-finance team members can bring to their business analysis questions.

Note: This blog entry is one in a series looking at quantifying the cost of downtime.

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