March 13, 2023

Calculate your companies downtime cost

Calculate your companies downtime cost

Although technology has become an integral part of mainstream culture and businesses, operational hazards are still inevitable. As more and more businesses integrate technology into their systems and daily operations, hazards such as “downtime” are increasingly dangerous to organisations; especially as they scale-up.

However, as with many IT risks, most organisations do not take downtime into consideration until an incident occurs, it becomes a rush to amend and get back online. 

Downtime can occur for numerous unexpected reasons such as cyber attacks, human error, natural disasters, hardware or software failures. As a result, there are higher risk industries such as banking and financial services, government and healthcare due to an increase in cyber attacks over sensitive consumer data. 

These outages can also be anticipated and planned in advance on low traffic periods for updates, testing and migrations. 

However, IT outages of the unexpected nature are often expensive. Recently Uptime Institute’s 2022 Outage Analysis Report discovered downtime costs are continually increasing since the average $9,000 per minute in 2015:

  • Over 60% of outages cost more than $100,000, an increase from 39% in 2019.
  • 15% of outages cost more than $1 million, an increase from 11% in 2019.

Beyond financial risks, downtime is harmful for indirect monetary reasons. It can damage brand reliability. Principal consultant at Empathy Software, Nick Tune explains “the system needs to be highly reliable because even just a little downtime can alienate loyal customers”; this extends to customer trust as well. Additionally, if the systems are frequently experiencing outages this can reduce employee productivity, satisfaction and thus retention. 

There are many mitigating factors to reduce the risks and effects of downtime such as experienced site reliability engineers and good business cultures. Business cultures that emphasise best communication and learning practices are often the organisations that experience the least downtime disruption. 

As 50% of IT operators become stressed and panicked, it can become easy to create (even unintentionally) an organisational culture of fault and criticism. However, communication processes and policies that seek to place blame instead of implementing positive learning experiences and empathy for human error, causes a culture of poor team morale, confusion and in turn more errors. Therefore, instead of downtime post-mortems that focus on individual error, organisations should build technical resilience, visibility and adaptability to the data discovered in these processes. 

For example, one company that specialises in downtime incidents (Uptime Labs) provides incident discovery reports that are individually tailored to each customer’s incidents. This is in addition to a gamified training platform to upskill engineers' incident management responses. In turn, this creates a positive culture where engineers are enabled and encouraged to improve. 

Additionally, as there is currently a skills gap in the market for technical roles, such as site reliability engineers who specialise in downtime, WeShape provides training and coaching to up-skill permanent engineers to be prepared for the next downtime incident.

To begin your organisation's journey to reducing your downtime risks, complete the questions below to calculate your downtime expenses.

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About the Author
Charlotte Hamilton
Charlotte Hamilton

Charlotte is the social media assistant at WeShape. She has a 2:1 BA in English Literature and enjoys reading and writing in her free time. The Life at WeShape blogs are a fun way to get to know us once a month!

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