Technology is so prevalent in business nowadays that it’s easy to take it for granted. But no matter how smooth-running your business is, life happens. From a hurricane or a labor dispute to an act of terror, a disaster that affects your IT network can quickly put a halt to your operations, costing you dearly in a variety of ways.
So what’s at stake when your infrastructure goes down? Here are just a few of the direct and indirect costs to take into account.
Some costs resulting from downtime can be associated with an actual dollar value. One survey of 400 North American firms found that every incident of downtime cost an average of $1 million. In 2016, the average cost of downtime per minute was $16,246. As technology continues to evolve and grow more complex, these costs are rising rapidly. They include:
- Lost sales and revenue
- Systems restoration and data recovery
- Employee overtime costs
- Business opportunity costs
- Employee overtime and/or temporary worker costs
- Contract and penalty costs related to Service Level Agreements (SLAs)
There’s more to consider than just monetary costs. Some downtime-related costs are much harder to measure — but can be just as damaging to your bottom line. These include:
- Delayed business development and projects
- Customer frustration and loss of loyalty
- Damage to your brand and reputation
- Decreased employee morale and turnover due to stress
- Supply chain disruption
At the end of the day, your primary goal is staying competitive. Part of being a leader in your market space is maintaining a strong organization — no matter what unexpected curveballs come your way. Your ability to stay up and running following a disaster is a great way to demonstrate your business fortitude.
How can you soften the blow of a disaster?
If technology is essential to running your business, reducing downtime should be high on your priority list. This is where business continuity planning can help.
A business continuity plan includes a documented set of strategies for maintaining or quickly resuming mission-critical business functions in the event of a crisis. It covers everything from recovering lost data to determining how employees stay connected and productive during an outage.
Developing a sound disaster recovery and business continuity strategy before trouble arises can save you thousands of dollars in quantifiable costs. It can also help you preserve those intangible — but perhaps even more important — business assets such as your brand reputation and the loyalty of your employees and customers.