When your IT goes down, it isn’t just annoying – it costs you money. That’s why it’s so important you have experts managing your information technology. But, when your critical systems are not working, do you know how that really costs your business each hour?
Calculating the Costs of IT Issues
IT downtime is one of the most common, and ultimately most expensive, issues business owners and employees face. While your business’ downtime may not be so expensive upfront, repeatedly losing productivity because your systems are down adds up over time. How can you calculate the cost of IT downtime to your business?
Use the following two formulas to calculate productivity and revenue loss associated with your IT being down:
Productivity cost = E x A x C x H
E = number of employees affected
A = percentage of employees affected
C = average cost of employees per hour
H = number of downtime hours
Revenue loss = (GR/TH) x I x H
GR = gross annual revenue
TH = total annual business hours
I = percentage of Impact on the business or individual employee
H = hours of downtime
The resulting cost per hour will vary depending on your industry and size, of course. In their 2016 downtime report, the Ponemon Institute found the average cost of unplanned downtime to be $740,357. It’s only increased since then – and goes up every year.
The Unseen Cost of Downtime
But to truly calculate the costs of IT downtime, you must take into account a number of other expenses, including:
- Costs to your reputation when you can’t respond to clients’ requests via phone or internet
- Costs to remediate your systems, especially if the downtime is a result of a disaster or cyberattack (remediation can cost up to $200 per hour for some IT specialists)
- Costs to implement information technology solutions to prevent further downtime
- Costs of lost data – and the expense of time and money to recreate it
- Costs related to any fines if you are in a regulated industry
There’s no equation to measure all the costs.
Reducing (And Possibly Eliminating) Cost of Downtime
In fact, some costs are simply unknowable. For instance, you’ll never know if you missed out on a customer because your phones were down.
Being aware of how costly downtime truly is helps you quantify the amount of risk you are willing to take when deciding the best possible IT solution for your business, whether that’s a break-fix model or an expert managed IT services provider.
There’s one sure way to reduce and, with any luck, eliminate the costs of downtime for your business: partnering with an experienced managed service provider with expert IT personnel and 24-hour support. Consider this: even if your productivity is enhanced only by 10 percent, what would that increase mean in terms of profit and achieving your business goals?
Profit By Partnering With A Microsoft Partner
We’ve found that many business owners aren’t even aware of half of the benefits new IT solutions offer.
Any MSP that values your relationship will not only keep your systems up (and quickly get them back online when they go down) but also help you make the most of your uptime by ensuring you and your employees are aware of the productivity-enhancing features of many solutions commonly deployed by small- and medium-sized businesses.
Indeed, paying for but not using all the features of IT solutions is a hidden cost – not of downtime, but of having poor technology utilization.
How Applied Tech Can Help
Fortunately, Applied Tech can help you avoid the costs of downtime and take advantage of the productivity-enhancing features of your IT solutions.
If you need help – whether it’s replacing your internal IT department or current IT provider, providing your business with outsourced IT management for the first time or another IT-related matter – Applied Tech is here for you. Our managed service program offers custom solutions to businesses throughout Wisconsin regardless of industry to help minimize downtime, streamline support and give companies the peace of mind they need to get back to business.
Contact Applied Tech or at 608.729.1300 today to learn how we can support your business’ IT.
