Cost of downtime better understood, study shows

Research into the cost and implications of IT downtime points to a positive shift in understanding among businesses. The research, conducted by Databarracks, suggests that organisations are getting better at understanding what IT downtime costs their business, as just 19% of respondents to the firm’s Data Health Check survey said they were unaware of the costs, down from 35% in 2017.

Managing director of Databarracks, Peter Groucutt said the results show that companies are thinking much more broadly about the financial impact of IT-related downtime.

“The obvious costs are well known to a business. They include staff wages, lost revenue or any costs tied to fixing an outage. It is important, however, to look beyond these for a more holistic view of the impact an outage will have financially. ‘Hidden’ or intangible costs, such as damage to reputation, can often outweigh the more obvious, immediate costs – further research from our Data Health Check study revealed reputational damage is the second biggest worry for organisations during a disaster, behind only revenue loss.

“The problem with these intangible costs is they aren’t easy to estimate, and because they often take time to materialise, they can be excluded from calculations. It will always be difficult to secure budget for IT resilience if you can’t show the board a clear picture of the impact downtime will have. Presenting a complete downtime cost immediately puts the cost of investment into context and will help IT departments make the improvements they need. It’s encouraging to see organisations thinking more holistically and factoring these previously ignored costs into their budgeting.”

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