Modern businesses rely on data and IT systems to run smoothly. For instance, you need cloud-based business apps to control and monitor various business functions, and you need internet access to connect to these apps. If your IT systems break down, your company can incur eye-watering costs from downtime. Let's look at how badly network downtime can affect your business.
If your IT systems break down, your company can incur eye-watering costs from downtime.
Labor, equipment, and seat costs
When your network is down, employees can't access the information they need to do their jobs. You'll end up paying at least three unproductive operating costs, namely employee salaries, PC amortizations, and the cost of idle seats. And when your staff can't serve customers, those customers would have to suffer long wait times, become frustrated, and leave you for your competitors.
Lost sales and opportunities
Network downtime can also mean lost sales and business opportunities. For example, if you run an online store, a website outage will keep customers from purchasing your wares. In addition, potential customers may not be able to learn about your company or products when your website is down. They might even suspect that your business is bogus or has flopped, so they may never consider your business ever again.
Whether your company experiences downtime due to faulty network configurations or external actors like ransomware attackers, people will think that your business is unreliable and therefore not worth their time. Worse, they might assume your network security issues could affect their devices and avoid you like the plague.
How can businesses calculate revenue loss caused by downtime?
Here's a simplified way to calculate how much revenue your business lost due to network downtime:
- Divide gross annual revenue by 2,080 hours to derive your hourly average. Let’s say your gross revenue is $2,080,000. Your company's average hourly revenue is $1,000.
- Multiply your average hourly revenue by the number of downtime hours to determine how much you expected to earn during that time if your network functioned normally. In our illustration, that's $8,000 in an eight-hour workday.
- Multiply your expected earnings by the percentage of your company affected by downtime. If 20% of your business ceases operations due to downtime, then your company lost $1,600 in revenue.
Extraneous costs: Incident response costs, post-incident review costs, and compliance penalties
Network downtime hinders your business's revenue-generating potential, but the financial damage doesn’t stop there. Downtime events, especially those caused by cyberthreats, will have you spending more money on thwarting cybercriminals, recovering data, auditing your IT systems, and paying penalties for each data regulation violated.
Can network downtime be avoided?
Network downtime is no picnic. In fact, among small companies that suffer cyberattacks, 60% fail to recover and shut down within six months. Fortunately, you can avoid network downtime by partnering with a top-notch managed services provider like Healthy IT because we offer the following services:
Our IT specialists will continuously optimize and proactively maintain your network to ensure peak performance.
Losing access to company data will no longer cause downtime, thanks to backups that can replace your primary copy.
A host of cybersecurity solutions and 24/7 monitoring will prevent external threats such as ransomware from causing downtime.
By having Healthy IT as your technology partner, you'll never worry about network downtime ever again. Leave us a message today to learn more about what we can do for your business.