How Downtime Can Cost Your Business

Downtime is a business killer, and if you’re not careful, it could hold your organization back from both performing optimally and recovering effectively. Downtime can have a considerable impact on your organization, which is why most companies do what they can to prevent it in all forms. Let’s look at some ways you can keep downtime from impacting your bottom line.

The effects that downtime can have on a business are varied, but they are all bad. For your customer relationships, you can expect the following:

• Customer dissatisfaction and displeasure
• Decreased loyalty to your business and brand

Without income from your customers, your business cannot grow or sustain itself. On the other side of the coin, however, you can also expect the following more direct issues related to downtime:

• Cost of recovering, repairing, and/or replacing IT solutions
• Lost or wasted materials
• Compliance and regulatory issues
• Repercussions to your supply chain
• Overtime costs to make up for lost time so deadlines can be met
• Decreased employee morale and increased stress
• Lost internal productivity and the costs of still reimbursing your employees

How Do You Calculate Downtime?

Calculating downtime is a bit complex, as it requires you to have a solid understanding of each of your employees and the amount they use your company technology throughout the day. This helps you estimate the loss related to an outage. You then multiply the number of hours wasted by each of the employees’ salaries on an hourly basis. If your employees all have variable pay scales (and they do), you can expect this process to be tricky, but you can make it easier by simply using the same numbers in the equation for employees that have the same salary or the same percentages of utilization. This should give you the total productivity lost per hour for your organization.

Calculating recovery costs and intangible costs, like those associated with your falling reputation, is easier. If you combine all of the costs detailed above, you should be able to calculate your total hourly cost of the downtime-causing incident.

We guarantee that this number will be a shock, but it should also serve as a reminder that your business is not infallible, and that even something as simple as lost productivity can be enough to cost your company considerably.

BNMC wants to help your business keep downtime to a minimum with our proactive technology solutions and preventative maintenance. To learn more, reach out to us at (978) 482-2020.