How much is IT “Downtime” Really Costing your Small Business?

By Goldie Slobodsky

Treatment without prevention is simply unsustainable – Bill Gates

Downtime is defined as the time of reduced activity or inactivity.

The state of “downtime” can either be self-inflicted or circumstantial. Self-inflicted is that which one has full control over and circumstantial is that which is forced on us externally. The issue is that even circumstantial interruptions tend to have a self-inflicting component. Take for example, an office scenario. People have a natural need to be accepted and as a result entertain a number of useless conversations with people around us. Not out of interest, but simply to be polite. Although, a conversation with a coworker may be circumstantial, our inability to politely decline in participation for it is the self-inflicting component. As managers and business owners, we work on preventative solutions so as to limit such states of inactivity. Of course some solutions work better than others, but those that don’t tend to be brushed off as ‘cost of doing business’.

The problem here is when you pair up self-inflicted downtime, with circumstantial self-inflicted downtime and then add technological delays or inefficiencies to that. This is where you can incur almost a full day of “inactivity”. In fact, a research study done on interruptions in the financial services industry, by Edward G. Brown, reported that interruptions can take up to 238 minutes a day, additional 84 minutes to restart tasks, and 50 minutes on top of that due to the stress and fatigue associated with momentum loss. That’s 31 hours a week – almost a whole person, in productive time lost.

In the case of computer network downtime: Whether your people can’t access email, experience a loading delay/crash in business critical software or incur a number of other nagging network failures. Although seemingly minor, these issues add up and contribute greatly to the productivity of your people. You might say “No big deal, plenty to do. Work on something else and get back to your intended task when you can. Can’t send email; Software loading problems; Then call and email clients! Phones not working. Find something else to do in the meantime…” Although ideal and probably what we as business owners would do. Unfortunately that’s easier said than done!

An experiment conducted at Carnegie Mellon University, measured the brain power lost when someone is interrupted. In the study 136 subjects, divided into 3 groups, were asked to read a passage and answer questions about it. The first group, the control group, completed the test. The other 2 were told they might be contacted for further instructions at any moment via instant message. During the initial test the 2nd and 3rd groups were interrupted twice. During the second test, only the 2nd group was interrupted, while the 3rd group’s interruption never came. The results were “dismal”: during the first test, both interrupted groups answered 20% less than the control group. Proving that the distraction of the interruption, combined with the drain of preparing for that interruption, made the test takers 20% dumber. Enough to turn a B student into an F student.

With all these Studies on Interruptions, can we put a quantifiable measure on “Downtime”?

University of California Irvine did!

UOCI administered a study on workers productivity, as it pertains to task switching. Workers were shadowed for 3.5 days each, timing every activity to the second.  If they pick up a phone call, that’s the start time. When they put the phone down, that’s the stop time. When they turn to the Word application we get the start time and stop time. They found people switched these activities on average every three minutes and five seconds. They determined that interruptions, unrelated to the current task completely shifted thinking, taking longer to get back and remember where you were. “We found about 82 percent of all interrupted work is resumed on the same day. But here’s the bad news — it takes an average of 23 minutes and 15 seconds to get back to the task.”

Why focus on Employee Downtime?

Typically the number one cost in any business is payroll, human capital, and the second biggest cost is technology. The reason we invest in human capital is because the work that person, sitting in front of a machine, is doing greatly influences our bottom-line. Depending on the type of work administered by that person: The service rendered either has a direct quantifiable effect on our sales and revenue, as in the case of our billing or sales department, or indirect, yet no less important. As operational positions determine the longevity and quality of our customer relationships and their commitment to our company. For this reason companies invest in automation software, like CRM, ERP, tracking, Accounting, Dental, Medical, etc. So as to simplify processes and keep our people better focused and more productive.

The Ripple Effect of Network Downtime

Network downtime causes a ripple effect of lost revenue for business owners, mainly in areas of:

  • Delayed projects, cause to not meeting deadlines
  • Paying extra in overtime to meet those deadlines
  • Potential loss of customers or damage to brand/ customer loyalty due to delays in service
  • Loss of critical data, in the case of a cyberattack, power outages or natural and unnatural disaster
  • Data recovery time
  • IT repair costs
  • And where applicable, compliance violations that can result in significant penalty costs

As business owners, we can put a price on each of these. Individually they are a cost, cumulatively they can close our doors, diminish our bottom line and cause us to take extreme measures to recover financially.

What’s Really at Stake?

Dollars and Cents!

To truly understand the cost of IT “downtime” to businesses, the above spreadsheet paints a great picture.

We took a sample company size of 50 employees and broke them down by the # of Impacted Users or the amount of employees effected by a particular IT problem (or Point of Failure).  Suppose a problem was detected within the accounting department and their Point of Failure is the operational software. Now they could be using a number of accounting software: Quickbooks, PeachTree, SAGE, etc; but for our purposes the type bares no relevance. The problem is that the 5 people that comprise the accounting department are regularly, particularly during login, having to deal with a crashing application, forcing them to restart the computer and reload the application. This happens once daily and the entire process takes 10 minutes.

Taking into account Irvine’s research on task interruption! The 10 minutes it takes to restart and reload the application, is frequently followed by additional self inflicted interruptions, like: checking ones cell phone, quick chat with a coworker, organizing ones desk or an extended bathroom break. Already we see how a 10 minute interruption easily turns into 33 minutes of business downtime (or Average Recuperation per Occurrence (in minutes), when taking into account Irvine’s average 23 minutes and 15 seconds needed to refocus and get back to task.

The last 3 columns, is where things gets really interesting! Here we see the actual cost of that downtime per day, per week and per month. As for our example, where it’s effecting the entire accounting department, made of 5 people (average salary $20 per hour per employee) it’s no longer about the 10 minutes. Rather the 10 minutes or 0.554 of an hour is now costing our business $55.42 daily, $277.08 weekly and $1,200.69 monthly.

Now let’s assume something more critical is happening, impacting all 50 people in the organization, all other factors being the same. The numbers drastically change and our loss is that much greater: $1,108.33 per day, $5,514.67 per week and a whopping $24,013.89 per month. Enough to add 12 extra employees, at $20 per hour, to your payroll for the year.

To get a copy of the spreadsheet for your organization, you can email us at info@compitsolutions.com.

How to Prevent What you Can Control?

No amount of repair costs will ever outweigh, what’s truly at stake during downtime. Smart business owners know that. Unfortunately, knowing you have a problem and not having a preventative system in place, is like Bill Gates said “…it’s unsustainable.” This is the real reason why companies are investing in proactive services that diminish the re-occurrence of downtime. Through monitoring and timely resolution of core IT issues, organizations are able to keep technology sharp and their people at peak performance.

How a Proactive Approach can Save Your Business?

A proactive strategy is essential, as well as an understanding of the effects of downtime on your business continuity. It’s important to view your IT assets and resources as strategic. Outsourcing your IT is one way to implement a strategic/proactive plan to prevent and minimize downtime network outages.

Outsourced IT offers professional, 24/7 proactive systems monitoring and support. Allowing issues to be handled immediately, many times even before they’re noticed and definitely before they reign havoc on an organization. Through alerting and automation, IT service providers can appropriately diagnose and implement solutions in keeping your technology efficient, reliable and secure.

Here are just a few benefits to outsourcing your IT to decrease your risks of network downtime:

  • Proactive preventative plan in place for your business continuity
  • Network and server support from knowledgeable IT engineers
  • IT Security services monitoring your network and server 24/7/365
  • Data Protection
  • Hosted email
  • Fixed monthly rates under managed IT services

CompIT Solutions© is an outsourced IT service provider specializing in cyber security, network penetration testing, business continuity, local/ cloud backup and recovery, and VoIP business solutions. We offer certified and expert technical support, 24/7 help-desk and support services, and work diligently to correctly diagnose and resolve core network failures, while guaranteeing 99.99% network uptime. If you’re looking for managed IT support in New Jersey and the tristate area that keeps your business running, then call us today at 732-363-7353 to schedule your free technology needs assessment meeting. To learn more about how CompIT Solutions protects your business against downtime, visit us on the web at https://compitsolutions.com.

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