Bridge to Success

What Downtime Really Costs You

Posted by MHO Networks on Aug 23, 2017 10:38:58 AM

An outage of any kind that causes downtime doesn't appear to cost much on the surface. It is the less obvious losses -- from productivity to reputation and beyond -- that form the true cost of a downtime incident.

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Topics: Network, customer service,, Downtime, uptime,, data, productivity, disaster recovery

The Real Cost of Downtime

Posted by MHO Networks on Jul 24, 2017 9:00:00 AM
On the surface, it would be easy to think that system downtime really doesn't cost anything. No one ever gets a bill for downtime, after all. In some cases, when a service level agreement (SLA) has been violated, it can even prompt taking something off the bill. 

However, downtime can have many costs that users don't consider. The real costs of downtime aren't always measured in dollars and cents, but many of them can have an affect on the bottom line all the same.

What Might Have Been

A familiar concept to economists--though not always so familiar everywhere else--is opportunity cost. Opportunity costs are costs incurred by not pursuing an opportunity, either by inaction or deliberate choice. When a business doesn't pursue a million-dollar line of business because of perceived lack of potential, the opportunity cost is that million dollars. If a company holds cash, for one reason or another, without placing it in an interest-bearing vehicle, the lost interest is an opportunity cost.

Downtime creates huge opportunity costs. When employees can't work thanks to a down network or application or anything else that experiences downtime, that business's employees are incurring opportunity cost. Not only can the employees not produce, which means that potential gain is lost, but the employees must still be paid, which turns into real cost as well.

Reputation Lost

Another less quantifiable but still important cost of downtime is reputation. It's well known that more people will tell others about bad service than about good. A 2014

American Express study found that the number of people talking about bad service beat those talking about good by a factor of almost three to one. 

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Topics: revenue,, customer service,, Downtime, customer experience,, sla,