4-Step Formula to Calculate the Cost of Downtime for Your Business

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A 4-Step Formula to Calculate the Cost of
Downtime for Your Business

• Ever thought how downtime can hurt your business,
  especially because of an IT issue? For years, one
  universal standard to measure downtime is
  calculating the cost to business. However, the
  overall loss to the business is much bigger than
  we can actually see. The impact of a single IT
  failure on the top or bottom line of a business
  cannot be measured by just calculating the loss
  to revenue.

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Calculating the Cost of Downtime

• In order to calculate the loss to a business
  because of an IT breakdown, weve tried to
  include all verticals that are impacted due to
  any IT crisis. You can use this formula to figure
  out the total cost of downtime that affects your
  business
• Cost of Downtime (per hour) Lost Revenue Lost
  Productivity Cost to recover Cost of
  intangibles (i.e. reputation cost)

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Lost Revenue

• Identify revenue generation resources of
  your business to examine the actual loss of
  money. After that calculate hourly revenue/profit
  you earn through those resources. This will give
  you a straightforward figure of your actual
  revenue loss even if one component of your
  operations/production breaks down.

4
Lost Productivity

• The cost of downtime will result in productivity
  loss because your employees wont be able to work
  and they are your fixed liability. Salaries are a
  fixed cost and you need to pay it anyhow. So
  calculate the average amount you pay to each
  employee per hour and then figure out the cost of
  loss of productivity during downtime.

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Cost to Recover

• Total cost associated to recover your data and
  resuming to normal operations falls under this
  step. It includes lost data recovery cost and
  other expenses related to setting up the systems
  back. Figure out how much cost you needed for
  recovery.

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Cost of Intangible Assets

• During an IT disaster there is an unforeseen loss
  of credibility and brand value. If there is a
  loss or damage to your client it will account to
  loss of reputation and lack of trust in your
  brand. You need to calculate the total cost of
  these intangible assets caused due to downtime.
  Figure out how much is the loss of investors
  trust and to brand reputation.

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Being one of the trusted partners and IT managed
service providers in NSW, Sydney, ICTechnology
assures you to minimize your service disruptions
and unplanned downtime. If you are not able to
calculate the cost of downtime for your business,
we will provide you a detailed analysis of how
much single downtime event can cost you. It will
help you to take a proactive action against such
downtimes. To avoid frequent incidents and
improve your productivity, you can rely on us.
With our business continuity services, you can
protect yourself from unplanned data loss and
downtime. For more details, please contact us at
ICTechnology.
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