Time to panic - OUTAGE ALERT!!

Downtime costs UK businesses ￡2billion in 2010 and ￡12billion in 2016 in lost revenue, how are your business's outages impacting your growth?

How on earth did we get here? Losing ￡2billion in 2010 increasing to ￡12billion in 2016

It’s that macabre word that makes all businesses tremble just at the thought – ‘Downtime’, and rightly so because, recent studies estimate downtime cost UK companies ￡2billion in 2010 according to a report from CA Technologies and ￡12billion in 2016 from a report by Opinium and imperial college.

This shows a massive amount of money being lost and a six-fold increase in five years.

Surveying 1,808 organisations across Europe, The CA Technologies ‘Avoidable Cost of Downtime 2010 Report’ revealed the shocking implications of IT outages on a business. With the average hours of downtime per year coming in at 14 hours, the UK was actually the worst contender in Europe averaging 27 hours per year. What’s more with these interruptions, the report also revealed that this downtime hindered the organisations’ ability to generate revenue by almost a quarter during these periods. The study also found that the departments most likely to suffer during downtime were operations (76%), finance (52%) and sales (39%), leaving very few sectors escaping the mercy of downtime.

The latest report found that 72 per cent of businesses – approximately 3.9 million enterprises – experienced internet downtime during working hours in the year to 31 March 2016, clocking up 149 million hours of internet downtime between them. The companies affected suffered 43 hours of lost connectivity and losses of ￡3,125 each on average, the equivalent of ￡521 per employee.

Shocking statistics, but surely the situation is improving as we move into the era of high availability right? Sorry but No it appears things are getting worse, and service expectations of today’s consumers means that every second of downtime is more valuable than ever. 

With the lost revenue from downtime averaging in at ￡138,000 for every single hour across UK SMEs (according to an Aberdeen Group Report) every minute really does count. With this average varying considerably from industry to industry from approximately ￡55,000 per hour in the media sector to a huge ￡3.91 million per hour for large online brokerages, if you haven’t already, it’s time to scope out the impact of downtime on your business. Whether you fall in the top portion hit hardest with your business relying solely on online transactions or you’re a manufacturing business whose downtime results in the destruction of any in progress production, the impact can be devastating and sometimes unrecoverable.

Other consequences

CAPEX and ROI are usually the two factors that lie at the heart of any businesses concerns, but the repercussions of downtime don’t stop there.

The impact on the productivity of your staff can threaten the levels of quality your employees are able to deliver, not only frustrating them but frustrating your consumers too. What’s more you might think that if you’re a smaller business you’ll suffer a smaller blow, but unfortunately this couldn’t be further from the case. The CA Technology Report also discovered that small businesses actually suffer most in periods of recovery, with employees only able to achieve 57% of their usual productivity levels compared to 67% in medium and large sized companies. What’s more if consumers rely on the productivity of your staff to deliver life dependent applications, you could ultimately be putting lives at risk – any business wants to avoid this.

In the perils of downtime, you can always count on the media to inform the masses of your recent misfortune too. So if productivity and monetary deficit weren’t enough, the blow to your reputation might just be the final nail in the coffin. According to OISG Group when an outage creates a disruption to a service with high demand, the damage to your reputation is often irreparable with 72% of web users reportedly abandoning a company website and heading straight to a competitor. So not only have you suffered the consequences, you’ve sent your lovely once loyal customers straight to the warm embrace of your rivals.

Having worked in the data connectivity arena for some time there some simple starting pieces of advice I would give to any business for connectivity back up and fail over:

1.    Are your data connections dual diverse?

Some companies pay a high price for a ‘back up’ circuit and can even neutralise that cost by using both circuits and combining the bandwidth so in the event of one of them failing – the other can manage the load and the business can keep going.

The problem with this set up can be the circuits are from the same provider, go back to the same POP and even enter the customer premise through the same duct. So if one is going to fail – its more than likely the other will too.

Dual diverse solutions use separate ducts, and terminate to separate POP’s in opposite directions so its unlikely both circuits will fail unless the carrier has suffered a larger outage as opposed to a fibre cut.

2.    Are you using a wireless fail over?

Wireless data technology, including Satellite Broadband services have matured and evolved to provide fast and reliable connectivity that can rival and sometimes out perform fixed line data services. In addition, the costs have reduced so you should always consider an ‘over the air’ fail over combined with the ‘underground’ primary.

If your primary circuits are meaty 1GB+ players then you should simply arrange your network to ensure the wireless fail over is set up to support the mission critical applications so at least the business can limp through until the primary service is restored and can return the business to full speed. Operating slower is better than a complete and sudden grind to a halt.

Data connectivity is considered as a utility these days. When was the last time you walked into your office to find there was a power cut and nothing switched on? You would be baffled and annoyed this could even happen. Same now applies with data connectivity.

Lets get the low cost and effective systems in place please then we can cut the ￡12billion bill down to something more understandable – at the minimum less than 2010 levels. Otherwise at current rates we will be unnecessarily losing/wasting ￡20billion a year by 2020.