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As wonderful as technology is, it’s not perfect. Systems crash, Malware infects software, the Internet goes down and hardware fails. The effects of IT failure are far-reaching. Just one outage can end up costing a business much more than most people realize. According to one survey, IT downtime results in over $26.5 billion in lost revenue each year. The average downtime across industries is reported to be 90 minutes, which can cost companies $5,600 each minute.

How downtime affects your business

IT downtime can impact your bottom line in many ways, including:

  • Lost revenue
  • Paying employee overtime to meet deadlines
  • Lost productivity while systems are down
  • IT recovery costs
  • Costs of implementing new systems or software

Some of the most substantial costs, however, can’t be measured in dollar signs. Customer dissatisfaction is one example. If your customers can’t place an order because a website is down or a system outage causes deliverables to be late, you run the risk of losing loyal, existing and potential customers. Your reputation could also suffer as a result. Bad reviews online, social media attacks and angry customers can all lead to a public relations nightmare that could be difficult to recover from. If IT downtime resulted in a data breach of sensitive information, you could find yourself dealing with a lawsuit; retailer Target’s major data breach of 2013 has resulted in 140 lawsuits to date, along with a class action settlement of $10 million. The severity of IT downtime varies among industries. A manufacturing company, for example, may have to shut down production altogether, while some businesses may experience downtime that only affects internal processes.


What causes IT downtime?

There are hundreds, if not thousands of different scenarios that can lead to system failure and downtime. A 2013 report found that among small- to mid-sized businesses, the leading cause was hardware failure, accounting for 55 percent of all downtime. This can include hard drive failure, memory errors and even power outages. Human error followed at 22 percent, software failure at 18 percent and natural disasters at five.

Preventing downtime disasters

Despite the considerable costs and inevitable consequences, 56 percent of companies in North America don’t have a solid disaster recovery system in place. Why not? The associated costs and the amount of time necessary to select and implement an IT prevention and recovery plan are the biggest reasons companies don’t have a plan. However, these costs are minimal when compared to the costs of significant downtime. One of the best ways to enhance security is by diversifying data protection. For example, instead of putting all your data in in-house storage, combine off-site storage with cloud-based services. Testing and planning within the IT department are also key components of mitigating loss from downtime. Running through potential scenarios and developing plans to fix them can help a business get up and running quickly should a disaster occur. For businesses that don’t have the staff or technical prowess needed to implement a full-scale data protection and recovery plan, outsourcing to a managed IT services firm can provide peace of mind. As the saying goes, “Prevention is the best cure.” While not all IT downtime can be prevented, taking the proper security and backup measures, and having a recovery plan in place can help minimize costs and damages – and get your business up and running again.