How Expensive Is A Computer Network Outage To Your New Jersey Business

Computer Network Outages are expensive for the average New Jersey business. In this article we'll help you understand the true costs.

Computer Network Outages Are Expensive For All New Jersey Businesses

 Baroan Technologies will help you prevent computer network outages from disrupting your New Jersey business.

Downtime is a term used when computers or IT systems are offline, not operational, or unavailable. An organization experiences downtime when its infrastructure or network fails to perform its primary function. Among the many different causes of downtime, the three main reasons include system failures, human errors, and network outages. It’s important to understand these causes to help reduce the duration of downtime. No matter the reason, IT downtime can be very costly for a business.

Reasons For Computer Network Outages

Knowing and understanding why downtime occurs, and how to help prevent issues that arise, while being prepared for downtime, will help reduce risks and costs. I’m sure we have all experienced downtime. For example, your computer wouldn’t start or it just shut down, a website won’t load, or a natural disaster prompted a power outage that cut off the network completely. System failures, human errors, and network outages are among the top reasons for downtime.

  • System Failures: This includes computers, telephones, printers, servers, routers, power supplies, and more. When any one of these systems fails, the business fails. Network monitoring and system updates are crucial to keeping your system running smoothly. In-house technicians can run regular maintenance checks but partnering up with a managed IT services company, like Baroan Technologies, will thoroughly take care of the hard work for you.
  • Human Errors: Humans account for 22% of system downtime. At any time, a person can accidentally delete a system file, causing an application to crash. Someone can accidentally spill their coffee on a network server, also causing downtime. To reduce human errors, it’s best practice for an organization to provide employees with training on the use of systems and software, create and document operating procedures for staff to follow, and keep important infrastructure, like the network server, away from any potential “spills”.
  • Network Outages: These situations are harder to control or prevent. We never really know how hard or when Mother Nature will hit us, causing a power outage. We also don’t know how a provider’s systems operate. It’s a good idea to reach out to service providers, such as internet, phone, and power, and ask about their average uptime, past outages, and length of their system’s downtime. It is also a good idea to consider using different providers for different services, instead of bundling all services with one provider.

Actual Cost A Computer Network Outage

According to a 2014 study by Gartner, the average cost of downtime is $5,600 per minute. That is an extraordinary amount of money for one minute. This was also the figure presented in 2014. In the past 7 years, that amount has increased to approximately $9,000 per minute. That is a lot of money for any business of any size. For smaller businesses, the margin of downtime cost is lower, as reported to be approximately $427 per minute, but either of these amounts can close a small business forever. Of course, there are a few factors that determine the exact cost of downtimes, such as industry vertical, organization size, and the business model.

To calculate the downtime costs for your business you can take information from your recent downtime incident and plug it into this quick downtime formula:

Minutes of Downtime x Cost-per-minute = Downtime Cost

Let’s say, for example, there was a system downtime of one hour:

  • The cost for a small business would look like this: 60 x $427 = $25,602 – It cost your company $25,620 in that one hour of downtime.
  • The cost for a larger business would look like this: 60 x $9,000 = $540,000 – It costs your company a whopping $540,000 in just that one hour of downtime.

There is more to understanding the full cost of downtime, other than calculating with the formula above. The true cost of downtime also includes business disruption, revenue loss, end-user productivity, and lost internal productivity. In some cases, it’s important to consider costs incurred through penalties, fines, depleted inventory, contractor costs, equipment replacement, and employee retention.

Minimize Your Computer Network Outage Costs

It’s important to be prepared for downtime by mitigating downtime risks to minimize downtime costs. There are several ways to do this: have a great disaster recovery plan in place, communicate clearly and often, eliminate single points of failure from infrastructure and processes, prioritize prevention with outdated systems and security features, and discuss impacts and actions after an incident has taken place to prevent it from happening again.

Since 1997, Baroan Technologies has been at the forefront of technology for the Tri-State area with experts that deliver effective business IT solutions. We offer services that include Managed IT, Cloud Solutions, Cybersecurity Solutions, and so much more. Our daily goal is to always help our customers and clients increase their success and remain profitable with every use of their technology. Let us help you reduce the risks of downtime, and downtime costs, by being your managed IT services partner. We will take care of all your technological needs so you can focus on what really matters, your customers and their needs.

Information Technology Aligned With Your Business Goals?
Baroan is a complete IT services & IT support company working with organizations in Elmwood Park and across the United States of America.

Written by Guy Baroan