The impact of downtime can be devastating, especially when you bring profits and bottom lines into view. Here’s how you can calculate the cost of a downtime event.
Downtime Is Not Fun
Downtime affects your business from many directions. Not only does it hurt your customer relationships, but your business will also experience:
- • Lost revenue.
- • Cost of recovering, repairing, and/or replacing IT solutions.
- • Wasted materials.
- • Compliance and regulatory issues.
- • Repercussions to your supply chain.
- • Overtime costs to make deadlines when downtime destroys your schedule.
- • Decreased employee morale and increased stress.
- • Paying your employees to sit around.
Calculate the Monetary Loss Value of Downtime
Calculating downtime requires you to estimate the utilization percentage of each employee and their technology. That means how much work they do that requires technology to accomplish. Multiply this number by each of the employees’ salaries per hour. If you have groups of employees making the same salary, multiply each subgroup by the number of employees in it and re-total. This gives you your total lost productivity per hour.
This gives us the following equation:
Calculating recovery costs is much more simple. All it takes is some simple addition. If you combine all of the costs detailed above, you can calculate the total hourly cost of the incident. Of course, this doesn’t include intangibles like damage to your reputation and brand.
Shocked? Let Us Help You Avoid Downtime
This should bring the amount of lost revenue and opportunity caused by downtime front and center. You need to focus on keeping your business successful while avoiding downtime. We can help.
Quikteks can monitor and maintain services that prevent downtime for your business in the first place. You won’t even see the problems because we’ll fix them remotely before they affect you. To learn more, call us at (973) 882-4644.