By John Hamel, Principal, TurningPoint Systems
Make no mistake about it: These days, having a disaster recovery plan is as essential to your business as having a business plan itself.
Disaster recovery, it’s important to note, is not limited to executing a strategy for bouncing back from the impact of Hurricane Irma, say, or massive wildfires sweeping across California.
Disasters relating to downtime typically have far more mundane causes. These can include a leak in a building’s air conditioning system, for example, or a blown boiler, a network failure or a coworker throwing the wrong switch.
Causes vary but the losses are uniformly staggering.
According to the Rand Group, 98% of businesses surveyed estimated one hour of downtime costs them on average $100,000. And that’s just the beginning. Citing the 2017 edition of an annual study by Information Technology Intelligence Consulting Research, analysts said 81% of respondents figured that 60 minutes of downtime costs their business over $300,000. And 33% reported that one hour of downtime costs their firms $1-5 million.
What does all this mean to you, the IBM i customer running a small or medium-sized businesses? Only that the cost of not creating an effective plan far outweighs the expense of creating one that serves your business effectively.
This post lays it all out for you: Just what’s behind those numbers, exactly? How does your disaster recovery planning affect your reputation? And how do you find the right help to create the right disaster recovery plan?
Calculating the Cost of Downtime
The cost of downtime depends on a number of factors. Monetary loses vary by your company’s revenue, industry, how long your business is offline, how many people are affected, the time of day a system goes down, and more. Losses are significantly higher per hour for businesses based on high-level data transactions, such as banks, financial services providers, and online retail companies. Unplanned downtime during prime traffic hours, for example, will cause more significant damage.
The cost per hour of downtime, according to the Rand Group, is calculated by adding labor costs per hour to the revenue lost per hour. To calculate your revenue lost per hour of downtime, you need to know how much revenue you make every day and the percentage of your revenue an outage would affect.
Every organization can tolerate a certain amount of downtime before suffering irreparable damage. To know that duration, you need to understand the cost of response and recovery time for each application. In today’s economy, anything more than a moment can be too long.
Damaging Your Reputation with Customers
Chances are, your business provides one link in your customers’ supply chain. And customers across the board are expecting more from their partners as technology advances. Your best partners are the ones who can fulfill your orders almost instantaneously.
Maybe you pride yourself on your company’s ability to track orders manually when you go offline. The question here is, At what cost? As in how long was your workforce idle? What does it cost in labor alone to track workflow manually? To enter that information once you’re back online? What new work had to wait while that manual entry was completed?
Bad news travels faster than good. The last thing you need is to be known in your industry as a company that can’t fulfill customers’ orders. The cost of high availability and disaster recovery is tiny compared to the costs of lost business – and reputation.
Minimize Downtime with Help from a Professional Partner
Your best first step is to find a professional partner with experience in your industry. Your partner should be willing reach beyond your information technology department. You’ll want someone willing to work with your human resources and finance staff to cover the IT piece of your business contingency plan. Together, you can determine which systems need to be brought up within an hour of going offline, which can be brought up within 6 to 8 hours, and so on.
While features and functionality are critical factors in your choice of a cloud-based disaster recovery solution, IBM noted in a recent post, it’s equally important to find a trustworthy service provider who can help you achieve long-term success.
When evaluating potential cloud service providers, make sure they can satisfy you with their answers to the following questions:
- Can I choose from multiple service-level options to customize my recovery time objectives (RTO) and recovery point objectives (RPO) in accord with our system and application priorities?
- Do I need to pay for more than I need, and can I easily expand or reduce services as my needs change?
- Do you have a strong presence in my region and around the world to help reduce the distance my data must travel across the network?
- What kind of track record do you have for performing recovery operations in my region for companies like mine?
- Can I monitor and track my system and status myself at any time?
- Do you offer support 24 hours a day, every day?
It’s simply a matter of when, not if, your company will suffer unscheduled downtime. The only way to mitigate the associated loss is to have the right technology and strategy in place.
Take a few minutes to calculate what an hour of downtime costs your company. Keep that figure in mind when fielding proposals from providers skilled in developing and implementing effective disaster recovery efforts. Then add in the high cost of a damaged reputation among your partners and customers.
The difference will make the choice a clear one.
Want to learn more about implementing a HA/DRaaS plan? Get started with a free consultation with a TurningPoint expert.
About TurningPoint Systems
TurningPoint Systems provides high availability DRaaS (disaster recovery as a solution) systems that minimizes the financial impact of downtime and data loss.