The Real Financial Cost of IT Outages
How much does downtime cost a business? The dollar amount for each hour of downtime varies widely depending upon the nature of the business, the size of the company and the criticality of the IT systems to primary revenue generating processes. A global financial services firm may lose millions of dollars whereas a small manufacturer that uses IT primarily as an administrative tool may lose only a margin of productivity. Regardless of size, studies by IT industry analyst firms show that most U.S. businesses cannot function without computer support. On average, enterprises lose between $84,000 and $108,000 for every hour of downtime. With such losses on hand, many companies go out of business.
The Other Costs of Down-time: Non-compliance with Regulations
Additionally, there is the added burden of compliance. Several new acts and regulations mandate system availability and the protection of business data. Businesses may incur financial or legal penalties for failing to comply with these data or business availability requirements. For example, the Sarbanes-Oxley Act of 2002 stipulates that CEOs and CFOs attest to the truthfulness of financial reports and to the effectiveness of internal financial controls. Sarbanes-Oxley mandates a required timeframe in which to report financial results—each quarter and at year-end. Failure to make these deadlines can result in financial penalties.
Avoiding Unnecessary Costs with Disaster Recovery Plans (DRPs)
In order to avoid these potential costs, companies must develop strategies for Disaster Recovery (DR) – processes that can be used to cope with the losses and interuptions of both data and personnel in the wake of a natural disaster or human-initiated disaster (i.e., technological virus, terrorist attack). Disaster Recovery Plans (DRPs) can provide the blueprints for these processes, including how organizations can quickly recover access to software, data, and/or hardware needed to resume critical business functions. DRPs must be adaptable and routinely updated as new people, new offices, and/or new hardware or software is added. DRPs must be well practiced so that the key players are familiar with the specific actions they need to take should a disaster occur.
With the advent of virtualization technology, companies have an additional ally in their Disaster Recovery toolset. To find out how DataXtream can help you better protect your company with virtualization technology, read here.