IT downtime can mean disasters for businesses. Modern operations rely heavily on computer and network systems. Businesses can lose money and valuable data when these systems are down. A single incident can cost a company as much as $1 million in damages. Plus, downtimes affect the employee’s morale. It delays the completion of projects. IT downtimes also make your company look unreliable. Clients can’t trust you with their data and emergency needs any more. In more serious cases, your business might even have to face legal consequences. However, you can mitigate the damages of potential IT downtimes with the correct strategy.
Table of Contents
What Are The Reasons For IT Downtime?
IT downtime describes the occurrence of mainly three events. They can happen individually or simultaneously. These are computer system malfunction, server downtime and network downtime. The reason can sometimes be voluntary system maintenance. The involuntary reasons include-
Human Errors
Staff with access to IT infrastructure can make mistakes that lead to system outages. They might have misconfigured software, server or network settings. For instance, setting incorrect firewall rules. The accidental deletion of critical files is another common example. Deploying untested changes can also challenge your company’s IT resilience.
Cybersecurity threats
Unpatched software makes your system vulnerable to attacks. Malware or Ransomware might be lurking somewhere in such a system. These infections can make your systems weak and unusable. Lack of proper access control and authentication processes can also lead to this.
Software issues
Your computer’s OS might encounter a bug that leads to crashes. Faulty codes or memory leaks can lead to application failures. Sometimes the system might not be compatible with libraries and frameworks. As a result, it dysfunctions.
Hardware Issues
Hard drives start to malfunction when they are close to their expiry dates. This is also true for network equipment. For instance, old switches or routers can suddenly fail. Thus, they lead to unexpected IT downtimes. Overused servers act the same way. Sometimes the issue might be with server maintenance. There might not be proper ventilation in the server room. This can lead to overheating and cause it to fail. Power fluctuations also severely affect server performance.
The Impact Of IT Downtime On a Business
IT downtimes have a severe impact on business continuity. It brings all your operations and can cause damages worth millions of dollars. Here’s a more detailed overview-
Productivity Loss
IT downtimes challenge the operational efficiency of your business. Your staff has to involuntarily stop their work and wait for the system to come online. For instance, an email server outage can cease valuable business communication.
Sometimes the employees can’t access the necessary tools for their work. Think of a CRM system crash. Customer interaction management can become too overwhelming for your sales representatives.
This can lead to low morale in employees 38 per cent of Australian businesses report that IT downtimes are a major reason for employee burnout. The disruptions in workflow can be extremely frustrating for the workers. Plus, they have to put in effort or work overtime to make up for the damages. You might not be able to retain skilled workers if your workplace experiences frequent IT downtime.
Angry Customers
Even the most loyal customers don’t take kindly to business interruptions. IT downtimes prevent them from getting the desired service. Plus, it wastes their time. As a result, they become dissatisfied and lose trust in your service.
This applies more to services that are exclusively online-based. Take a mobile banking app for example. Customers would quickly abandon your services if the app often experiences outages. Or, think of a busy e-commerce platform. Imagine the customers’ disappointment if the platform’s order processing crashes during the Holidays.
Brands might not live up to their promises due to IT downtimes. For instance, a food app might promise 30-minute deliveries. A system outage can keep the customer waiting for a longer time. This can make the customer feel let down.
The immediate effect of such dissatisfaction might be negative reviews. Too many of them and your business will stop getting new clients. In the long term, the customers will leave you and sign up with a competitor.
Data Loss
There might be varying degrees of data loss during a downtime. A hard drive crash can make the stored data on your system inaccessible. Meanwhile, faulty RAM can corrupt existing data.
Software glitches can also lead to data corruption. For instance, a faulty update can alter database records. An application crash can leave files in an inconsistent state. Downtimes affect the automatic data backup processes of your company. This can also lead to data loss.
Critical business operations rely on data to continue. These include order processing, inventory management and so on. The operations come to a halt during a data loss.
Data loss can impact employee morale too. A worker might have been working for hours on a spreadsheet or a Word doc. Imagine their frustration if they lose the file or unsaved changes due to an IT downtime.
The consequences of data loss are most severe when it’s due to a cyber attack during the downtime. Cybercriminals can steal personal data from your system. This might be employee or customer data. For instance, names, addresses, and social IDs. Later they can use it to commit identity theft.
They might also steal banking information to commit financial fraud. Sometimes criminals might hold sensitive company data and demand a ransom. Or, they might sell the proprietary information to your competitors who exploit it.
Cost of IT Downtime
The downtime costs for business can be pretty high. For instance, the collective loss of Australian business due to downtimes was 400B USD in recent years. This includes various types of financial loss. For instance, profits, revenue, employee overtime, new investment in IT structure etc.
Among those the biggest direct loss during downtime is in revenue. The average Australian company loses around 49M USD per year in revenue due to downtimes.
This happens because customers are unable to complete transactions. The effects are more devastating in e-commerce where the transactions are time sensitive. Plus, there are so many lost sales opportunities during downtime. Finance, telecommunications and retail business suffer the most.
You have to consider the indirect IT downtime costs too. For instance, employees and contractors cannot work during downtime. Still, you have to pay their salaries. Plus, you have to pay hourly rates when they work overtime to compensate for lost work.
Investment in system restoration and upgrades also contributes to financial loss. You might have to buy new IT support technology. Sometimes you need to bring in external experts to review and repair the system. Emergency solutions for business continuity aren’t cheap either. For example, backup servers and cloud services.
Legal Troubles
IT downtimes can lead to breaches of SLAs. Service Level Agreements (SLAs) are contracts that outline various deliverables between you and the customer. These include response time, service hours, issue resolution, etc.
You might fail to hold up your end of the contract during IT downtimes. This can lead to legal penalties. You may have to pay a refund to the suffering party for each day of the delay. Plus, it makes your company look very unprofessional and unreliable.
Australian companies should also consider the Privacy Legislation Amendment. This bill enforces penalties for interference with the Privacy Act 1998. Data breach during downtimes renders you non-compliant with the act. This can lead to legal penalties worth millions of dollars depending on the impact.
Apart from these, you should also consider personal lawsuits. Your shareholders might sue if the downtime decreases the company’s stock value or financial performance. They might think the downtime resulted from your negligence or mismanagement.
Large-scale downtimes can also trigger legal actions from your customers. They might form a group and seek compensation for personal damages during the downtime. All these fines and litigation costs will add up to the already existing financial losses.
Reputation Damage and Fall in Stock Price
All the above impacts can damage the years of reputation the company built. Customers will speak unfavourably on social media and review sites about your service. Meanwhile, the breach will make people scared of trusting your business again with their data. Plus, the non-compliance will put your company in the negative limelight.
All these paints the picture of a company that is untrustworthy and irresponsible. You will lose present and future customers. Thus, a single IT downtime incident can completely destroy the most established company.
A less severe scenario is a fall in stock price. Downtimes can cause a drop of 1-9% in a company’s stock prices. It will take many months to recover from this. Downtime signals operational weakness in a company. This demotivates investors. Consider market psychology too. News of downtime spreads fear and uncertainty in the market. This prompts the investors to sell off.
How To Prevent IT Downtimes?
IT downtimes can destroy a company you had built over the years in moments. However, you can take some measures to prevent the situation from becoming so serious. It involves maintenance work and plan development. Consider the following IT downtime solutions.
Preventive Maintenance
Properly maintain the elements of your IT structure so there are no reasons for downtime. Make sure you are running the latest version of the software. Change old and weary hardware immediately upon routine inspection. Preventive maintenance also includes disk clean-up, defragmentation and patch fixing. Ensure proper cooling systems for the server.
Cloud Backup
Conduct your business using cloud platforms. AWS, GCP and Microsoft Azure are popular cloud solutions for businesses. These platforms have built-in solutions like load balancing and auto-scaling. They can effectively minimise downtime for large-scale operations during a traffic spike.
The cloud backups on these platforms also save you from data loss. You are saving the business data off-site with a cloud backup. An IT incident can completely corrupt or delete your data. Still, you can leverage the backup to get it all back. Thus, continue your business operations.
Remote IT Support Services
Remote IT services provide IT support without being present on-site. These teams can provide top IT service at a much lesser cost than in-house staff.
A major benefit of these services is remote monitoring. These teams can monitor your IT structure 24/7 and keep it up to date. They rely on various indicators to evaluate your IT health status. These include CPU usage, memory availability etc. As a result, they can identify potential issues before they become serious enough to cause a downtime.
This also includes network downtime monitoring. The team will proactively monitor key metrics of network health. For instance, network latency, bandwidth usage, packet loss, etc. They can also look for signs of network congestion and faulty hardware. Thus, effectively preventing network downtimes. It also ensures consistent smooth network performance.
Redundant Systems
You are less likely to experience downtime if your system doesn’t have a single point of failure. In other words, don’t rely on a single server or power supply for your operations. Instead, establish failover mechanisms.
For instance, create a failover cluster of servers. Replace a single server with a network of servers. When a primary server fails, a secondary server will immediately take over. This ensures there is no interruption of services. These redundant systems are an important part of business continuity planning.
Cybersecurity Measures
Staff training is crucial to prevent data breaches. Educate them on phishing attempts. Provide instructions on using strong passwords.
Use the latest anti-malware software. Ensure the security protocol is up to date. Update your software and hardware with the most recent security patches. This will close the vulnerabilities in your system that hackers commonly exploit.
FAQs
What is IT downtime, and why is it important to minimise it?
IT downtime is the malfunction of a company’s computer systems, servers and network. All three can occur simultaneously or separately. Failure to minimise downtime can result in all kinds of losses. These include loss of money, business data, reputation, and share price. You will lose customers in the long term. Wide-scale downtimes can result in legal penalties.
What are the common causes of IT downtime?
The cause of downtime is usually related to software, hardware or server maintenance. Outdated software diminishes the system’s performance. Old and weary hardware can malfunction at times. Ill-maintained servers can also fail and cause IT downtime.
How can cloud solutions help reduce IT downtime?
Cloud solutions can be a tremendous help during disaster recovery. Crucial operations are dependent on business data. Various reasons can lead to data loss during a downtime. Therefore, your operations will stall after the incident. Cloud solutions can help you keep a backup of the data. It will also keep copies of the data on various bases around the world. So, you can immediately recover and continue operations after the incident with little or no disruption.
Final Words
Consistent monitoring and maintenance are essential to prevent IT downtimes. However, this can be difficult for small businesses who can’t afford a complete IT staff. ITTechbox can provide a solution. We offer managed IT services for all types of industries. Our experts will detect minor issues way before they become big enough to cause downtime. We also offer cloud computing and cybersecurity services. This lets you maintain a flawless IT structure without keeping an in-house staff. Just focus on building and growing your business. Let IT Techbox worry about your IT infrastructure maintenance.