The Cost of IT Incidents and How Organizations Can Avoid Them?

An incident management process consists of procedures and actions taken to respond and resolve critical incidents. This includes how incidents are identified, how they are communicated across channels, and tools utilized during the process.

Big companies or small startups, incidents are alike, downtime is always a risk, and it’s hard to imagine otherwise for those who haven’t been paying attention. These incidents are not only destructive to trust and loyalty, but they also lead to financial losses.

Why Is Incident Management Important?

An incident management system promotes the detection, investigation, and response to incidents using several practices, processes, and tools. Business leaders of all sizes rely on automated incident Response systems to meet most data compliance standards.

IT teams rely on incident management processes to quickly address vulnerabilities and issues. Faster responses help minimize the overall impact of incidents, mitigate damages, ensure systems and services continue to operate as planned.

If you fail to manage incidents, you may lose valuable data, experience reduced productivity and revenue, or be held liable for breaching service level agreements (SLAs). In addition to investigating and correcting issues, IT teams must dedicate significant time to resolve minor incidents.

Estimating the Cost of a Potential Incident

A Garter report says that the average cost of downtime ranges from $5,600 to nearly $9000 per minute. For small businesses, that number drops significantly from $137 to $427 per minute.

To estimate your company’s cost, you need to understand where your company falls on this wide spectrum of factors, including industry vertical, organization’s size, and business model.

Some of the high-risk industries include banking/finance, government, healthcare, manufacturing, media and communications, retail, and transportation/utilities. Organization size is also one of the key factors as the downtime cost could vary depending on whether the business is small, mid-sized, or large enterprises.

Further, business models also influence how much downtime costs. An eCommerce site without physical locations is more at risk of a web outage than a business with physical locations. If your business model depends on uptime, then your business has more to lose from downtime.

For a quick estimate of your downtime costs, use the following formula based on your business’s size and the number of minutes your most recent outage lasted.

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

Cost-per-minute for small businesses is $427. For medium and large businesses, it is $9,000. But there are more factors you need to consider while estimating the downtime cost.

Depending on each aspect of the outage like the duration, the number of employees affected, the number of customers or other stakeholders affected, whether revenue is affected, for instance, if you cannot sell to customers, or production is halted, the legal costs, and reputational risk.

If your system goes down for an extended period and is widely distributed, it will cost more to fix and restore the service. Typical outages last a few hours, on the other hand, extreme outages can last for weeks. The longer your systems are down, the greater the chance of complete ruin.

How can we minimize the risk of downtime and minimize costs?

Downtime is inevitable while routine maintenance and upgrades are necessary to keep your business running smoothly. For companies of any size and in all industries, minimizing downtime should be a priority. You can schedule them at a time of least disruption to your operation to minimize the impact on your business. We are sharing five measures you can take to minimize the risk of downtime and minimize costs.

1. Prioritize system performance and prevention

It is impossible to avoid incidents completely, but there are ways to minimize them. This is where leadership needs to replace outdated systems and stay on top of the security features and fix issues before they become full-blown incidents due to the high cost of downtime. Keeping your software up-to-date, such as downloading patches and running the latest version is crucial.

Depending on the systems you are using and the expertise of your responders, you may need to verify or confirm the changes needed in the response team. Response teams can prevent harmful changes or unnecessary approvals by preventing them from taking action.

2. Create a detailed disaster recovery plan

The better your incident response plan, the quicker and more effectively your teams will handle incidents. This is why the first step of implementing any new incident management and IT alerting system should be process and planning.

Creating a detailed disaster recovery plan can present you with greater chances for faster recovery and business continuity plans to get back to business as soon as possible after a significant outage.

3. Communicated effectively and often

35% of downtime costs are due to business disruptions, which makes incident communication and customer service more crucial than ever.

Communication is essential for team collaboration and effectiveness. Establishing guidelines is one way to protect and ensure communication. These guidelines can specify which communication channels should be used, what kind of content should be delivered, and how communications should be documented. Clear guidelines can help diffuse tension and blame during stressful response times by defining how employees are expected to interact.

4. Ensure systems configuration

It’s always important to have the system configured. One of the fastest ways to reduce downtime and mitigate its costs is by eliminating single points of failure from your existing infrastructure and processes. These include following good backup practices, load balancing your servers, and including peer-review and technical fail-safes in your deployment.

5. Assesses risks and vulnerabilities

Consider the risks and vulnerability during downtime and create a potential recovery plan to mitigate those risks and weaknesses. Regularly assess the services of the external providers such as data centers, website hosts, internet service providers, and others that ensure reliable services.

Communicate the pan and security policies to your incident response team members what to do to keep the system and data safe. This will also keep other employees and stakeholders informed throughout the outage and be proactive on the restoration process. Allowing the employees to be productive even during the outages.

Bottom Line

If downtime occurs, what steps will you take? In case you don’t know the answer, you’ll likely encounter a bleak time in your business timeline. If you need guidance in minimizing IT downtime and enhancing your business performance, Zapoj is for the rescue.

Zapoj is a versatile incident response software solution that can help your business reduce the negative consequences of downtime. Leveraging the latest tools, you can improve various aspects of your It operations.

Zapoj is a well-integrated system that allows business leaders to be prepared for an unplanned outage. By empowering the workforce throughout downtime and seamless communication channels, ensure data security, you can minimize the downtime and accelerate business value.

Sign up today or request a demo to optimize your incident management process and minimize downtime costs

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button