The Real Cost of Business Downtime


Maximising productivity and minimising costs is a priority for every business, no matter its niche. Given our growing technological dependence, one minor misconfiguration or full-scale system failure can lead to significantly reduced productivity — or worse still, complete business shutdown.

In Europe, a total of 552 man-hours are lost due to IT and technology failures every year, resulting in a 37% drop in revenue generation. While businesses may have heard of business downtime, are they truly aware of the wider implications it can have?

ERP software provider Datawright explores:

How much can be lost through business downtime?

Productivity and sales can both be slowed or halted through business downtime, although the extent of this will vary sector-by-sector. Many factors can influence this including the number of staff affected, the impact on productivity, how long the downtime lasts for and the cost per employee per hour.

Taking manufacturing as an example, the typical UK manufacturer earns £29,419 (the equivalent of £15.32 per hour, based on a 40-hour week). Should downtime strike the factory floor, preventing 50 members of staff from doing 50% of their job for five hours, the business would face a loss of £1,915 for just one incident. As the scale of the downtime increases, so does the associated loss.

Businesses must also consider the loss in potential revenue associated with business downtime. If IT systems fail, for example, you could lose out on future sales because of unhappy customers. Regardless of sector, this is something all business will need to avoid if they are to continue their success.

What triggers business downtime? Preventative measures

Like any problem, you need to first understand what’s causing it to understand how to rectify it. Studies have been carried out to establish the most common causes, although results can vary wildly. The overall causes of business downtime include hardware and software failure, human error, the weather and natural disasters, and power cuts. So how do you prevent it from happening?

Software updates

While the failure of software may be a key cause of business downtime, thankfully the problem is easy to rectify. Make sure you install all available updates for your software to ensure it can continue performing optimally, minimising the risk of failure.

Similarly, be aware of the risks posed by using outdated systems. As cyber threats continue to evolve and materialise, older systems that may not have the required security capacity become obvious targets. Review your software at timely intervals to ensure it remains fit for purpose and relevant.

Hardware replacement

If your hardware fails, you may not be able to operate at all. Some industries will experience wear and tear more than others — for example, in manufacturing, machines and presses will require regular maintenance to ensure they remain functional and efficient. A solution to this is to carry out predictive and preventative maintenance to stop issues in their tracks.

Don’t underestimate staff training

Human errors will always occur and are near impossible to stop — but what you can do is invest in training to stop the frequency of them occurring. Ensure that all employees are fully aware how to use the technology and software they require for their role to prevent against issues like this from arising.

Protecting your business against downtime is not something you should neglect; take the precautionary steps today to ensure your productivity and profitability.