IT Systems Failures Cost Businesses 127 Million Lost Person-Hours: Survey
Businesses collectively lose more than 127 million person-hours annually-or an average of 545 person-hours per company-in employee productivity due to IT downtime, according to a survey sponsored by CA Technologies. This loss is equivalent to 63,500 people being unable to work for an entire year.
The survey of 2,000 organizations in North America and Europe also found that IT outages are frequent and lengthy-substantially damaging companies' reputations, staff morale and customer loyalty. Despite this, 56 percent of organizations in North America and 30 percent in Europe don't have a formal and comprehensive disaster recovery policy.
Among the findings, the survey revealed each business suffers an average of 14 hours of downtime per year, during which employees are only able to work at 63 percent of their usual productivity. After systems are back up and running, organizations lose an average of nine additional hours per year to the time it takes to recover data. During these times, employee productivity only climbs to 70 percent.
Half of organizations said IT outages damage their reputation, and 18 percent described the impact on their reputation as "very damaging." In addition, 44 percent of respondents believe IT downtime damages staff morale, and 35 percent said it could adversely impact customer loyalty. An incredible 87 percent of businesses indicated that failure to recover data would be damaging to the business. Twenty-three percent said this would be "disastrous."
"Avoiding IT downtime-and the resulting quantifiable costs in terms of lost hours and dollars-is absolutely critical to the performance of our business," said Zachary Slavin, IT director at Sobel Affiliates, a brokerage firm within Brown & Brown, an independent insurance intermediary organization. "Since calculating that a single hour of IT downtime results in 80 lost person-hours of work and more than $3,000 in costs, Sobel is carefully and proactively managing our business continuity strategy."
The total number of person-hours lost due to avoidable IT outages takes into account the total number of hours of downtime when systems are offline, the total number of hours between system restoration and recovery of all data, the impact on staff productivity during both of these periods, the number of staff affected and the overall number of avoidable IT outages a year.
"There are a variety of practical and affordable steps organizations can take to protect themselves against the adverse business impact of IT outages," said Steve Fairbanks, vice president of product management in the data management division of CA Technologies. "Given that these outages are a fact of life-and that some of the consequences of outages can be irreversible-investments in improved business continuity are extremely worthwhile."