Market Watch

Choosing the right balance of risk vs investment for your organization

In my previous post I offered some tips for getting your investment approved by senior management. Now that you have their ear, let’s not forget about an important aspect for any digital application: downtime.

In the era of the customer and digital economy, organizations strive to offer a better customer experience. A significant part of that is making sure your organization’s applications are always on, especially the customer-facing ones. Indeed, for 65% of the organizations in Veeam’s research, having more frequent and real-time interactions with their customers was a key driver for minimizing downtimes.

Notice that we are talking about minimizing digital infrastructure downtimes, and not avoiding them all together. Downtimes are inevitable and very difficult to anticipate; this is true for small companies and large enterprises alike.

Reasons for downtime

When we think of the causes for downtime, natural disasters and hardware failure are the first things that come to mind. But you’d be surprised to know that human error is quite a common culprit. Estimates vary, with Dimension Data reporting that 37% of failure is due to configuration or other human error, and an Avaya study  states that a whopping 81% of IT professionals surveyed experienced network downtime caused by IT personnel errors.

And as IT environments grow more complex (multiple servers, virtualization etc.), the human element can further increase the chances of failure.

How much does downtime cost you?

The longer the downtime, the more it costs. Estimates from the Aberdeen Group show that even a small company loses on average $8,580 per hour of downtime; this average can easily surpass half a million dollars for a large enterprise.

Aberdeen

Ironically, a quick search can show you how much revenue Google lost from a 5 -minute outage in 2013 ($545,000). Let these numbers sink in for a moment.

Most companies, though, are unable to quantify the financial impact an hour of downtime would have on their most mission-critical applications. It stands to reason that the lack of knowledge of the risks is due to a lack of awareness and underestimation of the impact. Knowing how much you stand to lose is a powerful reminder to craft or update your prevention and recovery policies.

And it’s not only revenue that is lost. The organization’s reputation, customer satisfaction and employee morale can take a substantial hit, especially if competitors are up and running faster than you are. This can actually become a strategic differentiator.

What’s the right balance of availability vs downtime costs for your organization?

When considering a software solution for your customer communications in the digital era of instant access to information anywhere, you also need to ensure high availability. Since 100% availability is unachievable, focus on measures that will help you recover as quickly as possible.

Redundancy (extra components such as routers, servers, licenses etc.) that can be used to recover quickly from both human and system errors is the most common approach to minimizing downtime. However, according to an Actual Tech Media study, over half the companies surveyed did not have the capabilities to restore key business applications within one hour of failure.

There are many more approaches and it depends greatly on the infrastructure you already have in place. But, the first and most important step is to be informed about the risks and assess your position.

Visit us to find out how Objectif Lune could help you!

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