No, I’m not talking about the short-term cost savings. These aren’t savings you will have in project, capital or software fees if you don’t implement DR!
I’m talking about what’s the cost, and I mean the true cost to your business. What happens if you suffer an outage and you can’t “hand on heart” rely on your DR solution.
The market is definitely maturing in relation to DR. It’s becoming easier to get businesses to buy into the importance of catering for DR. It still isn’t a mandatory item yet though. I constantly see people putting applications into production with little or no thought to business continuity or DR.
Whatever Luke, Disasters Hardly Ever Happen
Pfffft there’s never been a tsunami, flood or earthquake near me…
The data for this infographic was collected by Zerto and had 125 survey participants.
As you see, nearly half the companies surveyed had an outage in the past year. 95% of those outages were not caused by natural disasters!
So, disasters DO happen and you need to make sure you start protecting your business accordingly.
How do you even measure the cost for the outage period?
Ok so we now can see that outages do occur so let’s see if we can determine what that might cost the business.
Let’s assume Company X has a $35 million yearly revenue. Their company’s servers were down for 4 hours affecting 85% of their business. Doesn’t sound like a big deal on the surface until we dig a little deeper into the business itself.
We can use the following formula to determine a rough immediate cost to the business;
Lost Revenue = (GR/TH) x I x H
- GR = Gross yearly revenue
- TH = Total yearly business hours
- I = Percentage impact
- H = Numbers of hours of outage
So, in our example above (35 million/2080)*0.85*4 will mean that in this instance the DR event has cost the company $57,211.
Now we are talking about numbers that the business will start to take notice of!
What are the long-term effects from the outage?
If you’re reading this and you’re in Australia then you will be intimately aware of the Australian Taxation Departments woes (https://www.itnews.com.au/news/atos-online-outage-to-enter-its-third-day-449800).
What we can take away from this is that an outage will stick around. It will be visible LONG after the actual disaster has been rectified. Whilst it has been a months since the outage and I still hear about it weekly.
Impossible to measure but have a think about what a visible outage like that will do to your brand. Think of the company’s reputation and customer loyalty in the long term.
What would you do in this scenario?
You want to change credit cards and are deciding between Bank A, B and C. You go through some online reviews and then head to each banks website to see what deals are on offer. What would you personally do if the Bank B website didn’t immediately load?
For me that would mean it immediately gets removed as an option for my new credit card provider. I would also likely remember that it didn’t load for years to come. It would be very hard for the bank to recover in my eyes. In all likelihood, the website outage would’ve had no bearing on whether the credit card would be good fit.
As we can see, outages DO happen and they aren’t always tsunamis. They’re generally upgrades or installs gone wrong. When they do happen, they can cost your company a considerable amount of money. It could damage your brand and continue to affect you for years to come. God forbid it could even destroy your company depending on your size and the industry you are in.
DR solutions are so economical and easy to implement these days. You really would be stupid to not include it as a mandatory item when deploying any new application.
Delve more into DR with the following articles;