The impact and associated cost of downtime can be greatly undervalued, especially as your business grows. (delete newline) This case study highlights the true costs of downtime and how to minimise its impact.
The business in question had grown untrusting of their current IT provider as they continued to suffer downtime with seemingly no responsibility taken, or actions taken to improve the situation. Attempts to resolve the issue were met with delayed responses and general avoidance.
Promises weren’t being kept and with an office of 50 employees, in the accounting industry where billable hours are everything, every hour they couldn’t work caused significant financial harm to the business.
With their help we calculated the impact on their productivity and with that figure in mind, developed a multi-step plan to not only resolve the outages, but increase the reliability and performance of their systems. Improving their resiliency of the business to a single server failure was a key project goal.
Within a few weeks of moving to our I.T. support service we had improved the server reliability, and since then we have worked with the client to migrate them to a different server configuration which helps them achieve the project goals of better performance and high resiliency. With their new systems in place they are able to get more work done and continue to grow through acquisition, without affecting performance.
Anecdotally, we were informed that they were suffering roughly one to two hours of unexpected interruption due to server and network issues each week.
With a charge rate ranging from $50/hr up to $300/hr for their high end financial services, every hour they could not work lost them an estimated $7,500, and if extrapolated as 1-2 hours per week over the year, represents a $390,000 – $780,000 impact to their billing each year. Furthermore, despite systems not working, they still were required to pay their staff, which represents another $100,000 to $200,000 of wages for staff that were just sitting there.
This is then exacerbated by losing work in progress when the interruptions happen, and delayed work or lodgements, resulting in a poor experience for their customers. The potential loss in referrals and returning customers has not yet been measured.
It was clear when first approaching this situation that either the existing provider believed it was their job to save the client money, or they did not communicate the risk of cheap solutions to the client. When assessing infrastructure costs, the price tag is not the most important aspect of a quote. Your I.T. should be considered an investment in your business and not a cost to avoid.
You should always engage with your IT provider to assess the risks of running cheaper, non-resilient infrastructure. This is especially important when you’re buying server hardware. Cloud solutions can easily be scaled larger if you go through unexpected business growth, but hardware solutions don’t always have the same flexibility.
Scoping your systems for potential future growth can help to ensure that you get a better return on your hardware investment, but even if you’ve purchased the wrong solution your investment may be able to be re-purposed. As an example, in this case the client was advised to move email services to the Office 365 cloud, which freed up resources that could be re-purposed to improve the overall system reliability.