The True Cost of IT Downtime

Andy at S2 Computers

The primitive economic principle underpinning any business is revenue – costs = profit. Your business will have plenty of factors to be taken into consideration in order for that base sum to work in your favour, and your profit will usually vary daily, monthly or annually depending on foreseen, and unforeseen circumstances such as seasonal changes, customer demand, supplier costs etc. Hopefully, you have a good accountant and a business savvy director who can pinpoint changes in the market and project potential profits throughout the fiscal year. IT downtime, however, is an unforeseen drain on revenue which is difficult to attribute a cost to.

Many businesses rely on IT to keep everything running smoothly. It could be that only your accountant works on a computer, or perhaps just your Director, Managers and Payroll, perhaps every employee uses IT to some degree, or maybe your whole business operates using IT. However much you use IT, there is always an associated cost when things go wrong. What varies is how much that cost is to your business.

Let’s talk numbers
The estimated cost to your business can be worked out with a calculation which factors in how much you pay your employees, and how much revenue your business takes each year. Of course, accurate figures would also consider the extent of the issue; if you’re a writer and your internet goes down, you might be ok to continue working, albeit with inconvenience, if you’re a call centre working on a web-based data management system, internet issues could grind your business to a halt and you may even lose potential customers.

This is the raw calculation:

Employee cost per hour + Revenue earned per hour = Approximate cost of IT downtime

So, for example, if an average employee salary is £24,000.00 per year, the estimated annual cost to you (with Employer NI of 13.8%) is £27,312.00, which is approx. £13.13 per hour. If your estimated annual revenue is £250,000, your hourly revenue is approx. £120.19.

Employee cost per hour (£13.13) + Revenue earned per hour (£120.19) = Approximate cost of IT downtime per hour (£133.32)*

So, working in a small, IT-dependent business, with between 15-20 employees, you could be losing approx. £2000 – £2666 of revenue per hour of IT downtime.

How managed IT support can save you money
So, now you know how much money you could lose with IT downtime, it might be time to look at a more cost-effective solution. Managed IT services offer you a pro-active, efficient, local, IT support package which ensures that your IT downtime is at its very minimum. We’ll monitor your IT remotely, so we’re usually aware of an issue before you are. We’ll get straight on it and often we’ll have it identified, diagnosed and resolved before you’ve even noticed. No downtime = more revenue, simple.

If you’re interested in saving your business’ profits and reducing your downtime, give Andy at S2 Computers a call and we’ll help find an IT support solution to match your business.​

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