“Counting the cost”

Business Continuity Awareness week is this week, the 17th-23rd March 2014. The theme “counting the cost” is designed to demonstrate the potential cost of not having an effective business continuity management solution.
We’ve therefore calculate the cost of IT downtime so it is as accurate as possible, allowing you to justify whether or not it’s worth investing in for your business. This has been surprisingly difficult, firstly because all of the statistics we have found on the internet have no reference source and seem to all point to each other so we don’t know if they are accurate, secondly because they vary so wildly. To quantify this statement, the annual cost of IT downtime for a mid-sized company ranges from £200,000 to £4million depending on which non-referenced sources you use. Our conclusion is that we can’t rely on these statistics and we need to spend a bit more time and effort calculating it properly.

So we did. We compiled a survey and interviewed IT decision makers at Cloud Expo Europe 2014. This gave us accurate and up to date statistics on the business continuity strategies that people are using, and combined this with research from CA Technologies on the cost of downtime to give you the results.

The results

According to our research, 59% of people don’t have a physical or virtual standby solution for the IT systems. These businesses are are running a risk that their IT system won’t be recovered in a disaster. Only 52% of companies interviewed successfully recovered their systems when they last tested them*. We can therefore split the cost of an IT disaster into 2 camps:
a). Companies that have tested physical or virtual standby solutions and where systems are recovered within 3 hours. For a business that is fully recovered within 3 hours, the costs of IT downtime is £56,000 per annum (cost calculated based on CA Technologies hourly downtime cost).
b). Companies that experience problems with IT recoveries as they have untested and unreliable backup solutions. A business of 50 employees that doesn’t have a guaranteed recovery method loses an average of 552 man/hours per annum due to IT downtime and data recovery. The cost to them according to CA Technologies is £208,000 per annum*

Is it worthwhile having a business continuity plan?

48% of people are therefore paying £152,000 a year too much on IT downtime. These are the companies that don’t have a tested, reliable physical or virtual standby solution. The statistics say that these options will save you £152,000 a year. A physical standby solution is costly however, and could start to negate the cost savings if you include the maintenance and testing time on top of the capital outlay. Managed virtual standby solutions cost around £150 a month per server, so still leave plenty of savings to make it worthwhile.

* Plan B research carried out at Cloud Expo Europe Feb 2014. www.planb.co.uk
* http://www.ca.com/~/media/Files/SupportingPieces/acd_report_110110.ashx

By Tim Dunger