My name is Dale Allen. I have more than 20 years of experience in the Information Technology field. With all those years of experience, I am qualified to tell you that it is not a matter of “IF” your Computer or computer network will fail, it is a matter of “WHEN” it will fail. Computers and computer networks fail for many reasons.

 Lost information and asset costs can include:

▪ System downtime

▪ Staff (both those affected by the downtime and those assisting in the recovery effort)

▪ Hardware/software replacement

▪ Lost business

▪ Lost information and information recovery

▪ Incidentals (such as unplanned operational expenses)

▪ Legal aid or penalties

▪ Market reputation (which is often the most intangible and difficult to determine)

▪ Market recovery (such as public relations activities)

 The questions you have to ask yourself are:

• Are you prepared for a Disaster? 
• How much will loss of data cost you and how much will down time cost you?
• Do you have a written and tested plan to recover from a disaster? 
• Do you have daily offsite backups?
• If a new unknown virus hits you, can you recover?

Most business managers today say “no” to most of these questions.  Small business owners are especially prone to “go without”.

And did you know there is a formula to calculate the cost of downtime and loss of business for your company, no matter how small or how large it is?

There are two main types of downtime losses: productivity and business.

·         Productivity losses can affect individual users or entire workgroups. Productivity downtime affects applications, processes that evolve around those applications and departments that use them.

·         Business losses constitute missed sales opportunities, lost revenue, loss of customer confidence, and negative publicity, which in turn affects market reputation. Furthermore, legal issues can arise if downtime affects loss or exposure of critical data or service level agreements.

 Duration of either loss can compound the downtime cost significantly.

Downtime Productivity Loss Formula

Productivity losses can be determined by using the following formula:

        ▪ Downtime Productivity Loss = (Number of users affected) x (Effect on productivity, as percentage) x (Average salary per hour) x (Duration of downtime)

Downtime Business Loss Formula

Business losses can be determined by using the following formulas:

        ▪ Downtime Business Loss = (Number of users affected) x (Effect on productivity, as percentage) x (Average profit per employee per hour) x (Duration of downtime)

        ▪ OR

        ▪ Downtime Business Loss = (Number of transactions per hour) x (Affected transactions, as percentage) x (Average profit per transaction) x (Duration of downtime)

Probable Downtime Cost Formula

Determining probable downtime cost can be calculated by using the following formula:

        ▪ Probable Downtime Cost = (Probability of event, as percentage) x (Estimated duration, in hours) x (Cost per downtime hour)

Conclusion

Quantifying downtime costs is difficult, since the choices are to either predict the unknown, or wait until a security incident occurs and evaluate the damage. However, companies can evaluate their current assets, assess the risks associated with those assets, identify the probability of a security incident, and estimate the associated financial impact. These predicted expenses can help justify the security initiatives necessary to protect an enterprise’s assets, mitigating the risk of downtime and increasing productivity and business cost savings. Furthermore, although prevention is the best policy, creating a detailed response plan will help any enterprise deal more effectively with downtime if it does occur, assuming a quicker recovery, minimized costs, and shorter duration.

I would be happy to assist you and check your current information systems to insure you have the required components for cost justifying System Fault Tolerance in your organization.  I can use the formula above to evaluate your current system or I can modify your current system or I can build a system from scratch to justify the exact amount of money your company needs to spend on System Fault Tolerance.

 I am happy to help your company be as productive as it possibly can be using technology as a tool.

Sincerely,
Dale Allen
Dale Allen

 Contact me, Dale Allen  today for your total backup solution.  

• Cost estimating a potential disaster 
• Selecting a Backup Strategy
• Differential Backup's
• Incremental Backup's
• Protecting your Data
• Tower of Hanoi Tape Rotation
• Protecting your investments home page
• Check out our blog at www.daleallen.net where Robert Pajak has written an article about backups.

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