One of the most common measurements of downtime comes from lost revenue. Many organizations stop looking at the costs of downtime here. Lost revenue can be significant, but it is not the only cost to your organization from downtime or other business disruptions. Some of the other costs that result from downtime are obvious. Such as the cost of the recovery, employee wages, and even consulting fees. While other costs can be hidden or not so obvious such as lost productivity and lost clients. To track these I recently developed the Cost of Downtime Calculator.
In addition to these costs there is also potential fines, legal fees, fees based on SLA’s or contractual agreements that will be paid or penalize the business. Calculating and tracking all of these costs can be cumbersome.
I have studied several methods for calculating losses based on disruptions and downtime. Unfortunately I have also found many of them to be lacking. Sometimes they leave out lost productivity, sometimes they miss several things.
After studying these for a while I developed my own Cost of Downtime Calculator that did not leave out any of these things. I’ve also included an area in the formula to include other unforeseen costs that is the final piece of the puzzle. In addition I have added an enterprise version of this formula that allows for minimum and maximum losses based on variables. This version is also more highly detailed than the basic version.
After playing around with the formula and testing it for accuracy I developed an App called the Cost of Downtime Calculator (the enterprise version will be released later this month). It is currently available on iTunes for iPhone, iPad, and the iPod Touch. Android versions will be available soon as well.
The best part is the basic Cost of Downtime Calculator App is available for FREE.