INFOGRAPHIC from application or infrastructure issues like software failures . Human error is the number one cause of downtime and the biggest offender for both scenarios .
However , there are practices that can help reduce downtime occurrences and lessen the impacts of direct and hidden costs . The research revealed an elite group of companies – the top 10 % – are more resilient than the majority of respondents , suffering less downtime , having lower total direct costs and experiencing minimal impacts from hidden costs . These organisations are defined as resilience leaders and their shared strategies and traits provide a blueprint for bouncing back faster . Resilience leaders are also more mature in their adoption of Generative AI , expanding their use of embedded Generative AI features in existing tools more than at four times the rate of other organisations .
The combined direct and hidden costs
The repercussions of downtime are not limited to a single department or cost category . To provide a multifaceted view , the report surveyed Chief Financial Officers ( CFOs ) and CMOs , as well as security , ITOps and engineering professionals to quantify the cost of downtime across several dimensions . Key findings on the impacts of downtime include :
• Revenue loss is the number one cost . Due to downtime , lost revenue was calculated as US $ 49 million annually , and it can take 75 days for that revenue to recover . The second largest cost is regulatory fines , averaging at US $ 22 million per year . Missed SLA penalties come in third at US $ 16 million .
• Diminishes shareholder value . Organisations can expect their stock price to drop by as much as 9 % after a single incident , and on average , it takes 79 days to recover .
• Drains budgets due to cyberattacks . When experiencing a ransomware attack , 67 % of surveyed CFOs advised their CEO and board of directors to pay up , either directly to the perpetrator , through insurance , a third party , or all three . The combination of ransomware and extortion payouts cost US $ 19 million annually .
• Curbs innovation velocity . 74 % of technology executives surveyed experienced delayed time-tomarket , and 64 % experienced stagnant developer productivity , as a result of downtime . Any service degradation often results in teams shifting from high-value work to applying software patches and participating in postmortems .
• Sinks lifetime value and customer confidence . Downtime can dilute customer loyalty and damage public perception . 41 % of tech executives in the report admit customers are often or always the first to detect downtime . In addition , 40 % of Chief Marketing Officers ( CMOs ) reveal that downtime both impacts customer lifetime value ( CLV ), and another 40 % say it damages reseller and / or partner relationships .
Globally , the average cost of downtime per year is more costly for US companies ( US $ 256 million ) than their global counterparts due to various factors including regulatory policies and digital infrastructure . The cost of downtime in Europe reaches US $ 198 million , and US $ 187 million in the Asia-Pacific region ( APAC ). Organisations in Europe – where workforce oversight and cyber-regulation are stricter – pay more in overtime wages ( US $ 12 million ) and to recover from backups ( US $ 9 million ). Geography also shapes how quickly an organisation recovers financially postincident . Europe and APAC hold the longest recovery times , while companies in Africa and the Middle East recover the fastest .
“ Disruption in business is unavoidable . When digital systems fail unexpectedly , companies not only lose substantial revenue and risk facing regulatory fines , they also lose customer trust and reputation ,” said Gary Steele , President of Go-to-Market , Cisco and GM , Splunk . “ How an organisation reacts , adapts and evolves to disruption is what sets it apart as a leader . A foundational building block for a resilient enterprise is a unified approach to security and observability to quickly detect and fix problems across their entire digital footprint .” p
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