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How Do System Downtimes & Disruptions Affect Your Business?

Updated: Jul 24


As modern-day businesses become more dependent on technological systems, it is increasingly important that their servers and systems work efficiently 24/7; otherwise, the company will incur costs beyond inconvenience.


In this article, we will explain unscheduled downtimes and how they affect your business.


What is unscheduled downtime, and why does it occur?


Downtime is when an IT system is not operational or available for use.


All computer systems require some downtime so that upgrades and repairs can be made. Hence, some scheduled downtime, typically during off-hours, is to be expected.


On the other hand, unscheduled downtimes happen out of the blue and are undesirable and costly. They are typically caused by hardware or software failures, human errors, and cyberattacks.


While businesses in the past could revert to manual methods of operations whenever there was a system outage, businesses today cannot do the same because their operations are too integrated into the IT systems.


1. Lost sales


Today, a significant portion of B2B and B2C transactions are carried out over the network.


Downtimes are thus a significant hindrance to the business: customers cannot utilize your services or contact support, and you cannot process payments or communicate with your unhappy customers. Given the scale of your business, this may affect hundreds or even thousands of customers.


Customers today, who are used to keeping up with a fast-paced world, are unlikely to wait it out. Instead, they may forget about the purchase or turn to your competitors. The longer the disruption lasts, the more sales you lose. Hence, your revenue takes a hit when an unscheduled downtime occurs.


2. Reduced productivity


Downtimes don't just affect your customers; they affect your employees as well.


Most businesses today rely on online communications and services, such as email or cloud-based applications. When there are IT disruptions, such as when a computer screen displays the blue screen of death, employees cannot continue with their work, leading to a loss of productivity. If the business is part of a supply chain, a domino effect will affect all companies involved.


Notably, the costs associated with these employees are fixed: you cannot reduce the money spent on rent or employee salaries according to the time wasted. Loss of productivity is, therefore, a costly experience.


3. SLA costs


Most business-to-business relationships require a service level agreement (SLA). SLAs indicate to clients that the service provider is reliable as they agree to meet an agreed-upon standard of service. Those who cannot fulfill their promises are to pay clients a penalty.

One standard assurance in an SLA is uptime; many businesses guarantee that their services are available for a certain amount of time each year. Thus, unscheduled downtimes result in financial penalties.


4. Reputational damage


Even if the affected business compensates clients and customers for downtime, reputational costs still exist.


If you take too much time to resume operations, you may lose your existing clients and customers and gain a reputation for being unreliable. Unhappy customers may vent their frustrations on social media, harming the brand's reputation. Hence, you will experience difficulties in engaging new clients.


5. Lost or compromised data


Network failures may lead to essential data being inaccessible. It may also damage or corrupt files, affecting your ability to operate normally.


Additionally, network failures can lead to lapses in cybersecurity, allowing cybercriminals a foot in the door. Therefore, businesses may become vulnerable to attacks that compromise sensitive data. This lapse would affect the customer's trust in the business, leading to reputational damage.


Conclusion

IT failures and downtimes have a significant impact on your business. The best way to insulate your business from the consequences of unplanned downtimes is to take a proactive approach to protect your systems and operations.


Hence, it helps to engage IT Management Services, which ensures the smooth functioning of your IT systems. If you're looking for IT support in Singapore, check out IT Block. We are one of the leading Managed Service Providers locally which provides IT services like on-site support, maintenance, and colocation services.

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