Downtime: Planned versus unplanned (part one)

Several crucial factors determine the success of a company. In the current digital economy, having reliable systems is key. Downtime of systems seriously affects business success, depending on the frequency and duration.
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Despite the efforts invested in a company’s IT infrastructure, many organizations continue to face downtime incidents when their systems are unavailable or offline. Downtime can happen to databases, hardware, and software, and it can last seconds or even days and weeks. When one of the services goes down, a part of the company can shut down completely, resulting in huge losses. Every minute a business unit is down, it costs money.

Different types of downtime

Planned downtime

Many things can cause downtime, and it can be planned or unplanned. Planned downtime is announced beforehand due to maintenance or updates. The impact of planned downtime can be kept to a minimum by running services on a backup server or during slow traffic hours.

Unplanned downtime

There is also unplanned downtime, occurring unexpectedly, most often due to defective components, software crashes (also caused by viruses), natural disasters, power failures, disruptions at the internet provider, or human error. According to the Visible Ops Handbook of the IT Process Institute, 80% of unplanned failures are due to poorly planned changes or incorrect configurations made by IT administrators.

Unplanned downtime can also happen during DDoS (Distributed Denial of Service) attacks. During a DDoS attack, hackers send enormous amounts of bandwidth to a server, slowing it down or blocking it completely.

DDoS attacks are becoming increasingly common. According to NBIP, a joint venture between internet providers, the number of DDoS attacks has sharply risen in recent years. In 2018 this number grew by 15% compared to the year before. ING and ABN AMRO, for example, became victims of DDoS attacks several times. The servers became overloaded, affecting consumers, online stores, and services.

The consequences of downtime

Disruptions and downtime are still a significant threat to the IT world with major consequences. Entire organizations can suffer from the financial pain caused by the effects of downtime, with noticeable direct effects such as loss of turnover and reputation damage, and indirect effects such as productivity loss. Loss of production occurs when employees cannot access the systems and are unable to work.

Downtime of an internal business application can lead to different types of losses:

  • Loss of the application service: downtime impact varies depending on application and server dependence. Business processes stop, and certain activities cannot be carried out.
  • Data loss: a system failure can result in data loss, having significant legal and financial ramifications.
Downtime of a website influences the customer’s purchasing process and affects:
  • Profitability: this is the most direct effect; the webpage is not available, so no transactions can occur.
  • User confidence and loyalty: if a webpage is not available, the customers or users go to another supplier while reducing confidence in the brand/company.

Financial consequences

It is challenging to quantify the impact of such disruptions in terms of costs. However, downtime is becoming more and more expensive because of increasing dependence on online systems. The costs of downtime vary and depend, among other things, on the company size and industry. The role of IT systems within business operations is also crucial. For companies that depend solely on delivering to customers from IT and network services, such as telecommunication service providers or e-commerce companies, downtime can lead to remarkably high costs.

When Facebook, Instagram, and Whatsapp went down globally for a few hours in early 2019 due to an incorrect configuration on a server, the price of the shares fell by 1.4% the next day (The Street, 2019).

In addition, the repair costs must also be taken into account – whether it’s the cost of repairing the equipment, recovering from lost profit, or potential overtime for employees to recover lost work.

In conclusion

Organizations need to identify the bottlenecks in their systems and the possible consequences or costs of downtime. Only then can you work on a solution to minimize downtime as much as possible.

In the next part of this blog, we discuss further how downtime can be minimized.

References:
Behr, K., Kim, G., & Spafford, G. (2005). The Visible Ops Handbook: Implementing ITIL in 4 Practical and Auditable Steps, Information Technology Process Institute.
Nu.nl, (26 april, 2019). ‘Aantal cyberaanvallen op bedrijven afgelopen jaar flink gestegen’.
Wang, N., (March 14, 2019). Facebook Shares Fall as Outages Persist; Firm Says Systems ‘Are Recovering’. The issues accessing Facebook, Instagram, and WhatsApp continued into a second day on Thursday.
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