UK business losing £682m to downtime

NEWS Downtime is set to cost UK businesses 10 million lost man-hours and E970m this year alone, as idle infrastructure and systems failures add to mounting levels of cash haemorrhaging out of the IT department. The picture across the rest of Western Europe is similarly bleak with businesses losing 39 million man-hours and E1.5bn to downtime. Added to an estimated E3.5bn which is lost through idle infrastructure and the inefficiencies of the IT department would appear to blast an enormous hole in the corporate balance sheet. According to Nicholas Jeffery, vice president of PSINet Europe, who commissioned the research, said the differentiation between idle infrastructure costs and the base cost of downtime is important. While the latter takes into consideration the cost of "your IT team running around trying to sort of the problem", the former - and more considerable cost - takes account of the fact that "idle infrastructure is non-transactional". "For every hour that your infrastructure is idle your business is losing money," Jeffery told silicon.com. He added: "The figures are phenomenal and speak for themselves but it's not just about the huge waste of time and resources but the opportunity cost involved. "When internal IT departments focus so much of their time fire-fighting problems caused by downtime, they are effectively ignoring wonderful opportunities to build additional functionality, improve systems and expand their company's connection to the market," he said. "Companies simply cannot afford to compromise on the robustness or scalability of their infrastructure as to do so means severely damaging their competitiveness in the marketplace," added Jeffery. PSINet recommends outsourcing to a trusted host as the most cost-effective way of ensuring 24x7 support and "the only realistic" option to businesses who have seen IT budgets slashed in recent years. Scott Smith, managing partner of Cumulus Research Partners, who conducted the research went further, saying in-house mismanagement is the biggest reason for these inefficiencies existing in the first place. Smith wrote in a Cumulus white paper: "The problem of downtime is magnified in-house. Companies that engage in DIY ebusiness management rather than outsource, seriously risk constraining their competitiveness which is vital in the current marketplace. When properly planned and managed throughout, a strategy to outsource infrastructure can help unlock valuable competitive factors, such as liquidity, scalability on demand, higher levels of security, increased control and optimal deployment of human resources." The research warned that customers are becoming less forgiving where downtime is concerned and urged companies to get on top of this costly flaw in their business model.