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Real-world business continuity: The soaring costs of downtime

Eric Tabor  |  March 27, 2014

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Many organizations approach business continuity as an afterthought. When a company is building up its hardware footprint and application investments in support of its growing business model, contingency plans are often relegated to the backseat and linger there. These organizations find out too late about the costs of prolonged downtime and the difficulty involved in righting the ship only in the aftermath of an unplanned event. One recent report offers some fairly chilling statistics about widespread shortcomings and expensive consequences of ignoring business continuity planning.

The Ponemon Institute report on the cost of data center outages in 2013 found that organizations lose $7,900 per minute of downtime. The mean cost of a single data center outage is $627,418 and the maximum amount lost to a single incident was more than $1.7 million. The total and per-minute costs correlated to the size of the facility and the duration of the outage, while IT equipment failure represented the most expensive root cause of unplanned data center downtime. Financial hits were worse for companies in data center-dependent industries such as e-commerce, financial services and telecommunications.

Costs can quickly escalate as a business recovers from an unplanned incident. From detection and containment to lost revenues and dwindled productivity, the expenditures can be immense. An organization will suffer more for each area of its business continuity planning that is lackluster or poorly thought out. 

These findings convey the importance of having an effective business continuity approach in place. The approach is twofold – prevention and recovery. Eliminating root causes of downtime is vital, especially in the case of expensive ones like IT equipment that can be more effectively managed. Visibility and redundancy can help streamline efforts to get the system back on track following a surprise incident.

Virtualization can be a great asset to both aspects of business continuity planning, as a recent CIO.com webinar pointed out. It provides a more manageable, agile environment for continuity efforts, mitigates hardware vulnerabilities by slashing equipment needs and helps a company access its safely stored systems and applications immediately following an unplanned occurrence.

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Eric Tabor

Chief of Staff | Vice President- Strategy & Operations at ISG Technology
Eric joined ISG Technology in 2012 bringing with him experience from ISG’s parent company, Twin Valley Telephone, Inc. He is a member of the Twin Valley senior management team that managed the company’s organic and acquisition growth strategies resulting in the company tripling in size from 2005-2010. Prior to joining Twin Valley he held sales and operations leadership roles at Southwestern Bell/SBC in multiple Midwest locations. He holds a B.A. in Mass Media and Communications from Washburn University. Eric currently resides in Olathe, KS with his wife and their two children.
About

Eric joined ISG Technology in 2012 bringing with him experience from ISG’s parent company, Twin Valley Telephone, Inc. He is a member of the Twin Valley senior management team that managed the company’s organic and acquisition growth strategies resulting in the company tripling in size from 2005-2010. Prior to joining Twin Valley he held sales and operations leadership roles at Southwestern Bell/SBC in multiple Midwest locations. He holds a B.A. in Mass Media and Communications from Washburn University. Eric currently resides in Olathe, KS with his wife and their two children.

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