What Are The True Costs of Network Outages?

When reviewing your current provider across telecommunications, something to consider is the costs to your business when network outages occur. If outages are a constant issue with your provider, there are long term effects that can dictate your success (or lack thereof). Today we examine the costs of network outages. 

Technology is a wonderful thing when it works. Imagine the moments when it works seamlessly: it can connect people across the globe, enabling businesses to run smoothly, internal teams to hit performance goals and consumers to have great user experiences.

Yet, that’s not the reality for many businesses these days, is it? When you are running a business, you may have experienced the frustrations of outages, or at least your team has! It could be dealing with a website crash because of a network outage, trying to work without internet for an hour, or even having disruption to your company phone lines. The truth is, these events can have a substantial negative impact on your business. 

Here’s what you need to know about predicting the actual cost of an outage before it happens so that you can prepare accordingly.

• You’re missing out on potential revenue. Consider the many customers that cannot complete online transactions due to downtime preventing access to your site. Further to this, you may even have to deal with a large backlog of customer complaints, prompting them to buy elsewhere or leaving negative reviews. Far more concerning is that one of the highest costs to your business long term is reputational damage and customer churn.
   
• When an outage occurs, there are some apparent consequences of it affecting your bottom line. However, the not so obvious effects can be just as damaging as lost revenue. When your team members cannot collaborate due to network outages, this leads to lost productivity as they cannot do their jobs effectively. Team morale can quickly dwindle, and employee retention can be affected, making it difficult to hit the ground running when you eventually get back online if you’re instead focusing on recouping your human resource.
   
• Lastly, there is also the cost of downtime to repair, replace or upgrade hardware and software necessary for continuity of operations. This could potentially lead to a severe data breach if not correctly handled, not to mention a hefty price tag that could set you back thousands of dollars.

Network failures are expensive. The average cost per minute of downtime will depend on factors like company size and industry. Some larger industry players with plenty of money in the bank and large operating margins can suffer monumental losses into the millions. Small to medium-sized enterprises with slim margins and access to less capital will have less monetary loss but could face a much harder time recovering in the long term. The effect on your bottom line can be devastating.

When an outage strikes (and in our technologically driven world, it always eventually does), the best way to navigate the obstacles and mitigate the costs is to ensure your telco provider has your back with smart solutions from the get-go. They will understand the myriad ways an outage is costing you and should have done the research to provide you with the best infrastructure for your business, including how to mitigate the risks of downtime.

Let’s face it. Network outages are inevitable. Acknowledging this will make you that much more prepared for a future outage. We advise you to develop a contingency plan with a telecommunications provider that is right for you.