Measuring the Cost of Downtime

Have you ever tried to get an infrastructure project funded only to discover that it is like “pulling teeth” to get your senior manager’s approval?

If so, it is probably because your senior manager is having major difficulty understanding what you are talking about. All he hears is that you are asking for lots of money, and that’s not something he lets go of without understanding the value of what he will receive from the investment.

Senior executives normally do not understand technology, and they don’t want to.

Well, if that’s the case, how do you get a technology project funded that’s critical for the stability and support of your infrastructure? You know how important it is but you aren’t getting the message across to your boss, the CEO.

Something that will help is to discuss the project in terms of business value, , , and certainly not in technical terms.

Discuss “WHY”, not “WHAT”!

“WHY” deals with benefits, i.e., business value. “WHAT” deals with technology.

Unfortunately as former technical people, IT managers tend to discuss the “What” and not the “WHY”. It’s a guaranteed way to put your CEO to sleep or give him a major headache.

Business value includes one or more of five very specific things:
– Increase revenue
– Decrease cost
– Improve productivity
– Differentiate the company
– Improve client satisfaction

When you change your presentation to highlight the business value your company will receive by making the infrastructure investment, your senior manager hears and understands you, and when this happens, he makes a decision that usually goes your way if there is sufficient value for the investment.

A tool that can help significantly is to paint a picture of the ‘cost of downtime’ that your project recommendation will help eliminate.

Calculating “cost of downtime” is straightforward, but first you need to visualize what we are talking about. Below is a simple infrastructure scenario:

cost of downtime template

 

 

 

 

 

 

 

In this example, we literally “paint a downtime picture” to show the following:
– Corporate HQ Office is home of the Data Center where there are three servers.
– There are five remote offices (Atlanta, Denver, New York, etc.)
– In each office we list the number of Users (500 at HQ, 100 in Atlanta, etc.)
– We estimate the average salary of a company employee is $20/hour.
– The green filled circles are routers.
– Three Downtime scenarios are highlighted:
o If the Atlanta office router goes down or they lose connectivity, the productivity loss at 100% is $2,000/hour.
o If the HQ router goes down (green filled circle on the Corporate HQ box), all remote offices lose connectivity and 100% productivity         impact will be $20,000/hour.
o If the E-mail server crashes it affects productivity of all 1,500 workers. At 10% productivity factor, the impact is $3,000/hour.

Using these assumptions you can quantify the ‘cost of downtime’ for any component in your company, even a zone printer or a single PC.

Once you and your client can visualize the downtime scenario we created above, you can list key components in a downtime chart and refer to it when trying to justify an infrastructure project.

Download Mike’s Cost of Downtime Template Here for Free!

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