IT Systems Failures Cost Businesses 127 Million Lost Person-Hours

 Businesses collectively lose more than 127 million person-hours annually  – or an average of 545 person-hours per company – in employee productivity due to IT downtime, according to a survey sponsored by CA Technologies. This loss is equivalent to 63,500 people being unable to work for an entire year.

The survey of 2,000 organizations in North America and Europe also found that IT outages are frequent and lengthy-substantially damaging companies’ reputations, staff morale and customer loyalty. Despite this, 56% of organizations in North America and 30% in Europe don’t have a formal and comprehensive disaster recovery policy.  

Other key findings:

• Each business suffers an average of 14 hours of downtime per year, during which employees are only able to work at 63% of their usual productivity.
• After systems are back up and running, organizations lose an average of nine additional hours per year to the time it takes to recover data. During these times, employee productivity only climbs to 70%.
• 50% of organizations said IT outages damage their reputation. 18% described the impact on their reputation as "very damaging."
• 44% of respondents believe IT downtime damages staff morale, and 35% said it can adversely impact customer loyalty.
• 87% of businesses indicated that failure to recover data would be damaging to the business. 23% said this would be "disastrous."

"Avoiding IT downtime-and the resulting quantifiable costs in terms of lost hours and dollars-is absolutely critical to the performance of our business," said Zachary Slavin, IT director at Sobel Affiliates, a brokerage firm within Brown & Brown, the seventh largest independent insurance intermediary organization in the world. "Since calculating that a single hour of IT downtime results in 80 lost person-hours of work and more than $3,000 in costs, Sobel is carefully and proactively managing our business continuity strategy."

CA Technologies believes that organizations can avoid productivity losses by improving their data protection strategies and accelerating data recovery.

"There are a variety of practical and affordable steps organizations can take to protect themselves against the adverse business impact of IT outages," said Steve Fairbanks, vice president of product management, Data Management, CA Technologies. "Given that these outages are a fact of life-and that some of the consequences of outages can be irreversible-investments in improved business continuity are extremely worthwhile."

These survey results represent the next phase in a study which earlier found that North American businesses lose $26.5 billion annually from avoidable downtime.  

About the survey
The survey was conducted by an research firm, Coleman Parkes. All interviews were undertaken during November 2010. The survey was based on a total of 200 online interviews amongst CIOs/IT Directors/IT Managers and a small proportion of COOs/Operations Directors across an even split of small (50-499 employees), medium (500-999 employees) and large (1000+ employees) companies.

Calculating lost productivity
The total number of man hours lost due to avoidable IT outages takes into account the total number of hours of downtime when systems are offline, the total number of hours between system restoration and recovery of all data, the impact on staff productivity during both of these periods, the number of staff affected and the overall number of avoidable IT outages a year.