European firms losing €17bn through IT downtime

14 Sep 2010

European organisations are collectively losing more than €17bn in revenue each year from the time taken to recover from IT downtime – that’s the equivalent of 13.5pc of the proposed EU budget for 2011.

The CA Technologies Avoidable Cost of Downtime 2010 Report illustrates that the financial losses associated with IT outages quickly escalate the longer organisations take to fix them.

CA Technologies believes much of this considerable cost to business and the economy can be avoided through better data protection strategies that focus on the speed of data recovery.

The survey of 1,808 organisations across 11 European countries reveals that each suffers an average of 14 hours of IT downtime a year, which equates to almost 1 million hours across Europe.

The UK experienced the most downtime, with an average per organisation of 27 hours a year, whereas in Belgium’s average downtime per organisation was only eight hours a year.

Other key findings from the Avoidable Cost of Downtime 2010 Report:

·        Two-thirds (66pc) of the organisations surveyed said the IT systems and applications effected by IT outages were mission critical.

·        The departments most likely to suffer during downtime were operations (60pc), finance (44pc) and sales (42pc).

Impact on revenues

During these periods, when business-critical systems are interrupted, European organisations estimate that their ability to generate revenue is reduced by a third (32pc).

Of the countries surveyed, companies in France experienced the highest average revenue loss from downtime at nearly €500,000 a year. Italy experienced the lowest at just under €34,000.

“The smooth running of IT is critical for many organisations in today’s fragile economic climate and any degradation in service not only affects employee productivity, but also can be very visible to customers,” said Chris Ross, vice-president EMEA and Asia-Pacific, Recovery Management and Data Modelling Customer Solutions Unit, CA Technologies.

“With companies increasingly dependent on online services to generate revenue or provide an essential channel of customer communication, the financial impact of outages is becoming a critical issue.

“Fortunately, much of this cost is avoidable – organisations can tackle it through a re-evaluation of their disaster recovery strategy. Doing so could have a direct impact on their financial position and help them manage their emergence from the recession,” Ross added.

The CA Technologies Avoidable Cost of Downtime 2010 Report also reveals that post-IT downtime, when IT systems are up and running, there is an additional delay of nine hours per year at each organisation, during which time data is still being recovered.

Across Europe, that’s another 600,000 hours when business operations aren’t fully operational. In this post-outage period when data recovery is taking place, company revenue generation is still severely hampered, down by an average of 25pc.

Data protection weaknesses

“Many organisations endure longer than necessary interruptions to their IT systems, because their data protection policies aren’t robust enough,” continued Ross.

“Organisations often focus their efforts on backing up data securely while neglecting to consider how quickly they can recover their data in the event of a failure.

“This ‘speed of recovery’ is a good starting point for organisations planning or re-evaluating their disaster recovery needs. With the correct data recovery and back-up solution, organisations can redress this balance, and ultimately save money and increase competitiveness.” 

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years