Businesses can and will face emergency situations – any incident that has an impact on an organisation’s business continuity has the potential to escalate into a crisis. Crisis situations involving IT downtime can range from routine IT and operational incidents to sophisticated cyberattacks and acts of nature such as a flooded server room or power outage.
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While these events cannot be avoided, organisations can manage and minimise the physical, financial and reputational damage of a crisis by proactively implementing effective cloud-based systems and procedures to cope with periods of IT downtime.
The new threat landscape
Cyberattacks are becoming increasingly common. The number of companies reporting distributed denial of service (DDOS) attacks has been doubling year on year. According to the 2015 report from the Ponemon Institute, ‘2015 Cost of Cyber Crime Study: United Kingdom’, cyberattacks cost businesses on average £4.1 million per incident and incidents take an average of 31 days to resolve.
If internal systems are compromised, what will be the cost of reduced productivity? Losses in the areas of labour, revenue, and service all contribute to the total cost of an IT outage.
Businesses are unable to go on hold for a month to resolve a cyberattack; which is why companies need an alternative to the internal network that enables them to communicate quickly and effectively in the event of a breach. The best way to achieve this is to implement a cloud-based communications platform that has the security, reliability and scalability to communicate effectively when an organisation’s internal network is compromised.
The cost of a crisis
Generally the cost of IT downtime can be distilled into two key areas: productivity loss and revenue loss. North American Systems International (NASI) recently looked at these issues, and provided companies with a formula to quantify each of these loss areas as a starting point for calculating the total cost of IT downtime.
The formula given by NASI to calculate losses resulting from reduced employee productivity during an IT outage is P x E x R x H, where P is the number of employees affected; E is the average percentage they are affected; R is the average employee cost per hour and H is the number of hours of the outage.
Revenue lost to an IT outage can also be calculated. The formula in this instance is (GR/TH) x I x H. In this calculation GR is the business’ gross yearly revenue; TH is the total yearly business hours; I is the percentage impact and H is the number of hours of the outage.
In a practical example, if a retailer that generates 50 per cent of its revenue online for a gross yearly revenue of £2.4 billion, IT downtime will cost that company more than £2,000 every minute.
IT outages usually lead to a flow of related costs, and a cost analysis should also include factors such as late delivery surcharges, overtime costs, loss of customers, additional marketing costs and impact on share price. It is easy to see how the cost of an IT outage can lead to a business crisis.
The central role of the cloud
Communication is critical during periods of IT downtime if the impact on key areas is to be minimised. By reducing the time between knowing there is a problem and solving that problem, businesses can significantly limit damages. Effective communication in crisis situations depends on two factors: delivering the right message to the right individual, and receiving an acknowledgement that the message has been delivered and actioned.
For example if an organisation faces a cyberattack it will need to send both internal and external notifications. Internal experts will need to be located and informed of the issue instantly so the situation can be assessed and immediate action can be taken. Customers might need to be informed early to protect consumer confidence and brand reputation.
A SaaS cloud-based platform will enable a business to notify every relevant employee quickly, regardless of the extent of the impact on the internal network. Responses to the notification can be received within minutes and the business will know who is available to fix an issue and where they are located. By allocating responsibilities to the nearest people with the right skills the impact of the issue on the business – its revenue, productivity and reputation – will be substantially minimised.
To assure critical communications during system downtime, major service disruptions, and even complete network breach, an organisation’s critical communications platform must be completely separate to its normal network and utilising SaaS-based cloud tools is the best way of ensuring this, and subsequently effective communications during a crisis.
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A unified critical communications system needs to be easily adaptable to effectively manage a future crisis. Customers, employees and stakeholders are increasingly connected and businesses need the ability to communicate critical information to a wide range of individuals quickly and reliably during an emergency situation or periods of IT downtime. By implementing cloud-based SaaS tools, organisations can ensure an effective plan is in place before the crisis occurs; if organisations are proactive, resulting losses can be minimised.