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Downtime Costs   Message List  
Reply | Forward Message #6064 of 6519 |
Re: [discussbusinesscontinuity] Downtime Costs

I agree with Bob Cohen on where to start, but you may want to have the requestor of the downtime figures explain more about what they are looking for.
 
Being the over-thinker I am, I can see lots of costs that the requestor may not be interested in.
 
 
Perhaps the requestor is just asking for the simplest figures, so give them a few options:
 
Total cost of downtime - large effort involving a detailed analysis of the value chain, when IT fails dept A can't work but who does dept A support who also can't work, how many customers walk out when IT fails?  What are the opportunity costs?  What impact on vendors and deliveries and transportation/distribution?  Potential law suits from franchisees for not meeting SLAs or franchise fee reimbursements over lost sales.
 
Tangible and intangible cost of downtime - involving lost revenues and stuff like customer satisfaction
 
Simple cost of downtime - your sales divided by hours
 
 
Another thing to consider is that when two companies merge and people start talking about costs, they are usually looking for ways to reduce it.
Management may swear that the two companies will be autonomous for ever, but unless they are totally separate markets, management will be looking to reduce redundancy and costs.
The IT with the higher cost of downtime can be a way to determine which IT they can best do without - the one with the lower cost of downtime.
 
You probably haven't done one for your own company, so you'll want to consider management asking for the same figures for your own company to help them make their decisions.
Their assumption may be that the larger company has the higher cost of downtime, so you may want to just go ahead and have a comparision of the two IT depts.
 
Hope that helps.
Bill Lang.
 
 
 
 
----- Original Message -----
From: B C
Sent: Thursday, December 18, 2008 11:01 AM
Subject: Re: [discussbusinesscontinuity] Downtime Costs

Good Morning Bill

That is a difficult problem.  First, I suggest conducting a BIA to determine which applications directly impact/generate revenue, to include any sales made through your website.  Then you'll be able to prioritize all applications based on that impact to revenue, which will reap dividends when developing your plan.  Then I'd suggest working with the people that process sales through the applicable applications to see the sales volume.  (If you see ebbs and flows that would also be a good thing to know - so management can determine if/when RTOs can be extended because it's "that time of the year")  From the sales volume you should be able to determine the hourly revenue loss.  The bottom line is you can't do this by yourself or in a vacuum, talk to the experts.  After you get your bottom line figure, I suggest running this back through your experts so you have their buy-in when you brief management on your findings and can include that buy-in during your brief.  I hope this helps.  If you have any additional questions please feel free to contact me directly at bc2_llc@comcast.net

Bob Cohen, CBCP, CCM, CBRM 


--- On Thu, 12/18/08, Perschke, Bill <BPerschke@cskauto.com> wrote:
From: Perschke, Bill <BPerschke@cskauto.com>
Subject: [discussbusinesscontinuity] Downtime Costs
To: discussbusinesscontinuity@yahoogroups.com
Date: Thursday, December 18, 2008, 11:23 AM

Our company has just merged with another larger company of the same type.

We are a chain of retail/wholesale auto parts stores.

I have been asked to determine the cost per downtime IT hour at the new corporate headquarters.

Could anyone make recommendations as to how to go about doing this?

I know there are average statistics for many types of companies available.

I know a lot more must go into this than just dividing the gross sales by the number of open hours for the business.

It seems that there would be so many variables it would be difficult to determine this.

Any help or direction would be greatly appreciated.

Thanks,

Bill Perschke

Governance/Business Continuity Coordinator

Bperschke@cskauto. com 




Sat Dec 20, 2008 5:38 pm

wrlang1977
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Our company has just merged with another larger company of the same type. We are a chain of retail/wholesale auto parts stores. I have been asked to determine...
Perschke, Bill
cskdrman
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Dec 18, 2008
4:46 pm

Good Morning Bill That is a difficult problem.  First, I suggest conducting a BIA to determine which applications directly impact/generate revenue, to include...
B C
bobc1512004
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Dec 18, 2008
5:24 pm

I agree with Bob Cohen on where to start, but you may want to have the requestor of the downtime figures explain more about what they are looking for. Being...
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Dec 21, 2008
8:30 am

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Dec 23, 2008
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