IT Outages Cost American Companies Billions

By Jennifer Lawinski  |  Print this article Print

IT downtime is draining companies of valuable resources and revenues take a huge hit each year, according to a study from CA Technologies.

IT system downtime is leading to the loss of $26.5 billion in revenue each year for North American businesses, according to a study from CA Technologies.

Downtime reduces the average company's earning power by about 29 percent, the study found. On average, companies suffer from about 10 hours of IT downtime a year -- a total of 1.6 million hours of outage time across the country. 

The study found that even after service to critical systems is restored, another 7.5 hours of operation is compromised as lost data is recovered -- for a total of another 1.25 million lost hours. Respondents estimated that post-outage impairment cut the ability to generate revenue by an average of 17 percent.

The solution, the study said, is leveraging better data protection strategies to enable more rapid recoveries.

The study was conducted by research firm Coleman Parkes and based on 200 online interviews of IT professionals in November 2010. Respondents represented a even mix of small, midmarket and enterprise companies.

"IT organizations can’t always prevent service outages, but they can take the right steps to improve the speed of recovery when outages occur," Mike Crest, general manager, Data Management, CA Technologies, said in a statement. "This will become even more important as businesses become increasingly dependent on both traditional and cloud IT services for the ongoing generation of revenue."

Different market segments showed differences. Financial services companies lost an average of $224,297 per year while public sector losses came in considerably lower, at $99,094 annually. The difference, CA said in a statement, was due to the revenue generated in each segment as the public sector experienced greater downtime, yet doesn't generate as much revenue in the first place.

Departments most likely to experience downtime were operations (62 percent), finance (48 percent) and procurement (39 percent).