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Companies ignore IT downtime at their own perils

Global Switch, a provider of purpose-built high-specification data centres, has released findings from its latest pan-European survey, warning of a mismatch between the growing importance of customer and stakeholder confidence and companies attitudes towards the impact of IT downtime on corporate reputation.

In a climate where corporate reputation and customer confidence are increasingly written into global strategy and objectives, the survey, conducted by Vanson Bourne for Global Switch, found that 74% of the companies polled across banking, retail and other commercial sectors, measured the cost of IT downtime in terms of lost man-hours.

Conversely, only 62% of respondents considered the impact on customer and stakeholder confidence when counting the cost of outages. Alarmingly, 10% of the businesses surveyed confessed to not measuring the cost of downtime at all.

The survey also found that the online community lags behind its more traditional counterparts, with 73% of online businesses calculating the cost of downtime using man-hours and of these, only 45% consider the damage to stakeholder and customer confidence.

Attitudes across Europe also differ when it comes to the impact of downtime on corporate reputation. Spanish companies came out on top, giving equal importance (75%) to the loss of man-hours and impact on customer confidence when measuring the effect of outages. French businesses followed, with 70% including customer confidence in their calculations, while 64% of Dutch businesses considered the damage to customer confidence in their cost analyses. However, UK and German companies appeared the most myopic, with only 56% and 54% respectively recognising the impact of IT downtime on corporate reputation.

Paul van der Hilst, European Director at Global Switch, commented on the findings, "In an age where companies are spending millions on IT systems which help them to get closer to their customers and track their every interaction, it is alarming that this crucial element is ignored by so many when counting the cost of IT downtime."

Van der Hilst continued, "One reason for this may be that companies either don't make the link between an outage and corporate image, or that they simply do not know how to measure the financial damage in terms of loss of reputation. Lost man-hours are perhaps an easier metric to use but by ignoring other criteria, companies risk being unaware of the longer term implications of system failure."

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.