The Costs, Causes and Consequences of Unplanned Downtime
Did you know that the implications and causes of unplanned downtime are varied and wide-reaching? This includes the fact that on average, organizations have experienced two episodes of unplanned downtime over the past three years! Also, according to an Aberdeen report, just one hour of unplanned downtime costs an organization $260,000 on average!
There are many key impacts of unplanned outages including not being able to deliver services to customers and losing production time on critical assets. When it comes to the causes of unplanned downtime, hardware and software failures or malfunctions are commonly reported as the root cause but user error is also to blame.
Is your organization one of the 88% that believes that it could improve practices when it comes to preventing downtime in general? Are their gaps in the awareness of your organization’s personnel with regard to when assets are due to be replaced? Does your organization fully understand the costs, causes, and consequences of unplanned downtime? Let’s take a look at some of the costs, causes, and consequences of unplanned downtime to better understand how detrimental it can be to your organization.
Although unplanned downtime is a nightmare to all sorts of organizations, it currently remains an unsolved problem. There are many consequences of unplanned downtime including:
• Not being able to deliver services to customers
• Lost production time on critical assets
• Unable to service or support specific equipment and assets
• Being vulnerable to security threats
• A loss of business
• Significant expenditure on fixing the problem and it even requiring unbudgeted resources
• Loss of valuable data
• Losing contact with key personnel
When it comes to unplanned downtime, production/productivity, IT, and customer service are the most commonly impacted areas in organizations. These three departments are the most important areas of any organization and when they can’t properly perform their job functions, organizations face the possibility of not only losing lots of revenue but customers as well.
Unplanned downtime also comes with major expenses for organizations. According to a 2016 report, the average cost per hour of unplanned downtime is $260,000 with the average length of time an episode lasts being four hours. This results in a cost of over $1,000,000 on average for just one downtime outage! The worst part is that most companies have experienced more than one unplanned downtime episode in the past three years resulting in a cost of more than $2,000,000!
There are plenty of potential causes of unplanned downtime including:
• Hardware failure or malfunction
• Software failure or malfunction
• User error
• Security Breaches
Although there are many causes for companies to experience unplanned downtime and the costs of an episode can supersede financial loss, there are ways for your organization to combat unplanned downtime.
The first step to solve this issue is to recognize that you have an unplanned downtime problem. Once your organization is willing to admit that you could improve your effectiveness when it comes to asset management, you’ll be able to make substantial changes to avoid this issue.
The next step is to consider digital tools as a solution to unplanned downtime in your organization. Most organizations agree that investing in digital tools can completely eliminate unplanned downtime episodes. Many companies are looking to invest in digital tools like:
• Digital twins
• Machine learning
• Mobility tools
• IoT platforms
• Artificial intelligence
Since unplanned downtime and asset performance management are problems that have caused a great deal of financial pain to organizations for many years, managing and maintaining equipment assets has become a 24/7 job. This reactive approach is not a good solution to unplanned downtime though, as it does not factor into the new digital model of business. As most organizations begin to understand that investment is going to be necessary, unplanned downtime will begin to completely disappear in companies.
If your organization is ready to completely eliminate unplanned downtime, this comprehensive whitepaper covering The Costs, Causes & Consequences of Unplanned Downtime is guaranteed to help.