The Cost of IT Failure

When your business has a problem with its I.T. system, no matter how small it may be, then it can be costly. Any glitch that causes your system to be down, even for a short period can lead to unwanted expense in time, money and even reputation that can have a significant impact on the bottom line.

Over the past couple of years the media has reported a number of high profile I.T. glitches from energy suppliers, airports and air traffic control, to high street banks and some of our best known online retailers. In each case, the repercussions have been considerable, both in financial terms and in regard to reputation or confidence.

But it’s not only an issue for the big companies to be concerned about. Whether international conglomerate or a local company operating out of a single office, I.T. failure can hit your business hard if you don’t have a robust system in place to manage and resolve the issue.

Financial Costs

Clearly one of the uppermost concerns for a company when its I.T. system goes down is the financial implications it’s likely to create.

Again, we can look to high profile incidents for extreme examples of how this is so; for instance, the Royal Bank of Scotland (RBS) were fined £56 billion for a 2012 failing in their banking system which led to tens of thousands of customers unable to access their accounts or receive transactions.

Indeed, a KPMG report at the end of 2014 claimed that, across the whole UK economy, an I.T. incident was likely to cost an average of £410,000.

OK, so these are eye-watering amounts of money, always likely to grab headlines. But whatever scale and budget your business works to, I.T. failings – if not quickly and efficiently resolved – are going to hit you in the pocket. If your system malfunctions meaning you are unable to take, process or action orders from your customers, or provide the service for which they are paying you, then you are going to be facing a cost in your business.

From a local perspective, one particular client (VSI-Thinking) in Cardiff have indicated that the reason they rely on quick response I.T support from Sabre is due to the fact it can cost upwards of £600 per day when the system is down for any reason.


Make no mistake, if you suffer an I.T. failure which becomes problematic to rectify or, worse, you don’t have a procedure in place to rectify quickly and satisfactorily then it can most certainly have a negative effect on the reputation of your business – which in itself can bring further costs.

Again, this is not just an issue for the big, well-known brands. At a local level where competition is keen, any reason for a customer to have doubts over your ability to carry out the service required could lead to them opting to take their custom elsewhere.

In many respects, however, reputation will be affected in accordance with the way you deal with a situation. Most are reasonable enough to know that everyone will have a glitch at one time or another. But if your glitches are more frequent, if you are ponderous in getting them resolved, or if your customer service is deemed to be lacking in such instances, that’s when you risk damage to your reputation.

Taking a high profile example again, in December 2014 the Guardian reported on the computer glitch at one of Amazon’s third-party partners which saw items go on sale for 1p; the gist of the story not so much on the glitch itself but the negative reaction of vendors unhappy at the way the situation had been dealt with.

Or what about Heathrow Airport’s Terminal 5 launch in 2008? The most modern terminal in the world suffered a catastrophic failure in its baggage handling system on day 1 that took days to rectify. Nowadays the terminal is considered one of the best on the planet but the spectre of that launch loomed heavily over them for a number of years following.

Now, imagine a scenario within your own business. How are you going to react when you have an I.T. issue? Do you have support and procedures in place to ensure that you can effectively manage the situation and minimise any negativity to your reputation?

Customer Confidence

I suppose this is somewhat linked to reputation, but remains an important factor in itself. Integral to a business’ long term success and growth is the confidence they have from their customer base that they can deliver.

On a human level, confidence and trust is all important in business and in service provision – for all manner of reasons. How did the average traveller feel, for example, in 2014 when there was a software failure within the UK air traffic control system?

If a customer loses trust in your business, your brand or your service then it can be gravely damaging. A March 2015 report by Neustar into Distributed Denial of Service (DDoS) attacks on I.T. systems demonstrated that in more than a quarter of businesses surveyed, it was the loss of customer trust that was considered the most damaging aspect of the attack.

Your Own I.T. Support

So what do you need as a business to protect against significant damage in the event of an I.T. malfunction?

The reality, of course, is that you can’t 100% prevent a failure. Things, inevitably, go wrong from time to time.

What you can do though, is ensure you’re working with a professional and expert I.T. support team who can be there when you need them the most. A team who can deliver:

  • Quick Response to a problem – if your system goes down you need to be able to have someone on hand (either in person or remotely) who can address the problem straight away to find a solution as swiftly as possible.
  • Regular Maintenance – if you can keep your system serviced and updated then you demonstrate effective due diligence as you try to prevent serious failures occurring.
  • Support that can be tailored to your business – having access to a professional who knows how your system operates, the software and equipment involved and can respond accordingly when required.

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