Successful enterprises know that the entire business model revolves around meeting customer needs proactively and efficiently. In today’s digital world, this business model hinges on robust and reliable WiFi and wired networks. Problems with these networks represent far more than technical issues. They are a significant financial concern, one that impacts digital experience and a company’s bottom line.

It’s important to understand the different financial costs at stake, and implement strategies to mitigate downtime and safeguard business continuity, operational efficiency, and brand reputation.

The Direct Costs of Network Downtime for Enterprises

Lost Revenue

Most business processes are tied to the network. Network downtime therefore means either a complete halt in productivity, or at least some sort of delay in operations.

This delay can look like anything from a website not working to an assembly line freezing.

Whatever the case, the end result is the same: lost revenue. While this is most obvious in the case of a malfunctioning website for enterprises in the e-commerce industry, it holds true for all industries. Take these examples:

• If an assembly line malfunctions in some way, fewer products are assembled. This means there are fewer products to be sold. 
• For airlines, downtime can mean canceled flights.
• For the stock market, network issues can result in the suspension of trading.

In other industries, network downtime can mean an inability to respond to potential customers, or to help current customers troubleshoot problems. In every scenario the result is the same: lost revenue. In 2017, Gartner reported that the average cost of IT downtime was $5,600 per minute.

Increased Operational Costs

Enterprises expect their network infrastructure and devices to operate reliably for around three to five years. After that expected time, companies enter a refresh cycle. In this cycle, they’ve budgeted for network upgrades and updates. 

What this means is that the budget is not designed to cover large network repairs outside of that refresh cycle. However, if the network is unreliable, network repairs are required. This forces enterprise budgets to be reworked, and this solution is not sustainable in the long-term.

Operational costs can include not only the cost of new infrastructure, but also the cost of paying IT professionals, both in regard to regular salaries and any potential overtime. Any Network-as-a-Service provider can also face financial penalties, if network downtime means the service fails to meet the standards outlined in a Service Level Agreement (SLA).

Employee Productivity Losses

Employees rely on networks for their daily tasks and responsibilities. Any downtime therefore directly impacts employee productivity.

When considering how this affects overall productivity, enterprises should keep in mind that not all downtime is reported. In the case of micro-downtime (something like a business portal taking longer to open or an email taking longer to send), employees often won’t report the issue because it’s resolved before an issue ticket can be created. 

This seems harmless, but all those individual lost minutes add up. 

Consider an enterprise with 1000 employees and micro-outages that delay each employee 15 minutes every week. That’s the equivalent of 250 hours lost.

Compare that to an enterprise with reliable, optimal networks that only see 15 minutes total of slow performance every week.

Which enterprise would you rather lead? 

Indirect Costs and Long-term Financial Impact

An article from a few years ago shared that network brown-outs, unexpected and unintentional drops in network quality, cost companies $400,000-$700,000. This is because of the direct costs of restoration, lost productivity and revenue, and customer “badwill” costs. The article suggested that these costs will only rise as all enterprises continue adopting new technologies, increasing their dependence on WiFi and wired solutions.

Brand Reputation Damage

Prolonged or repeated network downtime will damage a company’s brand reputation. If customers can’t rely on a company, they will go elsewhere. This loss of trust and increased churn will ultimately lead to a drop in market positioning if companies don’t do everything possible to resolve the issues.

This isn’t easy. It’s far harder to repair a damaged reputation than it is to maintain a good reputation.

This is because the repercussion of a damaged reputation include:

Customer Loyalty and Retention Issues

According to one research study, a single negative search result can cost brands around 22% of their potential customers. Three negative results jump that to 59.2%, and four or more can cause brands to lose 70% of potential customers.

Employee Morale and Retention Issues

Employees who do not have reliable access to the resources they depend on to perform their jobs will feel frustrated. They may even feel that they don’t matter to a company and are unnecessary to enterprise success. 

As their digital experience continues to suffer, enterprises can expect employees to leave, resulting in higher turnover rates. This in turn leads to increased hiring and training costs, which will be made all the more difficult if word has gotten around that the company has a poor reputation.

Poorer and Fewer Future Business Opportunities

For B2B enterprises, a tarnished reputation can significantly impact available business opportunities. Very few companies will select a company with a poor reputation as their first choice for any partnership.

For an enterprise that depends on these relationships to survive, a damaged reputation effectively curtails any opportunity for business growth.

Strategies to Mitigate the Cost of Network Downtime

Now that we’ve walked through how severe of a financial impact network downtime can have, it’s time to lay out strategies to mitigate the cost of any downtime.

Continuous Monitoring

The first solution every enterprise must adopt is one that provides continuous network monitoring.

Network downtime can occur at any second. The only way to know the exact health and performance of the entire network ecosystem is with a solution that provides 24/7 monitoring. Yes, this might include times when no one is onsite. Even during these times something can impact the network. When IT professionals are back onsite, they must have a complete record of network history.

The solution must monitor all backend and frontend infrastructure and connected devices. As a bonus, look for a solution that also monitors nearby networks and other possible sources of interference such as Bluetooth devices.

Proactive Maintenance

IT needs a solution that will alert teams to problems – both existing and potential – before end users are impacted. With these alerts, teams can perform maintenance proactively, preventing, or at least significantly mitigating, any network downtime.

This type of proactive maintenance is made possible by solutions that use artificial intelligence to learn to recognize normal and abnormal network behavior. At the first sign of anything abnormal, or after any failed test, the solution should alert IT to the issue.

Alerts should include root causes and possible solutions to further reduce resolution times.

Remote Troubleshooting

IT professionals are not always onsite. In order to protect networks at all times, professionals need remote troubleshooting.

These solutions should provide IT a means to both review network behavior and resolve issues from any location at any time.

With this support, IT can resolve problems faster because they aren’t required to travel onsite before diagnosing the issue and implementing a resolution. 

In addition to improving the digital experience, this reduction in travel and faster network restoration saves companies money.

Comprehensive Network Disaster Recovery Plans

Outside of technological solutions, all enterprises must have comprehensive network disaster recovery (DR) plans. These plans are needed in the case of a severe network outage.

A few key points to include in a DR plan:

• Clearly identify the personnel and departments responsible for any included task
• Include contact information for each individual
• Determine recovery time objectives and recovery point objectives for each affected service
• Be specific about what is needed for each type of disaster, but also build in flexibility. It’s impossible to perfectly imagine every possible disaster scenario.
• Include step-by-step instructions

DR plans should be tested and updated regularly.

The True Cost of Network Downtime

We depend on our networks for almost every business process. Network downtime isn’t merely an inconvenience, it directly threatens company growth and revenue.

Prioritize network reliability and you prioritize the future of your business.

For more information on how Wyebot helps enterprises achieve worry-free WiFi, ask us here about a demo or free trial of our AI-powered Wireless Intelligence Platform.