Research shows application downtime is costly

There are huge financial costs associated with application downtime: these run into thousands of dollars every hour. Yet, surprisingly, few companies can estimate or even know the real cost of poor performing applications. Moreover, few take any proactive measures to deal with application downtime. This is according to a recent Forrester Research study, commissioned by Compuware Corporation.

"Of the businesses questioned (138 organisations), 42% calculated that poor application performance costs them more than $100 000 per hour," says Richard Hepplestone, application performance management consultant at Compuware South Africa.

"Broken down: 33% estimated the cost to be between $10 000 and $100 000, 25% estimated between $100 000 and $500 000, 13% estimated costs to be between $500 000 and $1 million, and 4% estimated the cost to be greater than $1 million per hour. The research also revealed that 67% of enterprises either did not know or could not provide an estimate of the financial cost to the business of IT downtime.

"The majority of organisations do not understand the business impact associated with poor or non-performing applications - probably because of the gulf that still exists between IT and the business," Hepplestone says.

"This needs to addressed, otherwise downtime will continue to cost businesses hundreds of thousands of dollars each year without them even realising it," he adds and notes that it is clear that technology performance problems are hitting the bottom line of enterprises pretty hard.

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"If IT departments can demonstrate to business managers the impact application performance problems have on employee productivity and ultimately the bottom line, they should find that they receive much more support from the board to combat these problems," continues Hepplestone.

"This could also provide clearer information to the board about the return on investment of application performance projects. Also, once IT and business have this understanding, they need to find ways to proactively manage applications to ensure downtime is kept to a minimum."

The research also revealed that although the majority of organisations could not provide information about financial impact of downtime, it did show that most use a variety of different metrics to measure the effect of downtime. Seventy percent measure the applications affected by the problem, 69% the number of users affected, 61% the business locations, 48% the persistence of the problem and 42% the specific transactions affected by the problem. However, only 25% of respondents indicated that they have all five measurements in place.

"It is encouraging that a large number of IT organisations appear to have some form of business-impact assessment in place. However, it is still worrying that 31% do not know how many users are impacted when performance problems occur and that over 50% do not know how the problem affects the business transactions or processes," says Heppelstone. "IT departments need to be using all of these metrics if they want to be proactive and service-oriented."