The true cost of downtime

The true cost of downtime (Photo credit: Thinkstock/ Image Source)

Downtime – a period in which a company cannot operate to its normal capacity due to a technological failure – is not only an annoyance, but can also be extremely costly.

Here, we're going to look at the true cost of downtime for firms, while detailing how our Inventory & Management System (IMS) could help this to be reduced significantly for telecom service providers in the future.

Many reports into the financial implications of downtime have been carried out in recent years, all with slightly different conclusions, but one thing they do all agree on is that it needs to become a notion of the past sooner rather than later to prevent firms from losing money, especially in a tough economic climate.

The results of a study carried out in late 2013 by the Ponemon Institute and sponsored by Emerson Network Power priced the cost of downtime for US companies at $7,900 (€6,134 or £4,762) per minute, which is not only a significant sum, but also indicates a rise of 41 per cent from just three years earlier.

Chairman and founder of the Ponemon Institute Larry Ponemon commented: "Given the fact that today's data centers support more critical, interdependent devices and IT systems than ever before, most would expect a rise in the cost of an unplanned data center outage compared to 2010. However, the 41 per cent increase was higher than expected.

"This increase in cost underscores the importance for organizations to make it a priority to minimize the risk of downtime that can potentially cost thousands of dollars per minute."

CA Technologies also attempted to calculate the financial implications of downtime in its own report, carrying out a survey that found companies in the US experienced an average of 14 hours of downtime each year, with 18 per cent describing this as "very damaging" for their reputation.

Vice-president of product management at CA Technologies Steve Fairbanks explained: "A lot of times, companies don't fully understand the cost of not preparing, so as a result, they are not willing to spend dollars to ensure disaster doesn't occur, or they can recover quickly from a disaster."

Therefore, in light of the findings of both of these investigations into downtime and its implications, it is clear that firms relying on technology need to make sure they are adequately prepared should a technical disaster strike.

Here at VC4, our IMS product can help to reduce costly downtime for businesses, as its Single Point of Failure (SPOF) calculation assesses the network to identify part(s) of a network which, if it fails, will stop one or multiple (customer) services from working. In addition, its fault-handling and trouble ticket capabilities mean issues can be dealt with quicker within the system, before they manifest into bigger, more expensive problems. 

IMS has the ability to automatically carry out a variety of tasks, with SPOF analysis one of the most important in relation to preventing downtime. 

Users of the software can properly plan network changes in the system in combination with Automatic Planned Work Analysis to verify which customer services will be affected, once again helping to stop costly downtime from occurring.

How has du contributed to the success of the UAE’s technological sector?

How has du contributed to the success of the UAE's technological sector? (Photo credit: Thinkstock/iStock)

The United Arab Emirates (UAE) telecommunications sector has been experiencing some exciting developments over the past month, with many of these relating to the second biggest of the region's leading operators, du.

Firstly, the recently published 2014 Global Innovation Index from Cornell University, the World Intellectual Property Organization and the European Institute for Business Administration ranked Dubai and the rest of the UAE in first place regarding overall performance, with the country's telecommunications sector potentially playing a part in this.

Commenting on the announcement, minister of state for cabinet affairs Mohammed Al Gergawi stated: "The UAE encourages innovation in the fields of internet, media, renewable energy and industries and our economy is one of knowledge and innovation-based economies as classified by the World Economic Forum, while our technological infrastructure is among the best in the world. And above all, our leadership believes that innovation is the asset of the future."

Contributing to the country's growth in part was telecoms operator du, which reported a significant increase in revenues for the second quarter of the year (Q2) during July. Revenue grew by 13.7 per cent for the firm during the three-month period, reaching AED – United Arab Emirates Dirham – 3.02 billion. This is the equivalent of $822,193 dollars, or £484,298.

When compared to the recorded figure for the same quarter last year, this is once again a dramatic increase, as in 2013 revenue was AED 2.66 million. 

Regarding mobile revenue, this rose by 9.5 per cent in Q2 to AED 2.26 billion, which was largely due to an increase of 18.6 per cent – or AED 680 million – relating to data revenue. In addition, fixed revenue grew by an impressive 30 per cent during the quarter, reaching AED 541 million.

In another exciting development for du, the telecoms operator has announced it will begin offering broadband and Voice over Internet Protocol (VoIP) – internet-based phone calls – services to its UAE customers as of October. Following this, IPTV – the ability to access the internet via the television – will be explored as another option to offer to customers.

This is being made possible due to a network-sharing deal with fellow telecommunications company Etisalat, with which it has been negotiating for five years. 

Reuters reports du is largely confined to offering its services in newer parts of Dubai, while rival Etisalat serves customers elsewhere within the region. 

The news provider quotes chief executive of du Osman Sultan to have told the media: "In the fixed segment, competition did not play, so strategically, going forward, this will be a very interesting platform of revenue growth for us."

Not only has it been an exciting July for du, but it also looks to be an exciting future, with Mr Sultan predicting the company's revenue growth for the whole of 2014 to be in the region of eight to ten per cent. 

While this is slightly lower than previous estimates of double-digit growth, the investment in expanding into new services will of course require some of the firm's revenue to be spent on these.

How can IMS make a CEO’s life easier?

How can IMS make a CEO's life easier? (Photo credit: Thinkstock/iStock)

A chief executive officer's (CEO's) life is a busy one, involving many requirements, including management skills, a keen eye for recruitment, quick decision-making abilities and the capacity to deal with staff problems.

Therefore, anything that's designed to make a CEO's life easier is bound to be welcome news and we at VC4 believe we have just the thing that could help to ease stress levels for bosses, while also ensuring a company continues to perform to a high standard – the Inventory & Management System (IMS).

What is IMS?

IMS is a specialist solution designed to help a business to manage its telecommunications networks and platforms in one central, easy-to-access location. 

There are countless features and benefits to installing IMS within a business, with its primary aim being to make life simpler for both management and members of staff lower down the rankings.

To highlight just a few of its features, IMS can register and manage several telecommunications networks at one time, while consolidating significant amounts of information within them.

Holding the position of CEO involves numerous management tasks, but IMS can take many of these away from a boss and their current software, providing them with a much more adequate solution.

For instance, IMS can manage the IP networks and keep track of orders and details relating to output productivity and workflow.

Updates can be automatically processed through the system, taking away admin tasks for network engineers and stopping the need to wait for slow, outdated programs to upload new information.

IMS has the ability to keep track of all operations across a business, including sales and even the goings-on in the warehouse, meaning CEOs don't need to worry about trying to achieve the impossible task of placing themselves in more than one place at a time.

As well as floor and department management, IMS can look after data relating to staff and their contracts and terms of employment too, providing CEOs with peace of mind that all this information is being stored in a safe and secure manner.

If bosses struggle to keep track of contractors carrying out tasks, IMS can look after information regarding these too, meaning they'll easily be able to track performance based on KPI reporting.

What problems do CEOs face?

In a blog published in March 2014, the Wall Street Journal interviewed a number of CEOs from a variety of businesses to find out what the most common problems they face on a day-to-day basis are.

Many of the answers were centred around concerns relating to providing a high-quality service, managing staff and remaining at the forefront of the technological age.

Rosabeth Moss Kanter, a strategy, innovation and leadership specialist at the Harvard Business School, explained: "CEOs worry about innovation – their own and others'. They want their company to be well along with the next game-changing blockbuster before competitors catch up, which makes them worry about what the competition is doing."

Chairman, president and chief executive of State Street Corp Jay Hooley added: "If you aren't harnessing the power of data, you're almost certain to end up falling behind."

How could IMS help?

In light of these findings by the Wall Street Journal, using an innovative system such as IMS could help to significantly reduce some of these concerns, consolidate data and centralise network management software into a single, easy-to-use platform.

As a tried-and-tested – but highly innovative – product, IMS is at the forefront of advances in technology, helping CEOs to ensure their firms are remaining competitive in our increasingly digital age.

It is not just data relating to the networks that can be consolidated in the inventory system, as it can be used in conjunction with other programs your firm may already be using – such as customer relationship management (CRM) – to allow you to keep track of information regarding your clients and consumer market.

IMS has the ability to integrate data from these other systems, not only making life easier for you, but also ensuring you can continue to deliver the best possible service to your clients, which is something VC4 feels extremely passionate about and is more than happy to help with.

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