Defining business time lost

Wed, 12 Apr 2023 13:26:28 GMT

Hi, I am looking for guidance or any methodologies on how to calculate/ define business time lost. This is something we are looking to bring into our organisation so would like to know how others have approached this and what has worked for them.

We don't currently have a way of representing the value of our services - we don’t have a defined method of converting time to a financial value of our services and we would now like to represent our services in terms of reduced business time lost.

There are a number of methodologies to quantify business time lost that we have found, for example:

IDC's DevOps Best Practice Metrics: Fortune 1000 Survey – average cost of critical application failure is $US100k per hour.
Cost of Downtime (per hour) = Lost Revenue + Lost Productivity + Cost to Recover + Cost of Intangibles (i.e. reputation cost)

Are there any other methods anyone has come across?

Thanks

Fri, 14 Apr 2023 11:25:33 GMT

There are several methodologies that can be used to calculate and define business time lost, and the two you mentioned are commonly used. Here are a few additional methods:
1. Opportunity cost: This method involves calculating the amount of revenue that could have been generated during the downtime if the system or service was operational. The opportunity cost represents the potential revenue that was lost during the downtime.
2. Customer impact: This method involves calculating the number of customers that were impacted by the downtime, the duration of the downtime, and the potential revenue that could have been generated from those customers.
3. Employee impact: This method involves calculating the number of employees that were impacted by the downtime, the duration of the downtime, and the potential loss of productivity that resulted from the downtime.
4. Regulatory impact: This method involves calculating the potential fines or penalties that may result from the downtime, as well as any other regulatory impacts.
5. Reputation impact: This method involves calculating the potential loss of reputation that may result from the downtime, as well as any other intangible costs associated with the impact on brand image.
It's important to note that the best method to use will depend on the nature of the downtime and the organization's specific needs and goals. A combination of these methods may be necessary to provide a comprehensive view of the impact of downtime on the organization.
Hope that helps a bit !