Infrastructure Management Report

The Costs of Lack of Service

Both service providers and enterprises are in danger of losing customers if they do not supply a quality service, and yet without technology to help them, there is no way that they will be able to supply anything like a satisfactory service. The cost of a single hour of downtime in some enterprises has been estimated at US$ millions, but this could be a conservative estimate when one considers the effects on the company's share price. These days, customers of all kinds are much more discerning. If they cannot get the level of product or service in the time that they expect from a company, they know that the nature of today's business is such that there is a competitor organisation with a more efficient or friendly Web site ready to pick up their business. The retention of customers is something that organisations ignore at their peril. The cost of obtaining new customers is generally believed to be in excess of five times that of retaining existing customers.

Similarly, the cost of downtime is expensive in staff productivity. Recently, a survey showed that an average of 13 days per annum were lost by companies due to downtime. This represents 6% of staff costs that were lost because the system was down. In the IT department, up to 80% of downtime is spent in locating the problem, dwarfing the time required to actually fix it.

The Needs of the Customer

Butler Group believes that: