Server Hosting and Data Center Outsourcing
Solutions From CIO-On-Call
- The Economics
The cost of a systems outage can be
substantial, and it is totally avoidable. Here are some examples of
the loss you could incur:
Example 1
- A distributor loses the use of a key warehouse management system
due to server failure caused by an unexpected power loss. The
system was lost due to unexpected spikes in power during the power
failure/recovery cycle. In order to recover operations the server
must be fixed, and software or data recovered. The process takes 2
days to complete. During that period of time no orders can be
processed and the 60+ warehouse personnel are either sent home, or
“make work” assignments are completed. After the recovery, the
warehouse staff must work a second shift for 2 days to make up for
the lost time. Cost is calculated using a loaded manpower cost of
$60,000 per year including benefits.
Hourly cost per
person = $60,000/52 weeks/40hours = $28.85 per hour
Cost of
Event:
Repair of
System
$1,000
Unanticipated overtime
$28.85 x
1.5 (overtime) x 16 hours x 60 people $41,544
Total
Cost of System
Failure
$42,544
Note that this
calculation does not take into account the cost of lost sales due to
the delay.
Example 2 –
The distributor loses access to the sales systems. The telephones
are operating, so telephone calls are coming in, however no sales
can be accepted since there is no system access to log the sale or
to check inventory for shipping purposes. Assume the company
generates $20 million per year in sales. The same two day outage
would result in the loss of
Sales Lost
$20,000,000/52 weeks/5 days = $76,923/day X 2 days = $153,846
lost sales
These losses can be totally prevented
by providing a robust Data Center environment that provides
protection against power loss, communications loss, fire, etc.
While the cost of building an appropriate Data Center environment is
very high, this cost can be totally avoided by locating your systems
in our outsourced data center.
Through CIO-On-Call
services, NewVista Advisors serves as a trusted member of your
management team, integrating technology decisions with business
operations and goals. Identifying opportunities and innovative
ideas, developing the necessary information for effective decisions,
and guiding these ideas through implementation, NewVista Advisors
fills the technology leadership gap.
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