Help Customers Prepare for Power Outages by Calculating Downtime Costs

The recent severe winter storm in Texas and surrounding states was a clear reminder that when the power goes out, much of society comes to a halt – especially in frigid temperatures. Besides human suffering, outages are a leading cause of unplanned downtime and lost revenue for businesses. For IT solution providers, natural disasters provide a compelling reason to talk to customers about downtime costs and business continuity planning.

Many costs associated with downtime can be prevented through best practices and reliable technology solutions. On the technology side, it means having an appropriate battery backup power protection strategy. This is an important topic to raise with customers who often do not think about power backup, even though it can save them a lot of money in data losses and equipment damage.

The Cost of Unplanned Downtime

As a partner, when you sit down with a customer to estimate downtime, make sure to take into account both direct and indirect costs. Direct costs are straightforward and easier to grasp:

• Lost wages for employees who cannot work because of downtime
• Revenue losses when shutting down systems such as factory production lines and retail point-of-sale (POS).
• Overtime wages to pay for checking or fixing systems after the outage
• Losses from damaged equipment
• Time spent restarting equipment following the outage

Of course losses vary from customer to customer, and depend on factors such as payroll, the value of damaged equipment and lost revenue. Having a firm handle on all these costs is key to proper business continuity planning.

Indirect costs are a little harder to determine because they can be hidden in some cases:

• Reduced customer satisfaction from inconveniences such as website being down
• Losing customers to competitors during a shutdown
• Damaged brand reputation
• Bad publicity

Once all these costs are calculated, the job isn’t over yet. Remind customers they also must determine how downtime costs change as an outage continues. In retail, the losses will continue at roughly the same rate for the duration but other businesses may experience little direct loss for a short outage because revenue is delayed, not lost. Nevertheless, if the outage drags on, it can affect business reputation and customer satisfaction for any company.

Once downtime costs are assessed, help customers figure out how probable an outage is at any given site, based on available outage data. This represents the customer’s level of risk, which involves two variables: frequency and duration of events. With this information, you can determine how much power protection a customer needs to ride out outages of various durations without significant losses.

Access Power Outage Resources

Don’t wait too long to discuss downtime costs and business continuity with customers. Another severe weather event is bound to occur sooner or later. Partners can explore the UPS Buying Guide for more information on how to help customers prepare for outages and protect their business assets.

To help minimize downtime caused by these events, solution providers can take advantage of offerings such as Schneider Electric’s cloud-based platform, EcoStruxure™ IT. The platform provides visibility and monitoring capabilities to continually assess the health of distributed IT infrastructure at sites with limited or no IT staff. This opens another opportunity for partners to add value, grow revenue and help customers prevent unplanned downtime.