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Technology failures cost firms average of $11 million short term
Businesses now rely heavily on technology but, when that technology fails, the cost to businesses is huge, according to new research by Intellitrends for Compuware.
A study of over 300 I.T and line of business executives found that over three-quarters (79%) had experienced at least one technological fault in the past year and over half (51%) had experienced a 'major' technology-related issue in the last three months.
The cost to businesses of major outages can be enormous with 'short term costs' averaging $11 million. Those costs are made up of product recalls, product waste and sales and marketing, found Compuware.
"This demonstrates our reliance on IT and the direct impact on revenues, relationships and reputations when technology does not work as it should," said Michael Allen, director of APM for Compuware (via Outlaw.com). "The figures really are eye watering - especially when you consider the fact that these are not isolated events."
Businesses were most apt to blame software and hardware for technological failures, and consequently invested in upgrading both. Other perceived causes were utility failure (22%) and security threats (16%).
However, even as technology and software improves, it seems that the propensity to experience a failure does not. Three-quarters of those surveyed said the frequency with which they experience failures is either staying the same or increasing.
"Many companies are fire-fighting problems on a daily or weekly basis, hemorrhaging money and damaging the long-term health of their organization," added Allen. "Despite this, companies are still not taking performance management seriously, as shown by the fact that three quarters are failing to reduce the number of incidents that are occurring."
Image via Shutterstock
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