The number of IT downtime incidents per year, as well as the financial impact per incident, increased as the total revenue of respondents' companies increased -- presumably a function of having more factories and lines, as well as higher production volumes and values. However, financial impact as a percentage of annual revenue was greater on smaller producers by a significant margin, survey findings indicate.
"The statistical results are a good indication as to why the response to this email survey was so strong; the persistence and punishing cost of IT systems downtime are very much on the minds of plant operations management," said Dave LeClair, director of product management & marketing, Stratus Technologies. "As high as these costs appear, our experience in manufacturing suggests these calculations understate the true financial impact and include only the more obvious cost factors, such a labor and reduced volume. In reality, that's just the tip of the iceberg."
More than five hundred IndustryWeek readers responded to the March 2012 survey, representing a broad range of company sizes and products produced. The magazine tabulated results by annual revenue categories -- less than $100 million, $100-$999 million and above $1 billion -- and by the average of all respondents. Results were as follows:
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Annual Revenue Average Cost per Average Downtime Total Annual Cost
Downtime Incident Incidents Annually of IT Downtime
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< $100 million $10,754 3.2 $34,413
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$100-900 million $20,417 3.5 $71,456
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> $ billion $32,500 4.5 $146,250
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Survey Average $18,286 3.6 $65,830
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Source: "Manufacturer IT Applications Study," March 2012, IndustryWeek magazine
Only three out of seven respondents said they have a strategy in place for high availability computing. The percentage of manufacturers with annual revenue of more than $1 billion that said they have a strategy (41 percent) was nearly twice that of those with revenue of less than $100 million (23 percent). Larger companies also used IT technologies better suited to ensuring high availability than did smaller firms. Despite these advantages, large manufacturers are losing nearly $150,000 annually from IT system downtime.
"Large company or small, production plants generally do not have the necessary IT skills onsite to proactively manage and maintain computer systems. They react to crises rather than averting them," noted LeClair. "This approach will usually cost much more money over time than making investments in the correct high-availability solution at the outset."
The full survey results will be presented during a webinar hosted by IndustryWeek on May 31, 2012. NetSuite's GM of Manufacturing/Wholesale & Distribution, Roman Bukary, and Stratus' Director of Global Alliances, Peter Cook, will discuss the results of the survey, provide insights into what manufacturers are currently experiencing with regard to downtime, and offer some best practices to prevent it. To pre-register for the webinar, visit http://bit.ly/IHZxLA.
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Contacts: Ken Donoghue Stratus Technologies 978-461-7269 Email Contact www.stratus.com
