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Photo Release -- Short-term Price Tag Per IT Failure Averages $10.8M, According To Global Executive Survey

Stocks in this article: CPWR

DETROIT, July 18, 2013 (GLOBE NEWSWIRE) -- Compuware Corporation, (Nasdaq:CPWR), the technology performance company, today announced the results of a global survey measuring the financial impact on businesses when technology fails. The results quantify the significant long- and short-term costs to businesses when an IT failure occurs and identify secondary costs in productivity, production waste, customer satisfaction and more.

A photo accompanying this release is available at "Measuring IT performance, and in particular its impact on business in real financial terms, is a complicated activity and as a result, most companies fail to do so in a uniform and comprehensive manner," said Paul Czarnik, Compuware CTO. "When we distilled this study to its most basic level, we arrived at a simple formula to help IT departments and business leaders to get on the same page, both in assessing the impact and more importantly, prioritizing and resourcing the path to recovery: Cost of the failure is equal to an individual incident's financial impact – short and long term – multiplied by the frequency of that incident plus the time spent to return to normal operations."

Got a Tech Performance Failure? That'll be $10.8M, Please

Averaged across all respondents, the short-term costs to operations, sales and marketing for a single major technology issue was $10.8 million.

When examining the costs exclusively for those respondents that reported an impact in product recall, wasted product and sales and marketing specifically, the numbers increase dramatically:

  • Recalled and wasted product costs: $4M
  • Sales and marketing costs: $13M
  • Total short-term cost impact: $17M

One U.S.-based executive in the manufacturing industry summed up his company's technology performance failure story this way: "When our distribution inventory databases went down, we couldn't ship our product. Plus, we lost awareness of stock levels, causing us to resort to a manual count. The bottom line was a big loss in sales, plus some very upset customers."

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