Formula
Cost of Downtime = Downtime Duration × Revenue Loss per Hour
Calculation Example
If a company loses $5,000 per hour and experiences 4 hours of downtime, Cost of Downtime = 4 × $5,000 = $20,000
Data Source
Financial Reports, IT Incident Logs, Business Continuity Reports
Tracking Frequency
Monthly, Quarterly, Annually
Optimal Value
Lower is better; downtime costs should be minimized.
Minimum Acceptable Value
A high cost suggests infrastructure vulnerabilities.
Benchmark
Industry benchmarks: SaaS ~$300,000 per hour, Financial Services ~$1M per hour, Manufacturing ~$100,000 per hour
Recommended Chart Type
Bar chart (to compare incident impact), Line chart (to track downtime trends)
How It Appears in Reports
Displayed in IT and financial reports to assess downtime risks.
Why Is This KPI Important?
Indicates the financial consequences of system failures.
Typical Problems and Limitations
Does not account for long-term reputational damage.
Actions for Poor Results
Implement failover solutions, use disaster recovery plans, enhance IT infrastructure.
Related KPIs
System Uptime, Server Response Time, Security Incident Rate
Real-Life Examples
A financial institution reduced downtime costs by 50% by implementing automated failover systems.
Most Common Mistakes
Focusing only on cost without addressing underlying infrastructure issues.
