5 Hidden Costs of Unplanned SAP Downtime
The nature of SAP change makes it hard to avoid importing mistakes into production. While this has meant many organizations now accept a certain level of unplanned downtime, this may be costing far more than they realize.
When you’re making changes to systems that are running millions of transactions a year, the stakes virtually couldn’t be higher. But that’s what SAP teams must wrestle with on a daily basis as they attempt to make improvements to their SAP landscapes.
Since SAP change often takes weeks to action using a waterfall approach where teams hand over tasks sequentially, there are many opportunities for problematic code to slip through the net. The manual burden of SAP change is also a hotbed for human error.
In this article, we’ll break down five of the most pressing costs of unplanned downtime, and outline what you can do to eliminate them from your business.
The 5 hidden costs of unplanned SAP downtime
1. Direct revenue
Every business wants an uninterrupted revenue stream, yet 8 in 10 enterprises have experienced unplanned outage within the last three years, with 4 in 10 suffering weekly or monthly (Forrester).
While not all of these disruptions directly affect customers or critical operations, around one third of unplanned downtime results in direct revenue loss (IDC’s Worldwide State of Data Protection & DR Survey).
For example, let’s say that McDonald’s uses an SAP software to manage its supply chain so that every restaurant has a constant supply of burger patties. If a code error causes unplanned downtime of that SAP software for just a couple of hours, that could be enough to delay deliveries that day and significantly impact sales.
According to research from Ponemon Institute, 1 minute of an unplanned outage costs around $9,000 on average, which is over $500,000 per hour. Although for certain industries, like banking and manufacturing, that cost can reach around $9 million per hour (Statista).
2. Customer relations
If your customers can’t complete a task or make a transaction at a critical moment, it can be very challenging to rebuild that relationship. Each time a customer fails to achieve something with your business, it’s an opportunity for them to seek out your competitors.
One survey found that 46% of companies have been unable to deliver services to customers due to unplanned downtime.
There’s no guarantee that a customer will come back from this and if you are able to win them back, it’s likely that it will require significantly more marketing and sales resources to overcome the negative experience. While it takes years to build a strong customer relationship, it can all be undone in a moment of downtime.
3. Brand reputation
When your customers can’t complete tasks or transactions, this not only affects their personal view of you as a vendor, but it can also bleed into your public reputation.
In the social media age, it’s very common for business disruption to gain significant engagement on social media platforms as users check if their issue is simply a bug they’re facing or a wider systemic issue. This creates negative word-of-mouth among the unhappy customers’ network.
In severe cases, this spreads to media companies like the BBC or Wall Street Journal that publish stories on disruptions to an even broader audience. You then have a PR crisis that accelerates and compounds the damage to your brand, which can lead to an embedded reputation for unreliability.
According to IDC’s Worldwide State of Data Protection & DR Survey, 40% of unplanned downtime issues led to some sort of damage to brand reputation.
4. Internal influence
No one notices 99% uptime, but everyone has something to say about 1% downtime. It’s an unfortunate reality of IT that their mistakes can grind parts of the business to a halt.
According to Foundry’s State of the CIO 2023 survey, 77% of CIOs feel that their position has been elevated in visibility due to the state of the economy. While this brings great opportunities to improve the IT team’s internal influence, this new visibility might not always be positive as macroeconomic situations threaten the company’s bottom line.
Unplanned downtime is a big problem for the CIO in this regard. If business continuity is threatened by unplanned outages, the revenue engine is put at risk during already undesirable economic times, with IT as the focus of everyone’s complaints. This erodes the CIO’s position internally, making it increasingly difficult to get buy-in for future initiatives that could genuinely benefit the business.
In some situations, business units will even bypass their service level agreement with their IT team and outsource help, greatly diminishing the position of the internal IT team.
5. Project backlog
One of the biggest costs of unplanned downtime is the domino effect caused by firefighting. If the IT team is regularly jumping on emergency work, the critical projects they’re working on get pushed to the side. Over time, this has substantial ramifications for deadlines and budgets.
The Phoenix Project: A Novel about IT, DevOps, and Helping Your Business Win identifies “unplanned work” as one of the four pillars of IT work. The author argues that recovering from emergencies is one of the central reasons preventing IT teams from achieving their goals, particularly when it comes to projects that could drive revenue and innovation for the business.
If you’re constantly putting out fires, you never gain the momentum needed to complete big SAP projects like S/4HANA or cloud migrations. As these expensive projects are delayed, the price tag keeps ticking up.
How to eliminate unplanned SAP downtime
The nature of SAP change is largely responsible for unplanned downtime. The two biggest drivers are:
- Testing too late in the development process.
- Human error caused by excessive manual input.
If you’re able to address both of these issues, you’ll eliminate unplanned downtime and avoid the costs outlined in this article.
Fortunately, both can be solved with automation. By automating your SAP change management, you remove opportunities for human error and allow multiple teams to work in parallel. This will allow you to bring testing up front so mistakes can be addressed before they get anywhere near your live systems.
At Basis Technologies, our SAP Change Automation solution, ActiveControl, can help you achieve this. 70+ SAP-specific analyzers eliminate technical release errors by automatically identifying defects before they leave the development environment. And for an extra insurance policy, there’s an emergency “BackOut” button that immediately reverses any change that caused unplanned downtime, giving you and your team the ultimate peace of mind. Learn more.