How reliant is your organisation on IT?
Day-by-day the world becomes more reliant on IT systems and the networks that connect them. However, be it direct or indirect, the degree of reliance varies from one business to another and this is reflected in the way IT systems and applications are managed and the way IT problems are dealt with, especially the most serious, often termed critical IT events.
In Quocirca’s October 2016 European survey, Masters of Machines III, Quocirca used an index to measure reliance on IT related to customer interaction. The scale used ran from absolute reliance (HIGHEST) to no reliance (NONE):
- HIGHEST: Such an event is unacceptable to our customers who rely on continuous access
- VERY HIGH: All processes would be interrupted, all of our customers would be affected
- HIGH: Most processes would be interrupted, many customers unable to transact
- INTERMEDIATE: Many processes would be interrupted, some customers unaware
- LOW: Some processes would be interrupted, but customers should be unaware
- NONE: There would be no impact on our business
30% ranked their business in the HIGHEST, VERY HIGH or HIGH categories, whilst less than 4% rated their reliance as NONE. In-between, 38% selected LOW and 28% INTERMEDIATE.
The degree of reliance varies by industry and the directness of customer interaction. Half of telecom service providers, whose customers are helpless when certain systems are down, placed themselves in the top 3 categories. The least reliance was in retail, with only a quarter selecting the top 3 categories. This may seem counterintuitive with the rise in online commerce, however, whilst those retailers that only operate online may be completely reliant, many others are still indirectly reliant on IT to manage supply chains and payment systems, often via 3rd parties.
Anything that directly impacts customers sets alarm bells ringing. 77% said they would increase the priority given to critical IT events that rendered systems unusable when business customers were impacted; 76% said they would do so if consumers were affected. These figures increased to 93% and 91% respectively if that interaction was happening ‘very often’.
This increased priority is not surprising, given the cost of critical IT events, which rises with degree of reliance on IT. The overall average cost to the business of the most recent event was €88K, however, for those most reliant on IT it was €176K. To this must be added the cost to the IT function itself of dealing with such events which was €27K on average, but rose to €59K for those with the highest reliance.
This higher cost to IT does not reflect poorer capability; it just means all the necessary resources are being deployed to solve problems as quickly as possible. Larger teams are pulled together, with the necessary skills to address the issues. More is invested in the capabilities to support these teams too, such as operational intelligence tools which improve team co-ordination and infrastructure visibility. So, although teams are bigger, which costs more, the individual team members are more productive solving problems faster in the interest of the impacted users.
No one believes that critical IT events can be eliminated, but the ability to respond to them can be improved and their impact reduced. Many of the organisations that are most reliant on IT already know this, others will have to catch up sooner or later.
Quocirca’s research into critical IT events was sponsored by Splunk, a provider of operational intelligence tools, and is free to download at this link: http://explore.splunk.com/masters-of-machinesIII
