116 - 2750 Faithfull Avenue
Saskatoon, SK S7K 6M6

Cost of Downtime Index

Cost of Downtime Calculation for Budgeting



Your CoDI should include the following costs:

  • Wages, utilities, lease and footprint expenses.
  • Stress that impacts employee retention.
  • Lost productivity.
  • Missed opportunities.
  • Reputation damage. 


Below is an example cost of downtime metric calculation for illustration from a real local business:

A local business employing 15 people full time and several part time is using computer software for email, for cash flow, for inventory flow, and for phone communication.  Their costs break down as:

  • $20,000 per month for lease and utilities, works out to $112 per hour over 180 production hours per month.  

Their Cost of Downtime Index is $768 per hour.  This means a three day outage where they have no server or internet access will cost $20,700, a potential cost they use to justify investing an additional $10,000 per year to prevent outages and normalize them when they can't be prevented.  One of the ways you prevent unplanned outages is by monitoring your computers for pending failure conditions, and doing regular maintenance on both the hardware and software to keep your systems running as expected.