New global research reveals stock price can plunge up to 9 % after a single incident and take 79 days to recover . plunk , in collaboration with Oxford

Economics , has released a new global report The Hidden Costs of Downtime , which highlights the direct and hidden costs of unplanned downtime .

The survey calculated the total cost of downtime for Global 2000 companies to be US $ 400 billion annually , or 9 % of profits , when digital environments fail unexpectedly . The analysis revealed the consequences of downtime go beyond immediate financial costs and take a lasting toll on a company ’ s shareholder value , brand reputation , innovation velocity and customer trust .

Unplanned downtime – any service degradation or outage of a business system – can range from a frustrating inconvenience to a life-threatening scenario for customers . The report surveyed 2,000 executives from the largest companies worldwide ( Global 2000 ) and showed downtime causes both direct and hidden costs as defined below :

• Direct costs are clear and measurable to a company . Examples of direct costs are lost revenue , regulatory fines , missed SLA penalties and overtime wages .

• Hidden costs are harder to measure and take longer to have an impact , but can be just as detrimental . Examples of hidden costs include diminished shareholder value , stagnant developer productivity , delayed time-to-market and tarnished brand reputation .

The report also highlighted the origins of downtime – 56 % of downtime incidents are due to security incidents such as phishing attacks , while 44 % stem from application or infrastructure issues like software failures . Human error is the number one cause of downtime and the biggest offender for both scenarios .

However , there are practices that can help reduce downtime occurrences and lessen the impacts of direct and hidden costs . The research revealed an elite group of companies – the top 10 % – are more resilient than the majority of respondents , suffering less downtime , having lower total direct costs and experiencing minimal impacts from hidden costs . These organisations are defined as resilience leaders and their shared strategies and traits provide a blueprint for bouncing back faster . Resilience leaders are also more mature in their adoption of Generative AI , expanding their use of embedded Generative AI features in existing tools more than at four times the rate of other organisations .

The combined direct and hidden costs

The repercussions of downtime are not limited to a single department or cost category . To provide a multifaceted view , the report surveyed Chief Financial Officers ( CFOs ) and CMOs , as well as security , ITOps and engineering professionals to quantify the cost of downtime across several dimensions . Key findings on the impacts of downtime include :

• Revenue loss is the number one cost . Due to downtime , lost revenue was calculated as US $ 49 million annually , and it can take 75 days for that revenue to recover . The second largest cost is regulatory fines , averaging at US $ 22 million per year . Missed SLA penalties come in third at US $ 16 million .

• Diminishes shareholder value . Organisations can expect their stock price to drop by as much as 9 % after a single incident , and on average , it takes 79 days to recover .

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