Minimizing the impact of downtime

Although it's no secret that avoiding Web downtime is a No. 1 priority for CTOs everywhere, many are still toiling to turn the costs associated with preventing downtime into bottom-line savings for the company.

To determine precisely how much a crippled Web site may or may not cost a company over time, a CTO must consider a variety of accounting methods. Producing accurate estimates may help justify important decisions and expenditures, including outsourcing and technology costs.

Identifying potential losses

First and foremost, when determining which metric will best quantify the consequences of online business loss, CTOs need to consider which aspects of their business are most vulnerable to lost seconds, minutes, and hours, says Sean Moriarity, vice president of technology at Pasadena, Calif.-based TicketMaster Online-Citysearch.

Depending on how active a company's site is throughout the day, examples of business losses following an outage -- in many cases irretrievable losses -- include missed sales opportunities from advertisers and customers, damaged credibility, and brand name degeneration, according to Donna Scott, an Austin, Tex.-based analyst at Gartner Group.

"For the content sites, it creates a bit more work, because [outages are] not as clear to the bottom line," says TicketMaster's Moriarity. "It's a little different when Yahoo has an outage vs. eBay, for the same reason that [it's different] if ABC News went off the air vs. the Home Shopping Network. One is eyeballs; the other is transactions."

Moriarity says a common-sense, standard ROI approach typically serves a CTO best for prioritizing sensitive areas that could be harmed by Web site downtime. TicketMaster Online-Citysearch has set the importance of its three discrete business units in this order: ticketing, then online personals, and finally the Cityguide business. In this company's case, ticketing is the most crucial environment given that Ticketmaster Online-Citysearch is paid per ticket sold online.

"For each ticket [we] don't sell -- and we sell a lot at peak -- that hits the bottom line," he says. "When you live with these business realities everyday, generally the answers are very obvious."

Looking for hidden costs

Lost revenue may be the most obvious consequence of Web site downtime, but there are many other factors to consider, says KBKids.com CTO Shawn Davison. Other unpredictable elements that should be considered in the event of an outage or site glitch include customer confidence, investor interest, and negative publicity.

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