Let us start by addressing what a major incident is in the context of IT services. We define a major incident as an event that creates a significant, negative impact or urgency for a business or organisation. They demand a response, strategy and direction beyond the capabilities of a standard incident management processes.
Example 1: The value of Major Incident Management for large organisations
Take a major retailer as an example…
Many large, well-known major retailers rely on self-service point of sale devices and point of sale terminals to take payment for goods. In busy periods they may take around £4,000 of transactions per second. That equates to £240,000 per minute and £14,400,000 per hour. That is a substantial loss of earnings for every hour that the point of sale devices and payment terminals are down.
Of course, the retailer won’t just lose millions of pounds worth of sales. The impact of such an outage is far greater. When customers become frustrated it can quickly result in negative press and social media coverage, which can seriously damage the brand and company’s reputation. There may even be a longer-term impact as the retailer may lose some valued customers, therefore affecting sales in the long-term.
The damage resulting from that one hour outage includes:
- Productivity loss (staff cannot do their job)
- Financial loss (£14m per hour)
- Reputational damage (both immediate customers and shareholders/ the market)
- Regulatory failings (failing to meet the regulatory standards/ maintain data records)
Example 2: The value of Major Incident Management for smaller organisations
Let us look at the potential impact of a major incident on a smaller organisation. Take for example a professional services organisation that has three office locations in Europe and experiences a complete loss of network access. As a result there are 1000 employees across the three locations that cannot login or access the network.
Each employee costs the business around £145 per day. If the network remains down all day, then the direct outage cost is £145,000 per day. Of course the impact is far wider, as it will affect project deadlines that were missed, as well as the negative long-term impact on customers, partners and suppliers.
These two examples clearly demonstrate the huge impact that a major incident can have on any business.
The list of examples is endless as almost every industry relies on technology to operate. Mature organisations will often specifically identify which business services delivered by IT are classed as critical, and in turn they will clearly identify what constitutes a major incident for their business.
Learn what IT Major Incident Management is here.