People like to put dollar values on outages. There’s no true answer to the question of how much an outage costs an organization. If your company is transaction-based, you can estimate how many transactions were missed, but there are all sorts of other factors that you could decide to model. (Are those transactions really lost, or will people come back later? Does it impact the public’s perception of the organization? What if your business isn’t transaction-based?). If you ask John Allspaw, he’ll tell you that incidents can provide benefits to an organization in addition to costs.
Putting all of that aside for now, one question around incident cost that I think is interesting is the perceived cost within the organization. How costly does leadership feel that this incident was?
Here’s a proposed approach to try and capture this. After an incident, go to different people in leadership, and ask them the following question:
Imagine I could wave a magic wand, and it would alter history to undo the incident: it will be as if the incident never happened. However, I’ll only do this if you pay me money out of your org’s budget. How much are you willing to pay me to wave the wand?
I think this would be an interesting way to convey to the organization how leadership perceived the incident.
4 thoughts on “How much did that outage cost?”
Interesting thought experiment; I think the value would not be in getting their $ amount they would pay, but rather the value would be in how the exercise would reveal their misconceptions related to the complexity context of their part of the organization. Also I would use a set of incidents that are plausible for their role/unit/level in the organization: to get multiple judgments and comparability across multiple managers. Next question is — let’s run the study.
what I have done is: classify the impact of the incident and give them a weighted value for each, for example:
– page view
– api calls
– customer feedback/social media feedback
– direct money loss
– recovery time
– big customer impact