No company likes downtime, but some have far less tolerance for it than others – and are more than willing to pay to mitigate their downtime risk. The job for electrical contractors and others involved in uninterruptible power supply (UPS) deployment design is to determine what each customer’s level of risk tolerance is and design accordingly.
It all starts with the cost of downtime for your customer. While it will vary by industry, nearly all large enterprises (more than 1,000 employees) report that a single hour of downtime costs more than $100,000, according to a survey by Information Technology Intelligence Consulting (ITIC). Eighty-one percent of enterprises surveyed said the costs exceed $300,000 per hour while 33% said downtime costs $1 million per hour or more.
ITIC found some vertical industries for which downtime costs more than $5 million per hour, including: banking/finance; healthcare; manufacturing; retail; and transportation and utilities.
Even many small and midsized businesses (SMBs) with 150 employees or fewer report high costs from downtime, with 47% of them telling ITIC that a single hour costs them $100,000 in lost revenue and employee productivity.
Calculating the cost of downtime
To determine what the actual cost of downtime is for a specific customer, calculate the cost of lost labor (including benefits), multiplied by the number of employees an outage would affect. On top of that, calculate how much revenue the company makes every day and how much of it would be put in jeopardy by an outage. It’s not hard to see how the costs can quickly get quite high for verticals like retail, financial services and manufacturing.
Consider a semiconductor manufacturing plant. If a process in the plant abruptly stops, it may take days or weeks to restart, and the plant will likely have to scrap the lot that was in production. Consequently, such plants go to great lengths to protect against power disruptions – and anything else that may threaten uptime.
Going through a cost-of-downtime analysis with customers will shed light on which type of UPS architecture makes the most sense. While designs that offer greater levels of protection will be more expensive, if they prevent even an hour or two of downtime, they may be well worth it for companies in some verticals.
Factor in Maintenance
Keep in mind also that if a UPS is to work as intended, it must be properly maintained throughout its lifecycle.
Customers have several options when it comes to UPS maintenance, beginning with a preventive maintenance contract with their UPS supplier. Such contracts typically cover services such as a technician coming by once or twice per year to visually check items such as UPS connections, filters, capacitors, batteries and fans. Any component that appears to be in danger of failing is replaced.
A step up from preventive is a proactive maintenance plan. This includes the same visual inspections, but also involves replacing certain components based on a manufacturer’s schedule of their expected lifecycle. The approach is similar to automobile maintenance, which requires various part replacements at certain time or mileage intervals. For a modular UPS, for example, it’s recommended to replace batteries every 3 to 5 years (depending on usage, run-time requirements, environment and other factors) and components such as the power modules after 10 years.
In the past few years, some UPS manufacturers have implemented yet another type of maintenance: predictive. Predictive maintenance essentially takes advantage of Internet of Things (IoT) technology, consistently collecting data from UPSs about their health and using it to identify trends that point to the need for maintenance or component replacements. With this approach, companies only replace components that actually are in danger of failing, whether that’s before or after their scheduled lifespan. (To learn more, download the free white paper, “Predictive Maintenance Strategy for Building Operations: A Better Approach.”)
Each of these maintenance plans comes with an associated cost that should be factored in to your risk analysis. Just as a UPS is intended to mitigate risks associated with power disruptions, a maintenance plan mitigates the risk of a UPS failing. Check out our business continuity resource site to learn more about UPS solutions. Also, you can download our complimentary eGuide, “UPS Basics for Electrical Contractors & Specifiers: How to Choose, Configure and Cost-Justify,” to evaluate the best UPS options.