What is the cost of failure?

Failure comes in a number of ways, and this isn’t always just in mobility. This is just in general technology.

If I’m a company who has some sort of an outward-facing solution, or a solution that drives my business, and I work with this solution — what is the cost to me when my solution is not working properly?

What’s the cost to my organization when the solution’s working, but it’s not optimal for my business?

Delta Airlines power outage

And what’s the cost to my business when the solution stops working — like at Delta Airlines?

What did it cost Delta, do you think, when they recently had a power outage at their Technology Command Center in Atlanta and they had to shut down all of their flights, because their main system went down? (One early estimate put the figure at $82 million.)

What is the effect of things like this? If it’s a failure based upon a legacy solution that you refuse to invest in, what is the cost of the failure of the system to meet your needs?

If it’s complete failure of the system — the system just stops working — how does that affect a business?

The Internet of Things raises the stakes

Now everybody is talking about the Internet of Things (Iot), and that’s great. The Internet of Things is a marvel that has built upon itself and will continue to build upon itself, and the things that will come from the technology that is pushing out constant information are really quite fascinating.

However, the Internet of Things is just that — it’s data, it’s information being fed. But a business entity has this process, this thing they do to be in business — whether it’s delivering manufactured products to a buyer, whether it’s performing a service — all of these things have a value. That’s why people pay you.

For example, if someone comes to repair my refrigerator, there’s a value. If there was no value, I wouldn’t pay him.

But what happens when the system that refrigerator repair company uses to order parts — or manage customer interactions, or manage their dispatch, or do billing and receiving — what happens when there’s failure to that system?

How does it impact an organization financially? How does it impact your customer base — and what are the long-term effects?

Some might say that Delta’s failure was just for a day. Okay, well what’s the cost? Financially, how many millions of dollars in free airfare did you have to give away? Upgrades, refunds — all the people who came to work that you had to pay even though your airplanes couldn’t fly? What about all the people who say, “I’ll never fly Delta Airlines again?”

What does a data breach cost?

What does it look like to a company when, say, you have a cybersecurity breach, like Target? What did that cost Target? All of these are aspects of the business.

Cyber attack

Envoy Data Corporation tells us:

The key point here is that hacking is not accidental. You have the information, you did not protect it, and there are consequences. Lost sales, legal costs, free credit checks, stolen intellectual property, and compromised sales lists.

Cost estimates for credit checks range from $58-$100 per person.

You can lose credit card processing for PCI violations, face time and effort to source a solution to fix the issue, and also lose revenue due to bad press.

The top ways to reduce costs are by (1) having a plan, (2) pervasive use of encryption, and (3) control access to data.

These will offset costs by $16 and $13 respectively per capita. But be aware, expensive actions like extensive cloud migration could increase costs by $12 per capita, and outsourcing could cost an extra $14 per capita.

Business used to be simpler

It used to be, you would unlock your front door, put the “Open” sign out, and that’s all you had. You were good to go.

If you were a company performing services, you sent your guy out in the truck, he had a pencil and some paper. Everything was handwritten journals. Your business was simpler.

But now that all of the IoT and everything else is involved in our businesses, there’s a direct impact — and correlation to the impact — when it’s not working, or not working properly.

Is your solution working?

You invested in your routing and scheduling and dispatch. Did you invest in other aspects of your distribution business?

Let’s say you’re a service business, and you bought new trucks and put new tablets in your guys’ hands. But what about the rest of the solution that is now evolving based on the IoT? Is that performing properly?

And if it’s not, what does that cost you as a business? Is there an attrition of customers?

Hackers can now take you hostage

What does it look like when a company with a mobile operation has a hack, or cyberattack, or a system breach? They can be taken hostage by hackers.

One of our cybersecurity experts notes that there are only two kinds of customers: those who’ve been hacked, and those who think they have no problem until they get exposed.

What is the cost of failure? There’s a tangible value you can put on it, and also an intangible cost — customers, people, employees. There’s a loss. As a business, you need to take into account what it is that you’re doing to ensure that you’re not jeopardizing or risking yourself.

What can be done?

So what can we do in order to prevent failure within a solution or a company?

Do an internal analysis of your mobility solutions. Understand where the strengths and weaknesses lie within those solutions.
Look at technology and how it has adopted (or not adopted) new leading practices for businesses today.
Talk with a consultant who can help identify potential failure points in your solution and the technology available to mitigate risk.

Engaging an expert helps organizations understand how to take steps forward securely, maximizing time and minimizing risk of exposure to poor decisions.