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Compliance at Speed by Mark Lustig

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Challenges to Consider

In today’s competitive landscape, business must always consider the performance challenges involved in meeting user expectations. Notably, you must minimize the cost of performance-related outages and enforce service-level agreements (SLAs).

Quantifying the Cost of Poor Performance/Outages

Understanding the costs of an outage aids in understanding the return on investment (ROI) of proactive performance engineering. Remember, operational costs “hide” the true cost of system development. Costs of downtime in production (post-deployment) include the following:

Recovery costs
These include costs incurred during problem identification, analysis and resolution, and validation testing, as well as external support costs and data recovery costs.
Productivity costs
These are calculated as duration of outage × total persons affected × average percentage of productivity lost × average employee costs.
Lost revenue
This is calculated as duration of outage × percentage of unrecoverable business × average revenue per hour.

Consider the example of a company that spends millions of dollars on application support instead of new application development. In this case, each 15-second timeout in the enterprise application integration (EAI) infrastructure could result in a $5 call to an outsourced contact center. Over the course of six months, this could result in unanticipated support costs of almost $3 million—funds that could otherwise have been used for new development efforts. ...

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