Calculating the cost of slow network performance

Given the extent to which most businesses rely on internet-based tasks and platforms these days, it’s no surprise that the costs associated with even brief network outages can be exorbitant. However, while they may seem innocuous because they’re so common, network slowdowns can exact an even heftier toll.

What causes network slowdown? There are many reasons, but it comes down to unreliable, inconsistent “throughput,” which refers to how much data actually travels through a channel regardless of the channel’s capacity to carry data, a.k.a., its “bandwidth.” You may have a certain amount of bandwidth, but factors such as how many users you have, electrical interference across the wires you’re using and computational system limitations can negatively impact throughput.

Because internet services are typically still available when networks are slow, it’s likely you’ve never stopped to evaluate the impact network degradation can have on your business. If you think that because work is still getting done, the associated costs must be low, you’d be mistaken: in one analysis, companies reported that poor connectivity amounted to 71 hours of lost productivity per employee annually. Based on a 40-hour work week, that’s nearly the equivalent of everyone in the office taking an extra two weeks off each year.

"Productivity loss due to poor network connectivity amounts to 71 hours per employee each year."

Tech Research Asia

Why slow performance hurts

Aside from work taking longer or not getting done at all, the report identified some inconspicuous ways poor connectivity can hurt businesses. These include:

Low collaboration and morale: Given the rise of remote and mobile workforces, the vast majority of companies rely on online collaboration tools more than ever before. According to one survey, nearly nine in 10 professionals use online collaboration tools at least once a week. From video conferencing tools to platforms such as Google Docs, these tools are used to communicate with colleagues and customers and perform other crucial functions. But when networks are slow, video chats can be choppy or frozen and shared files, especially large ones, can become inaccessible, reducing cooperation within teams and rapport with customers. When their jobs become difficult for these reasons, employees get frustrated, lowering morale and ultimately slowing productivity.

Data gathering and access: An increasing number of business functions hinge on a steady stream of data, often transmitted to cloud apps for processing, analysis and storage. However, when networks run slower than expected, the ability to capture, transmit, process and access data can be hindered; and if networks are especially slow, data can even be lost.

Customer engagement and interaction: Sales and customer satisfaction often depend on a high degree of online availability. Customers expect to quickly access key information on your websites, apps and other online properties and, if you offer e-commerce, they expect to find and be able to pay for purchases instantly. If network slowdown impedes the customer experience, your bottom line can seriously suffer. In fact, nearly half of consumers expect web pages to load within two seconds or less, and four in 10 will abandon a website that takes more than three seconds to load. Slow-loading websites can also affect your Google search rankings, making it harder for customers to find you in the first place.

Fighting slow network performance

Fast internet has become a business imperative. Fortunately, there are steps you can take to ensure your network is as fast as you need it to be. These include:

Getting fibre internet: With fibre optic cables, information travels at the speed of light, whether you’re uploading or downloading. Additionally, fibre cables do not conduct electricity, meaning that unlike copper cables, they are not vulnerable to electrical interference.

Select a cloud or colocation provider with data centres that are close to home: Latency – the slowdown that occurs as data travels from your premises to another location and back – is another factor that can affect speed. According to one study, cloud-based applications can run up to 20% faster when the data is located nearby..

Check your SLA: Your service-level agreement (SLA) will include network performance metrics that your provider is obliged to meet. This includes upload and download speeds. Not all providers can offer the same degree of speed, so before you commit, take a close look at your potential provider’s SLA.

Network slowdowns can take a big toll on your business. But they aren’t inevitable if you take some simple precautionary steps.