Cost an outage for a BIA: lost margin, idle staff, penalties, recovery and reputational uplift, tested against the MTPD and the proposed RTO.
Only the contribution margin on interrupted revenue is a real loss, since the variable cost of serving it was never incurred, and deferred revenue that customers pay later should not be counted at all. Idle staff, pro-rated penalties and one-off recovery work are added at cost, then a reputational uplift stands in for churn — a blunt instrument, but better than the usual practice of pretending the number is zero. The recovery tier and the RTO both have to be paid for, and this is the figure that decides whether active-active infrastructure is prudent or theatre. Treat it as a planning estimate: the inputs are forecasts, so the output is a range dressed up as a number.
Business Impact Analysis
Total impact = (lost margin + idle staff cost + penalties + one-off recovery cost) × (1 + reputational uplift), where lost margin = revenue per hour × outage hours × contribution margin.
MTPD exposure
Impact at the full MTPD = impact per hour × maximum tolerable period of disruption, which is the number that justifies the recovery tier.
Total impact = (lost margin + idle staff cost + penalties + one-off recovery cost) × (1 + reputational uplift), where lost margin = revenue per hour × outage hours × contribution margin. Only the contribution margin on interrupted revenue is a real loss, since the variable cost of serving it was never incurred, and deferred revenue that customers pay later should not be counted at all. Idle staff, pro-rated penalties and one-off recovery work are added at cost, then a reputational uplift stands in for churn — a blunt instrument, but better than the usual practice of pretending the number is zero.
The recovery tier and the RTO both have to be paid for, and this is the figure that decides whether active-active infrastructure is prudent or theatre. Treat it as a planning estimate: the inputs are forecasts, so the output is a range dressed up as a number.
This calculator takes 9 inputs: Revenue dependent on the process, Contribution margin on that revenue, Loaded cost of staff left idle, One-off recovery, rework and overtime cost, Contractual or regulatory penalty per day, Outage duration being modelled, Maximum tolerable period of disruption, Proposed recovery time objective, Reputational and churn uplift on direct losses. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.
Margin. Losing an hour of revenue does not cost you the revenue, it costs you the profit on it, and using gross revenue is the single most common way a BIA overstates impact by a factor of three. Where revenue is merely deferred rather than lost, exclude it and note the working capital effect instead.
Anchor it to something observable — historical churn after past incidents, the discount you have given as a service credit, or the cost of the retention campaign you ran afterwards. If you have nothing, state the assumption in the BIA and run it at two values so the decision is visibly sensitive to it.