Emma Okonji examines the impact of technology service downtime on businesses and how it affects customers and the economy
Technology, no doubt, is fast driving businesses and speeding up transactions. But despite the fact that technology has become a catalyst for business growth and development, technology service downtime could also be devastating and cause sleepless nights to service providers and customers, if not properly handled.
One can be quick to say that we are currently in the tech age, the era of mobility. Virtually every aspect of our daily life is connected or affected by information and communications technology (ICT), systems and applications. Our television sets, home theatre and air conditioners are now inter-connected and remotely programmed and controlled via internet connectivity. With mobile devices, we have endless possibilities on our palms. We can make payment for goods and services, transfer and receive money, open or operate a bank account on-the-go. Travelling also becomes easier as one can book a flight, reserve a hotel room, or pay for a bus ticket from any location.
In offices, doors are now automated with chips-encrypted cards that enable access. Car stereos and mobile phone devices are now linked, providing seamless communication while on wheels.
Telecom, airline, hospitality, transport and financial services, the media and e-commerce platform operators are among leading sectors in Nigeria that leverage the power of technology. The emergence of tech start-ups and tech hubs has also lent credence to the potential of Nigeria as a strategic market for the development of ICT generally. In spite of these advantages, the same technology could fail for several reasons and cause serious downtime in business that could lead to heavy financial loss and business setback.
Technology as next frontier
Experts have said tech is the next frontier of socio-economic development. No wonder businesses and organisations, regardless of sector, industry or size, have continued to give priority and allocate sizeable budgets to the automation of their processes, tapping the huge benefits that technology impacts on the value chain.
Organisations seeking innovative ways to deliver efficient, speedy and qualitative products and services, create platforms for positive customer experience, using appropriate technology. Investment in the ICT sector in Nigeria was estimated to be about $70 billion as at 2017 contrasting with $50 million recorded in 2001.
The telecoms industry had in the last four years, remained resilient even in the face of most daunting economic challenges the country has ever experienced. The industry has made a quarterly contribution of between N1.4 trillion to N1.5 trillion to the nation’s GDP, according to the statistics released by the National Bureau of Statistics (NBS). There were 174 million active subscribers on the nation’s telecommunications networks as at January, 2019, while the figures for internet users hit 113.8 million in the same month.
According to the Executive Vice Chairman, Nigerian Communications Commission (NCC), Prof. Umar Danbatta, the significant leap was a result of the issuance of Digital Mobile Licences (DML).
Notwithstanding the exciting narratives about the power of technology, businesses, organisations, institutions and users of their services, however, have had occasions to face the challenges and disappointments to which even technology is susceptible. Outages or hiccups commonly known as downtime or disruption of services, are some of the limitations technology-dependent sectors and industries are familiar with. However, downtime is not peculiar to Nigeria. It is a global phenomenon.
For example, in 2017, British Airways experienced a major systems failure that put more than 75,000 passengers on the edge and cost the airline over $68 million in passenger reimbursement. HSBC, one of the world’s leading banks, and Royal Bank of Scotland also suffered information technology (IT) outages that affected thousands of their online customers and resulted in temporary loss of productivity and revenue.
In Nigeria it is not different for service providers and customers. Daily, customers of telecom firms besiege the customer care centres or make frantic calls to complain about service downtime resulting either in inability to recharge, make calls or use their data. Often, customers get to their banks and they must wait for ‘network to come’ before they can be attended to. At some instances, payment channels such as Automatic Teller Machine (ATMs), Point of Sale (PoS) and mobile apps are down because of IT outage. Routine system maintenance or major system upgrade or software migration, sometime, becomes a nightmare for banks.
Technology-dependent service providers witnessed many unsettling moments in 2018.Customers of many telecom firms experienced persistent poor quality of service, dropped calls, undelivered text messages and buffering internet connectivity. Many banks had systems’ breakdown and operations went comatose. Customers, who could not withdraw money, make transfer or use online payment channels, were angry. Some threatened to shut down bank operations or close their accounts. Unsuccessful log-in to airline portals to book flight tickets, and flight delays or cancellation drew the ire of dissatisfied passengers.
Service providers’ experience
What the customers are not aware of, however, is that the issue of downtime goes beyond the service providers. Downtime is often caused by a combination of environmental factors such as unsteady electric power supply. The power problem alone has many attachments including high cost of alternative sources of power and attendant increase in overhead cost. Power surge can also cause damages to appliances. Banks, which subscribe to shared bandwidth option because of high cost of service charged by Internet Service Providers (ISPs) and telco networks, sometime experience service disruption because of poor network. Thunder strike equally affects hardware like modem, router, switch and radio systems, while software failure can occur. Human error in the configuration of network, and destruction of network cable and underlaid fibre optics by road constructors and vandals are some other factors. Natural disasters such as flooding and acts of terrorism also come to mind.
Impact on economy
Downtime can impact significantly on the national economy. IT operations evangelist at Splunk, Guillaume Ayme, citing recent research into IT outages carried out by Quocirca, said:”The average cost of service downtime to a financial services organisation is over £105,000 per event with the value of more significant outages being far higher. With companies averaging three outages per month, losses can be significant over a financial year – £3.78 million over 12 months for an average financial institution. Customers have high expectations of their financial services providers, so the reputational impact can be considerable, too.”
For a country like Nigeria that is just at the base level in cashless policy, having the correct understanding of the challenge matched with the appropriate strategy in place can ensure businesses mitigate and even prevent this flipside of technology. Hence, the federal government must redouble efforts in bridging the gaps in critical support infrastructure such as steady electric power. Though it is a commendable feat that the implementation of the National Broadband Plan (2013 – 2018) attained 31 per cent mark by December 2018, experts are of the view that government should set a higher broadband target to meet the growing demand for broadband access.
Experts have equally called on service providers to continuously invest in technologies and people, and as well adopt best practice operational activities and processes.
The need for interventions against operational downtime is because while IT systems outage is sometimes unavoidable, downtime doesn’t have to be.