Australian downtime costs climb to AUD $86 billion annually

Splunk has released a report examining the financial impact of unplanned downtime and cybersecurity incidents on Australian businesses. The report reveals potential national costs and outlines concerns around digital resilience.

The report, titled "Downtime: A rising challenge for organisations in Australia & New Zealand", highlights that Australian organisations with over 500 employees experience average financial losses of AUD $251,000 due to unplanned downtime from such incidents, potentially leading to a national cost of AUD $86 billion. It continues the analysis launched last year in Splunk's "The Hidden Cost of Downtime" report by focusing on the financial impacts, root causes, and consequences of downtime.

In New Zealand, the survey indicates businesses with at least 100 employees face an average loss of NZD $211,000, which could result in a national impact of NZD $75 billion. This underscores the escalating threat these issues pose to businesses across the ANZ region.

93% of Australian and 89% of New Zealand business leaders claim to be prepared for unplanned downtime. Yet, the report suggests this confidence may be misplaced as cyber attacks become more frequent and sophisticated. In Australia, 53% of business leaders see cybersecurity incidents as a top concern for the coming year, with New Zealand reflecting similar concerns at the same rate.

The report also highlights insufficient training in cybersecurity preparedness, with 30% of Australian and 38% of New Zealand business leaders stating that their employees lack adequate training. This concern is even more pronounced among the Australian public sector respondents, reported by 52% of leaders.

Most respondents in both countries have encountered cybersecurity incidents leading to downtime, with over 90% of Australian and 85% of New Zealand respondents reporting exposure. Malware, software failures, and phishing attacks are identified as the primary causes of these outages, with phishing being particularly significant in Australia's public and financial services sectors.

62% of Australian and 43% of New Zealand business leaders reported productivity losses due to downtime following cybersecurity incidents and financial and operational burdens. The report indicates that average downtime lasts nearly two hours, while recovery times average about 7.4 days, significantly affecting business operations.

The report outlines a proactive response among ANZ businesses, with 59% of Australian leaders and 44% of those in New Zealand planning to upgrade technology and digital tools. Additionally, preparedness training and investment in emerging technologies like Generative AI and cloud-based security solutions are part of strategic plans for 57% of Australian and 45% of New Zealand business leaders.

Craig Bates, Senior Vice President and General Manager of Asia Pacific at Splunk, commented on the findings, "While ANZ organisations are increasingly prepared for unplanned downtime, there are still pressing issues that exist in ensuring true digital resilience. It is encouraging to see many business leaders investing in new technologies, upgrading digital tools and enhancing employee preparedness – all of which are important strides in the right direction."

"However, digital resilience goes beyond isolated actions. It requires a proactive, unified approach that not only prioritises cybersecurity but also ensures the integrity of systems across their entire digital footprint."

He also noted the role of Australian and New Zealand Governments in enhancing digital resilience: "In parallel, we're also seeing the Australian and New Zealand Governments taking a proactive role in prioritising digital resilience and strengthening cybersecurity frameworks, positioning themselves as key players in global cybersecurity leadership."

"This approach is particularly critical in today's AI-driven era, where leveraging the right technology, combined with accountability and transparency, is key to building strong digital defences across ANZ."