In a previous blog, I discussed my long search to find out the failure rate of FTP file transfers. Without recovering the same ground twice, the failure rate is 6.47%1. And I promised to discuss the impact that has on organizations.
To understand the impact of FTP’s high failure rate, we need to answer the question “What kind of business process can endure a failure rate that high?” File transfers are made to support business processes, so the real impact of their failures to the business is their impact on the business process they support. The answer is none. Even non-critical business processes with that high a failure rate would draw the attention of the organization and be improved. And the business processes supported by file transfers are most likely at least important, if not critical.
So if FTP file transfers fail 6.47% of the time then the business processes they support are failing 6.47% of the time, which would be painful if not intolerable to organizations. So it is logical to conclude that those business process failures are being patched over, most likely, with manual intervention. In the same survey we asked “What do you estimate is the average time it takes to troubleshoot and resolve an FTP file transfer error?” and the average answer was 28 minutes. That is 28 minutes of time for a talented IT professional to resolve the error. Now we have enough information to calculate the cost to an organization.
A simple way to calculate some of the costs of using unreliable FTP is with this formula: Total File Transfers x 6.47% x 28 minutes of IT hourly salary. While this formula easily calculates a real number, it is only a starting point for the total cost of unreliable FTP to the business. We have calculated the IT cost to fix the error, but we haven’t included the damage from a minimum 28 minute delay in the business process, which may impact customers or partners.
And that 28 minute delay is very conservative estimate, since it assumes that the failure is found out and corrected as soon as it happens, not that the organization finds out about the failed FTP transfer and business process through a customer complaint. It also doesn’t include the impact of that business process delay on subsequent business processes like billing, production, ordering, etc. What if there are service level agreements tied to the file transfers, which carry penalties. Calculating the IT cost to fix is just the tip of the iceberg of total costs to an organization from FTP failures, however, it is good starting point because it is an easily understood real number. As one digs deeper the costs will only grow. So maybe it is worth spending a few minutes to calculate this for your organization and chat with the IT department about their specific use and experience with FTP, which may lead you to look for a more reliable alternative. For more information about your organization’s risk exposure to FTP, check out the FTP Risk Advisor and create a custom risk report.
1 The 2013 Vanson Bourne B2B Integration and MFT Global Study for IBM