Testing ROI
November 7, 2023

The Cost of Downtime: Performance Testing ROI

Performance Testing

Performance testing ensures that your application withstands high volumes of traffic and can deliver a good user experience to visitors. Obviously, that is a good thing. But how does performance testing translate into dollars? 

In this blog post, we break down how much you can save and earn from conducting performance testing (performance testing ROI) and the cost of application downtime. We’re also excited to share an online testing ROI calculator you can use to calculate your own unique performance testing ROI.

The Importance of Performance Testing

Performance testing ensures your software can effectively handle traffic loads. By conducting performance testing, your developers and testers can preemptively identify any bottlenecks, scalability issues, and potential failures that will impact application speed and functionality.  When these issues are fixed early and often (shifting left), organizations can ensure application quality and value.

Application quality includes:

  • Providing a seamless and optimal user experience through a fast loading website or application.
  • Ensuring application scalability to support growth and/or traffic spikes during events like Black Friday.
  • Ensuring the application remains stable and reliable with no downtime or crashes.

Testing ROI: The Cost of Not Conducting Performance Testing

Not conducting performance testing can take a heavy toll on organizations, since it means the business is risking downtime and outages. Here are 10 types of costs business can expect to endure:

1. Lost Revenue

Slow or unresponsive applications can lead to users abandoning the site. For example, abandoning shopping carts on e-commerce websites during a sale. Users might even switch to a competitor's platform. As a result, every moment of downtime or poor performance might lead to lost sales and revenue, in the short-term and the long-term.

2. Loss of Competitive Advantage

If your site goes down, your competitors can capitalize on that opportunity by targeting your customers, who are looking for uninterrupted service and the ability to browse and purchase.

3. Increased Operational Costs

Fixing performance issues in production requires more developer time and resources than during development. This is due to the complexity involved, the urgency, and the risk of breaking production.

4. Reduced User Base

Users today are less tolerant to slow or glitchy applications. Poor performance can lead to a reduced user base as frustrated users switch to other platforms or services.

5. Damage to Brand Reputation

Word of mouth and user reviews can make or break a product's success. Performance issues can lead to negative reviews and bad press, which can significantly damage a brand's reputation and trustworthiness amongst its users.

6. Compensation and Refunds

Users who experience interruptions, especially during transactions, might require refunds or compensations, adding to the business's costs. This can have long-term effects on customer trust and loyalty.

7. Decreased Productivity

For internal tools and applications, performance issues can lead to reduced productivity, as employees wait for slow-loading applications or have to deal with crashes.

8. Increased Support Costs

A surge in performance-related issues will likely lead to an increase in customer support queries. This means hiring more support staff, increased training, and potential refunds or compensations.

9. Legal and Compliance Issues

In industries with stringent service level agreements (SLAs) or regulatory standards, performance issues can lead to breaches of these agreements, resulting in penalties or legal actions.

10. SEO Impact

For websites, frequent downtimes can negatively affect search engine rankings. Search engines prioritize reliable websites, so repeated downtimes can lead to a drop in organic traffic. Related to marketing, if the organization is running campaigns that direct to the website but the website is down, that is also lost revenue for the business.

Cost of Downtime for an Application During a Major Event Like Black Friday

Downtime for an application, especially on a day as critical as Black Friday or a concert, can have significant financial and reputational consequences for businesses. Here's a breakdown of potential costs.

First and foremost, events like Black Friday are one of the most significant sales events of the year, with many businesses raking in substantial portions of their annual revenue on that day. Downtime directly leads to lost sales opportunities. If an e-commerce platform that usually makes $2 million on Black Friday goes down for an hour, that means a potential loss of over $83,000 just from that hour.

But the impact also goes beyond that hour. If your site is down, customers will likely turn to competitors for deals. Not only will you lose sales for the day, but you might also lose loyal customers in the long run. This could be due to your customers sticking with your competitors, but also due to reputational damage and loss of trust in your ability to deliver.

Downtime doesn’t just impact sales, it also impacts the rest of your team. When downtime occurs, your development and support teams will be overwhelmed, trying to handle the surge of complaints. This will increase operational costs and also create a sense of instability and stress within the workforce. The cost of downtime is also a waste of your marketing and advertising efforts prior to the event.

Cost of Building Your Own Performance Testing Solution

As we’ve established, investing in robust performance testing can help mitigate the risk of costly downtimes.

But should you buy a performance testing solution or build your own?

Building a performance testing solution in-house rather than purchasing an off-the-shelf product comes with its own set of costs and considerations. The required resources and associated costs include:

  • Development Costs - The most apparent cost is the expense associated with the actual development of the tool. This includes salaries for the development team, any software or hardware required, and any other resources needed for development. If you don’t have enough skilled developers in your team, then recruitment costs should be added here as well.
  • Time - Building a tool from scratch can be time-consuming. This can delay other projects or priorities since resources will be reallocated to this project.
  • Maintenance and Upgrades - Unlike off-the-shelf products that typically come with periodic updates and support, in-house solutions require continuous maintenance and manual upgrades. This can lead to recurring costs.
  • Limited Features - Building a tool in-house, especially with time or resource constraints, might result in a solution with limited features compared to commercially available tools.
  • Lack of External Support - Commercial tools usually come with a support team, community forums, and extensive documentation. An in-house solution might lack this kind of extensive support framework.
  • Integration Challenges - Commercial tools often offer integrations with other popular tools and platforms out of the box. An in-house tool might require additional development effort to achieve similar integrations.
  • Training Costs - An in-house tool will be unfamiliar to everyone except the development team. This means potentially investing in training sessions or creating documentation to ensure everyone can use the tool effectively.
  • Scalability Concerns -  As the business grows, the performance testing tool might need to handle larger loads or more complex scenarios. Ensuring scalability in an in-house tool can require further investment and development.
  • The Right Tool? - There's always a risk that the in-house solution, once developed, doesn't fully meet the business's needs or has unforeseen flaws. This can lead to wasted resources and the potential need to eventually invest in a commercial tool anyway.
  • Alternative Opportunity Cost - By building a performance testing solution, you are diverting developers from your core business. These time and resources could potentially be used for other revenue-generating projects or innovations.

See For Yourself: What’s Your Cost of Downtime?

Downtime has a critical business impact on all organizations, but the specific toll it takes is unique for each business. To help, we’ve created an easy-to-use online calculator so you can calculate the cost of downtime for your specific business.

The calculator takes into account the following parameters:

  • The cost of downtime for your specific industry.
  • The number of virtual users you will be testing.
  • The cost of not meeting the SLA you’re committed to.
  • The cost of your specific downtime during Black Friday, the holiday season, or other peak traffic events.
  • The cost of building a performance testing solution yourself, including infrastructure, development, and ongoing management

Try the calculator out for yourself and discover your own ROI of performance testing. By using the calculator you can:

  • Understand the dollar equivalent loss of productivity when not performance testing.
  • Make informed decisions, based on actual cost data, so you can prioritize processes, systems, and resources.
  • Communicate the risks of not conducting performance testing to stakeholders.

Try out the calculator and enhance your technological resilience today.

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