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IT crisis cost uni millions of kroner

After all the University of Copenhagen IT systems were down for more than 24 hours, the math starts: How much did the breakdown cost? Business professor helps us make a guess

All servers are powered up, and e-mails have started to flow through the system. But it may be time to make a first estimate of the cost.

This is after the IT breakdown that effectively knocked out the University of Copenhagen for the whole of Monday and, for some systems, part of Tuesday too.

Jens Kristian Elkjær-Larsen is associate professor at the Copenhagen Business School and an expert on business economics. We asked him to help us make an estimate of the costs.

Not completely dependent on IT

»We need to first decide what to calculate. Should we calculate how much ‘production value’ has been lost: this is very hard to calculate as it focuses on how you estimate the production value of a university? Or, alternatively, we can work out how much of the costs in terms of salary has the university not had any benefit from during the IT breakdown. This is a little easier, but still a guess,« he says.

You can estimate this cost by taking the total wage, divide by the number of working days, and multiply by the number of days with no IT. With a total wage sum of DKK 4.2 billion in 2010, this calculation would put the cost in lost working days at around DKK 20 million.

But the University of Copenhagen as an institution is of course not completely dependent on functioning IT systems.

»Some employees are not completely dependent on IT, or can at least delay their IT-related work until later,« explains Jens Kristian. Some meetings can be pushed forward, making the day not a complete waste of time.

Need to guess

This is in contrast to a company like for example a bank.

»If it was Danske Bank, then you could say that it is impossible to run the bank at all without IT systems.«

So you have to make an estimate. Elkjær-Larsen estimates that about half, 50 per cent, of all work cannot be done, or cannot effectively be delayed. This would put the cost to the University of Copenhagen of around DKK 10 million in ‘wasted salary’ for the IT crash, solely in terms of lost labour costs. However, this calculation does not include any extra costs at the IT department, which the University Post has not been able to request, access, or estimate.

Director: Better to look forward

We asked the director of the University of Copenhagen Jørgen Honoré for his own off-the-cuff calculation of the total cost – direct costs in connection with the IT breakdown, and lost labour time for the whole uni.

He writes to the University Post that he would prefer not to spend his time doing the calculation, but the IT breakdown »is expensive, and it should not, of course, happen,« he writes to UniversityPost.dk and adds:

»The fact is that it is old hardware that has broken down shortly before having to be switched out. This shows clearly that the renewals that we are working on are badly needed. So we are using our time in moving forward quickly«.

Any ideas on how else you could calculate the cost to the University of Copenhagen? Write in the comment field below.

miy@adm.ku.dk

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