Expert Tips for ITIL Demand Management for 2017 and Beyond

ITIL Service Strategy determines the types of services that should be offered by the IT organization in order to meet the needs of its customers. This publication covers the Service Portfolio Management, IT Financial Management, Demand Management, Business Relationship Management, and IT Strategy Management processes. In order to delineate responsibilities, there are several Service Strategy Roles, including  (but not limited to) the Business Relationship Manager who is responsible for building and maintaining a quality relationship with customers, the Demand Manager who is the owner of the Demand Management process, the Financial Manager who is responsible for finances and budgets, the IT Steering Group who sets the IT service strategy, and the Service Portfolio Manager who manages and develops the service portfolio.  

In order for your IT organization to effectively deliver services to customers, it is important to understand what services are needed and when they are needed. This is commonly referred to as Pattern of Business Activity (PBA). Demand Management is the ability to understand your customer’s patterns, anticipate their changing needs, and influence behaviors related to their demand for services. Keep in mind that demand is not stagnant; rather, it is constantly changing based on a variety of influencers, including your industry, usage patterns determined by time of year, weather, a new product launch, and many other factors. 

The Demand Management process interfaces and communicates with several other ITIL processes, including Capacity Management, Availability Management, and Service Level Management. Demand Management also depends on information from customers - it receives customer information regarding the demand for services and shares that information with other processes, such as capacity management.

According to IT industry legend, published author, and speaker Malcolm Fry, Capacity and Availability Management are very closely related to Demand Management. Consider this: if a call center needs to handle 1,000 calls each day, do they have the staff to handle the 1,000 calls as they arrive? The ability to provide the volume is the process of Capacity Management while Availability is responsible for providing the service when it is required. You may have enough staff to handle the volume, but that doesn’t mean that they are in place at the right time. For example, what if 50% of the calls arrive in the first hour? The Demand Management process will aid in determining what you need in place to handle the calls as they arrive. You could describe demand as workflow management.” 

Availability Management (ensuring that the IT infrastructure and tools are in place to meet the availability needs of the business) is equally important. For example, if you anticipate high demand for web orders of a certain product during the holiday season, you must ensure that you have the infrastructure in place (website is available) to handle the demand. Service Level Management, which documents the IT organization’s service level target (timeframe and responsibilities) to deliver services to a customer, is also crucial. As an example, if your service level agreement states all calls will be answered within a certain time frame, you must have the people in place at the right time to handle the demand. 

All of these efforts to supply the capacity and availability to meet the demand for services has a direct influence on budget and finance. The business must plan ahead in order to develop plans for future budgeting. 

The examples above demonstrate how Demand Management can be utilized to effectively deliver services to customers. When properly utilized, the Demand Management process can positively impact overall business operations. 

According to John Custy (@ITSMNinja), award winning service management educator, “Everyone should have Demand Management. To ensure that your services are designed correctly, and operations can manage them, the demand for each service needs to be understood. One challenge however, is that typically only more mature organizations understand the value of Demand Management.” 

Ray McKenzie, Founder of Red Beach Advisors, a management and business consultancy specializing in strategy, process, systems, and operations agrees.

“Demand Management is important for organizations who are following the ITIL framework, and those who are not,” he says. “Demand Management is essential in the planning, execution, and support of any company’s products/services. A thorough understanding of product or service demand can help a company avoid future challenges, including customer satisfaction issues and confusion surrounding service expectations.”

Intelligent data can help identify the demand for services, and therefore is an essential element of the Demand Management process. In order to accurately meet the demand, you must know what services are in demand and when. 

For example, John Custy states, “Collecting data that identifies the real workload - rather than a generic guess - is an essential planning element. Take a support center that wants to answer 85% of calls within 30 seconds. They need to make sure they have enough staff, but they can’t do that without understanding the demand. Are the calls spread evenly across 24 hours?; Is each week the same?; Is the end of the month busier?; What type of calls are they dealing with? This is all essential information for IT operations to plan. Ops must understand the real workload or they end up with either too little or excess capacity. And, if you are too slow in answering, you lose customers.”

Patterns of Business Activity are a great resource for understanding the usage of services. This data may include how often services are used, when they are used, what services are used, where they are used, and who uses the services. Understanding PBAs will ensure the right technical resources and staff are in place to deliver quality services. 

Collecting the data that feeds the Demand Management process is one of the biggest challenges faced by IT Demand Managers. Ray McKenzie states that “Demand Management relies on several points of data to properly assess demand and many companies have trouble gathering that data. In some situations, product owners can be biased and express false information about the demand for their product, creating inaccurate information causing you to increase capacity to deal with demand that isn’t really there.”

Although data collection can be difficult, it is not impossible. Jarod Greene, VP of Product Marketing at Cherwell Software, firmly believes that “The solutions you implement to track service delivery are critical to success. Gathering as much information as you can, creating historical records of service usage along with the ability to get real-time metrics to intelligently support decision making will impact everything from customer satisfaction to profitability.”   

Finally, Malcolm Fry believes there is sometimes confusion with processes. “Someone may say ‘we don’t have enough capacity’ when in fact you do have enough capacity, but you actually couldn’t handle the demand on that capacity,” he says.

The ever-changing customer demand for new technology makes IT service delivery increasingly complex. Best practice frameworks, such as ITIL, intend to provide guidance to IT organizations, and help them align with business goals, improve customer satisfaction, and increase overall profitability. Organizations are also beginning to apply Lean Principles to IT service management. When applied in conjunction with the ITIL framework, Lean thinking can guide an organization in implementing only processes that will deliver business value, eliminate waste, and continuously improve with the goal of efficiency at the forefront. 

The ITIL Demand Management process is often overshadowed by other processes, such as Incident, Problem, and Change Management. This does not mean the process is less important, it simply requires understanding and focusing on processes that are considered ‘more advanced’ such as Capacity Management, Availability Management, and Service Level Management.’ Assigning a process owner who is also a leader in your organization (one who understands your business needs, is involved in customer relationships, and can navigate you internal policies) is a good place to start. This person can bring together the right decision makers to help integrate Demand Management into your overall business strategy.  

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