But what is demand management and why doesn’t ITIL give it the attention it deserves?

ITIL defines demand management as “activities that understand and influence customer demand for services and the provision of capacity to meet these demands” and portrays demand management as a key activity of the capacity management process.

Yet, most organizations adopting ITSM initially focus on the service support processes such as incident and change management relegating capacity management and more “advanced” processes to the future. Meanwhile, in other areas of the IT organization, demand management is the hot topic as request for projects often outstrips the resource capabilities of service providers struggling just to keep the lights on.

IT leaders need some method, process, technique or silver bullet to help them get a handle on all the work entering the organization.

Every large IT organization is thinking about or implementing some form of demand management. But very few companies are thinking about the demand management discipline in the context of IT service management. ITIL’s capacity management process, which addresses demand management, is typically addressed much later in an ITSM implementation program initially focused on closing gaps in incident, problem and change management.

Meanwhile, many IT groups are forced to consider demand management to address short-term, tactical needs. However IT’s views of what demand management is and how it should work are heavily influenced by claims from vendors of IT portfolio management systems and the prognostications of research firms. Even if ITSM experts are engaged in the demand management conversation, they will quickly discover the paucity of practical ITIL guidance about demand management.

Closing This Gap

Ideally, the best place to begin is to partner with your customers on the development of a demand management process as it’s their demand you’ll be managing! Educate them on the benefits of an effective demand management process and what it will mean to them. It is important to gain their support early. On the other hand, and depending on your organizations maturity, there is so little best-practice guidance from ITIL, COBIT and ISO 20000 that your new demand management process will largely be crafted from scratch. It might advisable to begin with internal process development and capability assessments so you can help guide discussions with your customers while managing their expectations.

Demand management, with the introduction of ITIL v3, has received slightly more attention but not nearly enough for today’s fast moving organizations. Perhaps some complimentary guidance from the ITIL community will delve deeper into demand management. For now, you can, and probably should, treat demand management as a process separate from, but still highly interconnected with, capacity management.

The reason is most organizations have far more pain points with work intake, prioritization and planning of the people resources required to deliver and support their services than with hardware and software capacity issues.

Illustrate the demand management process using the same techniques and tools employed to define other ITIL processes. You’ll first need to describe the objectives, scope, policies of demand management. Demarcate the roles and responsibilities of the demand management process participants and specify which controls and metrics will be monitored to gauge effectiveness of the demand management process. IT organizations endeavoring to perform like service providers are faced with the constant struggle to do more with less. There is simply more requests for work than resources. Demand management is commonly proposed as a way to understand and throttle demand from customer.

But what is demand management and why doesn’t ITIL give it the attention it deserves?

ITIL defines demand management as “activities that understand and influence customer demand for services and the provision of capacity to meet these demands” and portrays demand management as a key activity of the capacity management process.

Yet, most organizations adopting ITSM initially focus on the service support processes such as incident and change management relegating capacity management and more “advanced” processes to the future. Meanwhile, in other areas of the IT organization, demand management is the hot topic as request for projects often outstrips the resource capabilities of service providers struggling just to keep the lights on.

IT leaders need some method, process, technique or silver bullet to help them get a handle on all the work entering the organization.

Every large IT organization is thinking about or implementing some form of demand management. But very few companies are thinking about the demand management discipline in the context of IT service management. ITIL’s capacity management process, which addresses demand management, is typically addressed much later in an ITSM implementation program initially focused on closing gaps in incident, problem and change management.

Meanwhile, many IT groups are forced to consider demand management to address short-term, tactical needs. However IT’s views of what demand management is and how it should work are heavily influenced by claims from vendors of IT portfolio management systems and the prognostications of research firms. Even if ITSM experts are engaged in the demand management conversation, they will quickly discover the paucity of practical ITIL guidance about demand management.

Closing This Gap

Ideally, the best place to begin is to partner with your customers on the development of a demand management process as it’s their demand you’ll be managing! Educate them on the benefits of an effective demand management process and what it will mean to them. It is important to gain their support early. On the other hand, and depending on your organizations maturity, there is so little best-practice guidance from ITIL, COBIT and ISO 20000 that your new demand management process will largely be crafted from scratch. It might advisable to begin with internal process development and capability assessments so you can help guide discussions with your customers while managing their expectations.

Demand management, with the introduction of ITIL v3, has received slightly more attention but not nearly enough for today’s fast moving organizations. Perhaps some complimentary guidance from the ITIL community will delve deeper into demand management. For now, you can, and probably should, treat demand management as a process separate from, but still highly interconnected with, capacity management.

The reason is most organizations have far more pain points with work intake, prioritization and planning of the people resources required to deliver and support their services than with hardware and software capacity issues.

Illustrate the demand management process using the same techniques and tools employed to define other ITIL processes. You’ll first need to describe the objectives, scope, policies of demand management. Demarcate the roles and responsibilities of the demand management process participants and specify which controls and metrics will be monitored to gauge effectiveness of the demand management process.
IT organizations endeavoring to perform like service providers are faced with the constant struggle to do more with less. There is simply more requests for work than resources. Demand management is commonly proposed as a way to understand and throttle demand from customer.

But what is demand management and why doesn’t ITIL give it the attention it deserves?

ITIL defines demand management as “activities that understand and influence customer demand for services and the provision of capacity to meet these demands” and portrays demand management as a key activity of the capacity management process.

Yet, most organizations adopting ITSM initially focus on the service support processes such as incident and change management relegating capacity management and more “advanced” processes to the future. Meanwhile, in other areas of the IT organization, demand management is the hot topic as request for projects often outstrips the resource capabilities of service providers struggling just to keep the lights on.

IT leaders need some method, process, technique or silver bullet to help them get a handle on all the work entering the organization.

Every large IT organization is thinking about or implementing some form of demand management. But very few companies are thinking about the demand management discipline in the context of IT service management. ITIL’s capacity management process, which addresses demand management, is typically addressed much later in an ITSM implementation program initially focused on closing gaps in incident, problem and change management.

Meanwhile, many IT groups are forced to consider demand management to address short-term, tactical needs. However IT’s views of what demand management is and how it should work are heavily influenced by claims from vendors of IT portfolio management systems and the prognostications of research firms. Even if ITSM experts are engaged in the demand management conversation, they will quickly discover the paucity of practical ITIL guidance about demand management.

Closing This Gap

Ideally, the best place to begin is to partner with your customers on the development of a demand management process as it’s their demand you’ll be managing! Educate them on the benefits of an effective demand management process and what it will mean to them. It is important to gain their support early. On the other hand, and depending on your organizations maturity, there is so little best-practice guidance from ITIL, COBIT and ISO 20000 that your new demand management process will largely be crafted from scratch. It might advisable to begin with internal process development and capability assessments so you can help guide discussions with your customers while managing their expectations.

Demand management, with the introduction of ITIL v3, has received slightly more attention but not nearly enough for today’s fast moving organizations. Perhaps some complimentary guidance from the ITIL community will delve deeper into demand management. For now, you can, and probably should, treat demand management as a process separate from, but still highly interconnected with, capacity management.

The reason is most organizations have far more pain points with work intake, prioritization and planning of the people resources required to deliver and support their services than with hardware and software capacity issues.

Illustrate the demand management process using the same techniques and tools employed to define other ITIL processes. You’ll first need to describe the objectives, scope, policies of demand management. Demarcate the roles and responsibilities of the demand management process participants and specify which controls and metrics will be monitored to gauge effectiveness of the demand management process.
Recognize that your process definition and metrics will evolve as you learn more about your organization’s capabilities and systems limitations. In short, defining the demand management process is no different from defining any other ITIL process. Documenting demand management by putting the process to paper will help cement understanding of everyone involved. In fact, it will probably be the most important first step; as so many stakeholders will have widely divergent views of demand management.

The next step is to produce a holistic view of work intake and the resources available for fulfilling these requests. This is lot harder than it sounds. Start by understanding the load placed on your organization by projects and service requests. Leverage the project office, portfolio/program management and time accounting systems to get a handle on project demand, keeping in mind some tweaking of those systems may be required to produce a services centric view of the organization’s work.

The Metrics

The importance of accurate and useful time accounting data cannot be overestimated. Staffing costs are usually the biggest portion of an IT organization budget so it’s essential you can categorize, classify and account for effort expended in working on projects, fulfilling service requests and “keeping the lights on” production support activities.

Careful planning and alignment with your organization’s service model and service catalog will allow you to understand where your organization is spending time and is a critical prerequisite to projecting resource needs across the planning horizon. Only after you can fully characterize your workload should you engage your customers to collectively develop prioritization approaches.

Business activities drive demand for IT services. Your demand management process should include workflow and define approvals required to handle variances or unplanned needs. Business relationship managers should be intimately involved in the demand management process as their knowledge of customer strategic plans will factor into future resource needs. Plus, the relationships manages will leverage the measures and metrics that results from demand management to publicize service delivery performance or look for improvement opportunities

Assign a senior leader as process owner for demand management. This person should be well respected with a wide variety skills in the areas of project and portfolio management, service request fulfillment, procurement, resource management and service economics with excellent customer service, negotiation and facilitation skills.

Integrate demand management process into your company’s governance structures by creating a new entity, such as a Demand Management Council, consisting of senior IT and business decision makers and chaired by the process owner.

Tackling demand management is not a trivial understanding. Prerequisites include a defined service delivery model and a services oriented mindset, a mature service catalog, and good project/financial management disciplines with attendant systems support. Start small with demand management then build on success over time. Soon your IT organization will find itself influencing customer demand by incentivizing services, dynamically adjusting schedules and allocation of resources in response to changing business needs, all the while enhancing the overall efficiency and effectiveness of its operations.