Dealing with supply and demand is a critical point for any company. In this sense, two processes are vital: Demand Management and Capacity Management.
Both help any company achieve financial balance, without sacrificing quality service that positively impacts the customer.
In fact, both processes have specific sections in ISO/IEC 20000, given the value of each.
That is why these two processes are often confused, as they deal with service demand. However, the way Demand Management and Capacity Management handle demand has some differences.
In summary, we can define the function of each as follows: Demand Management comprises the current and future demand of the customer for services, while Capacity Management plans and provides sufficient capacity to meet demand.
I will explain each one of them calmly and explain why both work so closely together.
Demand Management
In the context of Service Management, Demand Management determines the current demand and predicts the future demand for a particular service.
In addition, Demand Management monitors and reports on both demand and service consumption, to measure more accurately how sought-after a certain service is.
That is why this process works closely with Capacity Management; it is Capacity Management that will provide what is necessary to meet the demands.
As an example, we can think that it is Demand Management that will define how capital can be distributed. Then, this process seeks to optimize resources and allow the company to improve service delivery.
Therefore, Demand Management observes how the customer behaves and can formulate strategies thinking about business opportunities.
Understanding demand helps IT, as often this demand can be minimized with tasks that act on the root cause or in service design.
Capacity Management
If in Demand Management, it is necessary to observe the demand for a certain service and define what will be done from that, Capacity Management will deal with the capacity of the resources that support the services. So, it checks whether it is sufficient to meet the service requirements at any time.
Then, Capacity Management measures and adjusts this capacity when necessary.
And attention! When I say capacity, I am not referring only to technical capacity (such as the company’s internet).
I am also talking about human resources, for example: the number of people who are part of a Service Desk; financial: for example, the budget required to update computers; and information capacity: for example, the capacity of the database behind a ticketing system.
Referring to ISO/IEC 20000, it clarifies the activities of this process. According to the norm, Capacity Management plans capacity to include:
- Current and predicted capacity based on demand for services;
- Expected impact on capacity of agreed service level targets, availability and service continuity requirements;
- Schedules and limits for changes in service capacity.
So, in other words, the company needs to provide sufficient capacity to meet agreed capacity and performance requirements.
Working together
Explained the two processes, it is clear how there are some differences between them.
However, this difference does not change what was mentioned at the beginning of this article! Demand Management and Capacity Management work together. Thus, demands for a certain service are met!
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