Monday, 18 November 2013

Demand Management – Like Walking a Tightrope


When I was a kid I could hardly wait for the Christmas catalog loaded with all the newest toys to arrive at my house. I would carefully go through it front to back and all the things that I wanted would get a check mark beside it. Then reality would set in, which of these things am I really going to get? While I was generally well behaved (at least I thought so) my parents were not going to get all this stuff. Effectively this made my parents Demand Management. By comparison this meant that as the kid my role was like that of the business.

The business may also have fluctuating needs with regards to a particular service, so one might suggest that we build for the worst case scenario and then we should be good the rest of the time. to put this in perspective, if you had to transport 10 kids in once a year in a maxi-van for a hockey tournament would you buy one for everyday use? It probably wouldn’t be cost effective. You can always build more to do more, but this approach may also not be cost effective and it will not likely add value. To do that Demand will need to determine what services need to be consumed currently and in the future for varying scenarios.

How do I do this you might ask, the answer – understand your business. You need to know what they "do" as well as the “stuff” that they need to use to meet their objectives. You are also going to have to address potential scalability challenges in the future if the requirements for the services change. The challenge here is having the information available to estimate what the business needs. The risk is that if you overestimate you may satisfy the business service needs but the overall costs associated in doing so. The other challenge is keeping infrastructure costs down but not having the capacity for your business needs.

It really can be like walking a tightrope.

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