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Tuesday, March 13, 2012

Introduction to Capacity Management

The Capacity Management process is responsible for all activities related to the provision of adequate and cost-effective capacity. The scope also includes performance management.

Capacity and performance are tightly linked because although service levels are usually expressed in terms of performance (e.g. response time, throughput rate etc.), when resources run short of capacity, performance suffers.

The Capacity Management process is mainly a proactive one because it is driven by future business need. Therefore the earlier that capacity and performance are considered in the Service Lifecycle, the greater the degree of confidence that a service will be able to meet the required service levels when it is transitioned into operation.

The main challenge for Capacity Management is to predict the demand on resources to be able to provide enough capacity to meet service levels on an ongoing basis.

In IT terms, this means gathering information about business plans, assessing the impact on services and underpinning resources and then buying or upgrading resources (or selling or downgrading resources if demand is falling) in time to avoid either insufficient capacity and missed service levels or excess capacity and unnecessary cost. For this reason, the Capacity Management process is sometimes more memorably summarized as ‘Having the right IT capacity in the right place at the right time and at the right cost.’

Without forward planning, achieving this balance is not possible because reacting to capacity shortfalls takes time. It takes time to gain approval to purchase, to physically acquire the capacity and then install and configure it. In the meantime, performance suffers and the business is impacted. Equally, without forward planning, capacity shortfalls may need to be tackled urgently. In such situations, there is a potential for panic buying. It is unlikely that urgent purchases are made in the most cost-effective manner.

A Real Life Example: Let’s take the example of McDonald’s – the place that is frequented by almost everyone. We all go there to pick up burgers, fries, coffee etc. Have you ever wondered how long you are forced to wait during peak hours in the Morning or during lunch hours? The staff in a McDonald’s joint can only serve an ‘n’ number of customers at any given point in time. If the number of customers visiting the joint exceeds their capacity, then the waiting time is going to increase. So, it is the responsibility of the floor manager to ensure that his staff is utilized to their full potential to ensure quick service to customers and to minimize customer waiting time. This is where the Floor Manager’s Capacity Management skills will be put to test.

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