The Benefits of Capacity Management, do they exist, what are they and how do you notice?

UKCMG 2013 – Session C1

The Benefits of Capacity Management, do they exist,

what are they and how do you notice?

Neil McMenemy, Principal Consultant Capacitas

The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Agenda

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

About Capacitas

Established
Specialist Our staff are
Founded relationship
capacity and experts in All staff are
2002 – 11 Head office in 20 full-time with a
performance capacity and ITIL
years in London, UK consultants number of
management performance accredited
operation European
consultancy management
Universities

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Why do organisations carry out Capacity

Management?

Is it because ITIL
tells them they
should be doing
it?

Are they afraid

that if they don’t
do it then
something bad
might happen?

Is it because they
benefit from it?

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

ITIL – Benefits Claimed

Reduced
Risks for
existing
services

Reduced
Reduced
capacity-
Risks for
related
new services
expenditure

Greater Reduced
efficiency costs

More rapid
Reduced
response to
business
customer
disruption
requests

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Something bad might happen

Internal Remediation - This is

positive if there is no
Remediation - Should be
considered embarrassing if
there is a party responsible,

audit
organisational responsibility i.e. why should the auditor
for Capacity Management know more than the
Capacity Manager

External If this is a regulator then

If done by an independent
party then remediation can

audit
action must be taken be done before the
regulator takes action

Service Not enough capacity –

resource shortfall, poor
The impact of a change
wasn’t properly forecast –

Incident
performance, often can be possible process or skills
fixed by spending money gap

High Lack of confidence in

process/skills leads to Possible outsourcing threat

costs
overprovisioning

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Cost v Service Balance

Capacity Management strikes a balance between the cost of providing IT
Services and ensuring that there is enough resource to assure performance.

Consolidation

Tuning

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Drivers for Capacity Management

High level of Long lead times

service associated with
demanded by capacity
the business upgrades
Highly
Extraordinary
competitive
business peaks
market

Requirement to
Significant
manage ICT
business growth
costs

Capacity High likelihood

Business-critical
service Management of a merger or
is required acquisition

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Capacity Management Deliverables

Operational
Capacity Capacity and
Capacity Automated Capacity
Management Performance Plan v Actual CMIS
Plans Reports Management
Process Models
Analytics

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Capacity Management Maturity

Tier Tier 5 uses the same methodology as 4 but the capacity plan
5 directly effects the organisation’s strategy rather than merely Capacity Management
supporting cost justification or service improvement supporting and driving
business decisions

Publish capacity Build performance Build resource Map business volume to

plan model model resource consumption Forecasting based on
Tier
business demand
Linear Regression y = 2E-05x + 6.9346
R² = 0.8786
40.00

4
35.00
30.00

planning methodology
25.00
20.00
15.00
10.00
5.00
0.00
0 500,000 1,000,000 1,500,000

Tier 4 is usually deployed for critical services

More Proactive
Resource trending and time series forecasting
Tier 3 involves forecasting Forecasting based on
Tier but has no link to Time Series Analysis and
3 business demands Resource Trending

Alerting Tier 2 is the minimum

Tier Operational Capacity recommended -
Management – Trends deployed across hundreds
2 and Alerts
or thousands of services

More Reactive
Tier Reactive Capacity
1 Management

Tier No Capacity
0 Management
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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

So, what benefits can be realised?

It depends
what you do
and what your
deliverables
are

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Classifying Benefits

Operating at
optimum cost Achieving Value for Where else can
Economy whilst maintaining Money? money be saved?
the required quality

Do we even need
Efficiency “Smarter” working Eliminate waste
this process?

Understand Meet customers' Position to meet

Effectiveness customers' expectations customers' future
expectations consistently needs

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Benefits map to deliverables/services

Capacity
Management Efficiency Effectiveness
Process

Capacity and
Performance Efficiency Effectiveness
Models

Capacity Plans Economy Efficiency Effectiveness

CMIS Economy Efficiency Effectiveness

Automated
Economy Efficiency
Reports

Operational
Capacity
Economy Efficiency
Management
Analytics

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Tell a story

• What is offered to the customer?

Service

• What circumstances are relevant?

Situation

• Why is this offered?

Objective • What does it hope to achieve?

• What benefits will be gained

Benefit • (How will these be measured)

• How will this be delivered

Method

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Example – Capacity Plan

• Capacity Planning
Service

• Need to budget for next period

• Planned business growth
Situation • Need alternatives to hardware acquisition

• Ability to predict costs to prepare for planned changes

• Define the need for one or more projects that will lead to preparation for planned changes
Objective • Understand limitations in the system that may not be due to physical resource capacity

• The organisation understands the business processes that are driving costs
• The organisation understands the cost required over the planning period
Benefit • Development teams are aware of what tuning activities that need to be carried out…

• Create component/service/platform/enterprise capacity plans

• Use models as input to capacity plans
Method • Perform tests/experiments to obtain parameters for model where there is insufficient production data

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Example - Capacity Planning Benefits in more detail

Organisation understands which business
•Economy
processes are driving the capacity upgrades

Organisation understands how much it will need to

•Economy
spend on IT infrastructure

Organisation will have appropriate budget plan for

•Economy
the planning horizon

IT departments know what capacity upgrades are •Economy

required over the planning horizon and can plan
resources, outages etc. accordingly •Effectiveness

Development teams will know what performance •Economy

tuning requirements are needed over the planning
•Effectiveness
horizon to meet the expected IT infrastructure
build and service requirements •Efficiency

Lower probability of IT service issues occurring due •Effectiveness

to capacity or performance root causes •Efficiency

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

How do we know that we achieve the benefits?

Define
KPI’s

Control
Set
through
targets
CSIP

Determine
Compare how to
to targets measure
them

Measure Measure
ongoing the
KPI’s baseline

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1
KPIs should be
established and should
give management
information from the
following points of
view:
The KPIs should feed
into a CSIP which
should be owned by a
single point of contact
KPIs
• Automatically from the process itself
• Customer perception
• Capacity management perception
(self-assessment)
• Comparison to benchmarks
• Targets should be expressed in terms
of KPIs
• Mitigating actions should be defined if
target hasn’t been met
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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Example KPIs (Process Driven)

• Number of key business and service drivers that are monitored and
reported on
• Number of relevant resource utilisation metrics that are monitored and
reported on
• Timeliness of justification and implementation of hardware to meet
business demand
For each • Amount of expenditure on 'last-minute' buying
• Amount of unused capacity
account/service/customer • Problems caused by capacity and performance
• Proportion of time by capacity management staff spent
• Planning and modelling
• Fire-fighting
• Cost of preparing capacity plans (and other deliverables)
• Cost saved by consolidation and decommissioning

In total, the number of

• Business demand driven capacity plans
account/services for which • Feedback of plan v actual data to the business
the following are • Capacity and performance models throughout the R&D lifecycle
produced:

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
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Stakeholder Perception

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UKCMG 2013 – Session C1

Customer Survey

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
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Self Assessment

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
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Audit

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Hidden Benefits
Where business demand driven
capacity models and plans are delivered
• Greater knowledge of IT systems
• Capacity model can be used for training
• More engagement from support teams
• More engagement from business representatives
• Demonstration of control, i.e. credibility
• Access to different parts of the organisation

Other possible benefits

• More work in the pipeline

• Ideal for outsourcers and consultants
• Often annoying for other organisations!
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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

The warning signs of no benefits

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The Benefits of Capacity Management, do they exist, what are they and how do you notice?
UKCMG 2013 – Session C1

Conclusion – The Benefits of Capacity Management

Do they exist?

• Yes, but not for everyone

What are they?

• Efficiency, Economy and Effectiveness

• Possible unexpected benefits

How do you notice?

• You have to…

• Design for them
• Put measures in place to recognise them
• Look for them
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