Capacity Management

Demand Management
The objective of Demand Management is to optimise and rationalise the use of IT resources. Although Demand Management should be a part of the routine activities of Capacity Management, it takes on special importance when the IT infrastructure is suffering from capacity problems. The problems Demand Management has to solve in the short term include those arising from:

Degradation of service due to unexpected increases in demand. Partial interruptions to service due to hardware or software faults.

In these cases, Demand Management is responsible for redistributing capacity in order to ensure that critical services are not affected, or at least to minimise the impact on them. To perform this task efficiently it is essential that Capacity Management be aware of the customer's business priorities and be able to act accordingly. However, Demand Management over the medium to long term is no less important a task. An increase in capacity always entails costs, and often these are unnecessary. Monitoring capacity properly makes it possible to identify weak points or bottlenecks in the IT infrastructure and assess whether it is possible to redistribute the workload over the long term in order to offer a high quality service without increasing capacity. For example, an inappropriate distribution of tasks may mean that the broadband capacity the organisation has contracted is inadequate at peak times because thousands of e-mails are being sent by automatic processes, such as promotional marketing campaigns, customer performance reports, etc. In most cases these processes could be rescheduled away from peak times without degrading quality of service, thus saving the organisation the expense of increasing bandwidth. However, if the cost of increasing bandwidth is slight, it may be more efficient to do so than investing the precious (and costly) time of highly qualified specialist personnel in the task of optimising the system. Based on past experience and market trends, Capacity Management should assess when the "bigger and more powerful" solution is more cost effective (bearing in mind the indirect costs) than a detailed analysis of the situation.

Capacity management
Capacity Management is a process used to manage information technology (IT). Its primary goal is to ensure that IT capacity meets current and future business requirements in a cost-effective manner. One [1] common interpretation of Capacity Management is described in the ITIL framework. ITIL version 3 views capacity management as comprising three sub-processes: business capacity management, service capacity management, and component capacity management (known as resource capacity management in ITIL version 2). As the usage of IT Services change and functionality evolves, the amount of processing power, memory etc also changes. If it is possible to understand the demands being made currently, and how they will change over time, this approach proposes that planning for IT Service growth becomes easier and less reactive. If there are spikes in, for example, processing power at a particular time of the day, it proposes analyzing what is happening at that time and make changes to maximize the existing infrastructure, for example, tune the application, or move a batch cycle to a quieter period.

These activities are intended to optimize performance and efficiency, and to plan for and justify financial investments. Capacity management is concerned with: Monitoring the performance and throughput or load on a server, server farm, or property Performance analysis of measurement data, including analysis of the impact of new releases on capacity Performance tuning of activities to ensure the most efficient use of existing infrastructure Understanding the demands on the Service and future plans for workload growth (or shrinkage) Influences on demand for computing resources Capacity planning developing a plan for the Service

Capacity management interacts with the discipline of Performance Engineering, both during the requirements and design activities of building a system, and when using performance monitoring as an input for managing capacity of deployed systems.

Demand management in economics

In economics, demand management is the art or science of controlling economic demand to avoid a recession. In natural resources management and environmental policy more generally, it refers to policies to control consumer demand for environmentally sensitive or harmful goods such as water and energy. Within manufacturing firms the term is used to describe the activities of demand forecasting, planning, and order fulfillment. In economics the term is also used to refer to management of the distribution of, and access to goods and services on the basis of needs. An example is social security and welfare services. Rather than increasing budgets for these things, governments may develop policies that allocate existing resources according to a hierarchy of needs. It is inspired by Keynesian macroeconomics, though today elements of it are part of the economic mainstream. The underlying idea is for the government to use tools like interest rates, taxation, and public expenditure to change key economic decisions like consumption, investment, the balance of trade, and public sector borrowing resulting in an 'evening out' of the business cycle. Demand management was widely adopted in the 1950s to 1970s, and was for a time successful. However, it is widely regarded as a force behind the stagflation of the 1970s, though the supply shock caused by the 1973 oil crisis could have also caused that.

Theoretical criticisms of demand management are that it relies on a long-run Phillips Curve for which there is no evidence, and that it produces dynamic inconsistency and can therefore be non-credible. Today, most governments relatively limit interventions in demand management to tackling short-term crises, and rely on policies like independent central banks and fiscal policy rules to prevent long-run economic disruption. In the environmental context demand management is increasingly taken seriously to reduce the economy's throughput of scarce resources for which market pricing does not reflect true costs. Examples include metering of municipal water, and carbon taxes on gasoline. [edit]Demand

management in business

In business, the term is used to describe the proactive management of work initiatives (demand) with business constraints (supply).