In General, what is Demand and Demand Management? Demand represents the need or desire for products and services from internal and external customers. In economics, demand is the quantity of a goods that you as consumers are willing and able to purchase at various prices during a given period.
Demand Management is a planning methodology used to forecast, plan for, and manage the demand for products and services. This can be at macro-levels as in economics and at micro-levels within individual organizations.
Demand Management has a defined set of processes, capabilities and recommended behaviors for companies that produce goods and services.
1. IT Demand Management Framework in IT Service Management (ITIL)
What is Demand Management in ITIL? Demand Management is a critical aspect of Service Management. Poorly managed demands are a source of risk for service providers because of uncertainty in demand. Excess capacity generates cost without creating value that provides a basis for cost recovery. Customers are reluctant to pay for idle capacity unless it has value for them.
ITIL Demand Management Process aims to understand, influence, and anticipate customer demand for IT Services. This process works with Capacity Management considering Resource Plans, Cost Plans and Benefit Plans to ensure that the service provider has enough capacity to meet the required demand for products or services. Business Case, Architecture Assessment, Valuation, and Financials are the most essential elements to manage the demand in IT.
In ITIL 4, Demand is the starting point for the Service Value Chain. The service value chain describes six activities that work together to take incoming demand and create corresponding value by creating and managing the products and services which enable the service provider to co-create value with the service consumers. Follow the ITIL Demand Management Strategies and Techniques to manage the Business Demands effectively and efficiently. ServiceNow have one of the best ITIL based Demand Management Tools in the market working from last couple of years.
2. What are the IT Challenges to manage Business Requirements?
IT Leaders need to manage and forecast the demand for products and services, ensuring that they are making informed investment decisions driven by key corporate initiatives. But strategic requests for new services, or enhancements to existing services come from a multitude of sources and are delivered via many channels.
This makes it difficult to track, manage and forecast the demand for products and services all in one place. Consequently, many requests fall into a black hole and do not get properly addressed. These results are a communication gap between the business and IT and limits Its ability to make informed strategic project decisions.
Demand intake is often disconnected from delivery applications, resulting in a lack of traceability between the initial request, project execution, transition to production, and ongoing operations. To make matters worse, it is almost impossible to get a complete view across all portfolios – making it extremely difficult to make, monitor, and validate future investment decisions.
3. What is Demand Management in Project Management?
Demand Management is the allocation of capital, infrastructure, human, and other available resources to initiatives that will create the most value for the organization. Demand Management attempts to find balance in the project management triangle of scope, schedule and budget. If we see the difference between Project and Demand, Demand is the starting point of any Project. After Demand Approval and Completion, we decide to manage as Project, Change, Defect or Enhancement.
4. Purpose of IT Demand Management in Information Technology (IT-ITIL)
The purpose or objective of Demand Management is how to align with Business Requirements to manage the Demand workflow, Detect, Influence and engaging with stakeholders, prioritizing demands, and the decision workflow that customers have on IT Services.
5. Basics of Demand Management Process
- To identify and analyze the patterns of business activity (PBA) in order to understand the levels of demand which will be placed on Service.
- Analyze the current customers usage on IT Services and collect the data from Incidents, Requests, Problems, and so on.
- Anticipating future customer demands for IT Services in contact with Business Value Area Manager (BVA) or Business Relationship Manger (BPM) while interactions with Business Leaders.
- Set up the application: Plan, Analyze and create stakeholders and assessment categories, and create bubble charts.
- Assess Ideas: Review and analyze submitted ideas created by Business before promoting ideas to demands.
- Create and manage demands: Create, enhance by adding stakeholders and assessments, and evaluate and qualify demands.
- Use the Demand Management Application or the demand workbench solutions to compare and assess the demands.
6. Demand Management Procedure
- Align IT Strategy with Business Strategy and goals for long term planning.
- Manage Project Portfolio, including prioritization and sequencing of projects.
- Delegate Authority to teams.
- Achieve and measure the results
- Re-evaluate and re-prioritize ongoing initiatives as strategic drivers change (do so based on a mutually agreed-upon process and following a set of consistent criteria)
7. Demand Management Model for Business
IT Demand Management primarily used to detect and influence the demand that customers have on IT services. The Demand Management process flow consists of the following tasks:
- Idea Submission: A user specially Process Owner, Process Manager, Head of the Departments, Executive Teams (CXOs) and Key Business Users should submit the Idea for their requirements like Innovation, Business Process Change, Business and IT Applications, IT Infrastructure and any other generally depend business to business.
- In Submitted State of Idea, Submitters, collaborators, can edit the idea to add more information.
- Idea always reviewed by the teams following the Portfolio assigned to and Portfolio Manager to accept or reject the idea.
- Creating Demands: Demand managers and demand users can create demands using the Demand Management application.
- Requesters or collaborators can edit their demands as long as the demand is in the Draft state
- Enhancing Demands: Demand Managers can enhance the demands by adding stakeholders, requirements, risks, decisions, or resource plans.
- Assessing Demands: Decision makers can use assessment results and the demand backlog when determining which demands to approve or reject. Demand managers can decide if the assessment should be triggered for the demand using the Assessment Required field on the demand form.
- Completing Demand: Demand managers can set a demand to Completed when work on the demand is complete. You can cancel the future resource plans and complete the allocated resource plans for a Completed or Deferred demand.
7.1 IT Demand Management Process Flow Chart
7.2 Life cycle for IT Demand Management
Demand Management lifecycle is described below is following the ITIL IT Strategy framework. How Idea can be derived to solutions.
Approved Demands can be used for following Artifacts to provide the final solution to business:
Demand Types can be Specific (Portfolio Specific where not changes to Business Architecture), Major (Cross Portfolio where Major impact on Business Architecture) or Large (Strategic where Major impact on Business Architectures and belong to long term Business Strategies) to categories to understand easily.
Demand Management Ratings can be derived following the Business Case, Benefit Plans, Assessment Data, Cost Plan, and Architecture Assessments considering the Business and Technical Assessments. Financial Risks and Business Value to be taken care when deciding the ratings or Demands.
Demand Management in Lifecycle can be simplified as following:
- Creating a Demand: Idea can be submitted and after approval the idea, Demand Manager or authorized person can create demand.
- Viewing a list of Demands: Demand Manager can view the demands to analyze further.
- Enhancing a Demand: Demand Manager can do the screening of the demand and send the assessments to stakeholders
Assessing a Demand:
- The demand manager can screen the demand and send surveys to stakeholders to complete assessments.
- The demand manager can set the state of the demand to qualify, defer, or incomplete.
- Demands can be analyzed and approved using the demand workbench in applications.
- Creating an artifact: The demand manager creates a project, enhancement, change, or defect from the Demand.
- Draft: The Demand Manager accept a submitted Idea and review the demand in draft state. In this stage, after reviewing, Demands can be submitted, updated, or deleted.
- Submitted: An accepted idea creates a demand record and the demand manager submits the demand. In this stage, after reviewing, Demands can be updated, screening, qualify, defer, Incomplete or deleted.
- Screening: The demand initiates assessments for the demand. After reviewing, demands can be updated, qualify, defer, and deleted.
- Qualified: The demand has been qualified and is ready for review. After reviewing, Demands can be updated, deferred, or deleted.
- Deferred: The demand has been put on hold. The demand can be revisited in future and reviewed. After reviewing, Demand can be updated, approved, Reset to Draft, or deleted.
- Approved: The demand is approved and after reviewing, Demands can be updated, closed, or deleted.
- Completed: After reviewing, finally the demand is moved to the completed stage.
7.3 Demand Management Metrics / KPIs
Following the IT Demand Management process, these are the following KPIs to start with but not limited to.
- Size of the demands: Assessments of the demand based on the size and relative to other demands like T-Shirt size Small, Large, Extra Large creating the Demand Size Matric / KPI.
- Strategic Alignment: Assesses how closely the demand aligns with strategic goals of the organization compared to other demands following the ratings of the demands based on Financial Risks and Business Value Assessments creating the Strategic Alignment Matric / KPI.
- Risks: Assess the Risk of the demands compare to other demands creating the Risks Matric / KPI.
- Return on Investments (ROI): Assess the demand on return of the investments compare to other demands creating the ROI Matric / KPI.
- Cost: Assess the demand on the cost compare the other demands creating the Matric / KPI.
- Cycle Time: This KPI can be used to understand for each stage how much time we are taking to process the demands. We can define the rules here and measure the cycle time Matric / KPI.
7.4 Role of the Demand Manager and other stakeholders in Demand Management Process
The Demand Manager performs the day-to-day overall management of the Demand Process. This role ensures that all process activities are being performed and that they are staffed adequately to the responsible teams.
The role of the other stakeholders in Demand Management Process can follow the major influence like who belong to which Portfolio, what is the level of interest, Assessment Recipient, Approving Authority, Influence to demand, Engagement Level for the demand and function of the stakeholders. These are the separate roles are important in ITIL based IT Demand Management Process.
- Business Process Owner (BPO)
In global organizations, global responsibility for all business processes in the respective business capability. The BPOs are defined in the process house and these are the members of the global management board of your organizations. The execution of process changes can be delegated to a business process manager accordingly to the organizations structure specially in matrix organizations.
- Business Value Area Manager (BVA) / Business Relationship Manager (BRM)
Business Value Area Manager (BVA) represent the business capabilities in the IT organization. They manage the overview all applications for the corresponding business areas together with the BPO/BPM.
The BVA ensures the quality of the demand for the approval process. The BVA can approve all demands for project size Small (S) and Medium (M).
In case of IT managed solutions, they are the responsible contact for all topics in Design (PLAN) and Transition (BUILD) and as an escalation instance during Operations (RUN).
- Enterprise Architecture
Enterprise Architecture role is responsible to see the overall strategy of the solutions. The Enterprise Architect can check the ‘Strategic Fit’ for all demands of project size Large (L) and Extra Large (XL). He is part of any investigation project. He will carry out the system approval for project sizes Large (L) and Extra Large (XL) after the decision by the approval authorities.
- Business Process Manager (BPM) / Local Process Manager (LPM)
In global organizations, global Business Process Manager (BPM) are responsible for the management of ideas, demands and projects in their areas. They decide on latest ideas and the alignment of all demands. Local initiatives can be delegated to Local Process Manager (LPM). The BPM/LPM is responsible for the demand in the status DRAFT and SUBMITTED and will change the status the QUALIFIED after alignment with the Business Value Area Manager (BVA) end of SCREENING stage of the demand.
All demands whether they belong to business or IT managed Applications, global or local must follow the demand process. The Business Process Manager (BPM) works closely together with the corresponding Business Value Area Manager (BVA) of the IT.
- Regional / Country Manager
In global organizations, Like the Business Value Area Manager (BVA), the IT Hub / Regional Manager is the responsible contact person for the regional and local management. All local demands will be in the responsibility of the HUB or Region.
The HUB or Region ensures the quality of the demand for the approval process. The HUB can approve all local demands for project size Small (S) and Medium (M).
In case of IT managed local solutions, they are the responsible contact for all topics in Design (PLAN) and Transition (BUILD) and as an escalation instance during IT Operations (RUN).
7.5 What are the key terms in IT Demand Management?
Important terms in Demand Management are listed below:
- Portfolio: A collection of demands managed as a group to achieve strategic and operational objectives.
- Assessable Records: A record that links the record you want to evaluate. For example, the company record for Amazon or the user record for a sales representative, to a metric type, such as demand.
- Metric and type of Metric: To evaluate the assessable records, a trait or value used called Metric. Examples of metric included perceived, value of demands, and return on investment for a demand. Matric types to define a set of records you want to evaluate.
- Matric Category: A theme for evaluating assessable records. Categories contain one or more individual metrics, which define specific traits or values that comprise the theme. Examples of categories include return on investment and cost.
- Stakeholder: A person affected by the demand or who has interest in the demand.
- Scorecard: A visual breakdown on performance of an assessable record based on assessment results. Use scorecards to view various data summaries for one assessable record and to compare the ratings with other assessable records.
- Requirements: An extra item that must be present or an extra action item that must be finished before a demand request closes.
7.6 Demand Management Planning Items?
- Role: Determine who has the Demand Manager and Demand User roles.
- Portfolios: Determine how you would like to have groups or categorization of the demands and then have a user with the Project Manager role create portfolios following these groupings.
- Stakeholders: Identify individuals who have the appropriate domain knowledge to evaluate demands related to each portfolio. Then make them stakeholders for that portfolio.
- Assessments: Consider using assessments to facilitate the information gathering process. Define metric categories and assessment metrics to develop and distribute assessments to the appropriate audience.
- Bubble Chart Definitions: Identify metrics that are important to stakeholders, departments, and the organization. Use these metrics to create bubble charts that visually compare demands. For example, when considering which projects to undertake many organizations compare metrics such as risk rating, return on investment, and cost and so on.
- Resource Plan: Resource and Demand Management consider developing resource plans to help the organization understand the time and resource costs associated with the demand and Capacity Management. Any resource plans attached to the demand propagate to the project. Resource plans require that the Resource Management application be also active with IT Demand Management Applications.
- Enhancement and Defect Request: Determine if you need the ability to manage enhancement and defect requests as demands. This functionality requires that the Agile Development application be also active with Demand Management Applications.
8. How the Idea and Demand Management process can help to Business?
Becoming more efficient by improving processes or using new IT systems often starts with just an idea. To channel and evaluate ideas and demands within your organization, we can implement a new Idea and Demand Management process in Demand Management applications like ServiceNow, JIRA and so on.
New idea and demand management process helps to business to streamline ideas, evaluate the benefits for the organizations. Furthermore, it allows to you to find a reliable, secure, and integrated solutions at the best cost and quality. The Idea and Demand process is available via ITIL bases IT platforms like ServiceNow to design for improving existing processes and IT systems as well as introducing new applications.
Nominated users of the business or IT employees can submit ideas, but if you have an innovative idea, discuss it with your managers – if it adds value, they can submit it. After the submission, a business responsible reviews the proposal and analyses the benefits for the organizations. If the decision is made to proceed, the IT looks for a potential solution and determines the time needed to implement the idea, the costs and much more. The result of this analysis is the basis for a later project approval to provide the final solution.
With the new idea and demand management process we can use a standardized process ensuring that all ideas, demands, and projects are evaluated in a structured way. This enables to you to make use of the best ideas to generate value for the organizations at the best cost and quality.
Helping to follow IT Service Management (ITSM-ITIL) Ideas and Demand Management process to have a standardize process ensuring that all ideas, demands, and projects are evaluated in structured way. Enabling to you make use of the best ideas to generate value at the best cost and quality for the organization.
Ideas are the desires from the key users or stakeholders. Business Process Manager (BPM) and Business Value Area Manager (BVA) analyze the Idea and Demands to create an Offer to Business and if Offer accepted then follow the Project Order to implement and manage the operations.
9. ServiceNow and ITIL Demand Management?
ServiceNow offers ITIL based IT Service Management (ITSM) Applications in their Portfolio. Demand Management Process is also part of their IT Business Management Module. This article is influenced by ServiceNow Demand Management process also following my last 10+ years of experience with ServiceNow.
The Demand Management application consists of tools for capturing, centralizing, and assessing strategic and operational demands. It also provides an individual location for managing all the demand information.
The ideation module, integrated with Demand Management, provides an effortless way for users to submit ideas and for demand managers to assess before promoting them to demands. Ideation also helps track the progress of an idea as it moves through the demand life cycle (idea to a demand, to a project, enhancement, change, or defect).
The demand workbench provides a central location for viewing and analyzing business demands. Demand users can access an interactive bubble chart as well as demand record information within the workbench to collaborate on-demand assessment.
Demand managers can approve demands and create projects and enhancements
10. How ITIL Demand Management can support to DevOps?
IT Demand Management is an interesting process and not something all that common in most service-based organizations. The process gathers inputs from various sources to feel the pulse for the upcoming demand for services.
For example, if the your customer plans to add a couple hundred more users to the lot, the service provider must be aware of this ramp-up to ensure that the services such as Internet bandwidths, storage allocations, account creations, and so on, are scaled by the time the ramp-up is done.
So, how is it relevant to a DevOps project? Consider this: as part of the build activities, or even before the build can start, several prerequisites need to be in place. How will these demands be addressed without a mechanism that is in alignment with the DevOps ways of working?
I know that in most organizations, getting the right kind of people, tools, and especially environments on time is a major challenge. Most of the resources sought are showstoppers, and they make or break organizations. So, how can we align the needs of the project with the demand management process?
The ITIL demand management identifies demand for services through pre-empting and identifying patterns to better serve customers through uninterrupted and optimized service delivery.
In a DevOps project, my recommendation is to extrapolate the reach of the demand management process to investigate all the demands of a DevOps project. Be it in the human resource area or tools or anything else that is needed to run the project, demand management steps in.
When we plan the road map for a DevOps-styled implementation, we do certain due diligence to identify what type of people we need, environment setup, tools, work locations, and other work enablers. The demand management process in this setup must be as lean as possible to ensure that provisions are made for speedy deliveries.
Today some of the environment and tool setups are managed on the cloud, and the developers and DevOps engineers can themselves spin environments along with the required toolset at the snap of a finger. However, there are some organizations that are skeptical, and the provisioning of environments is still done in the traditional ways. So, if we are to be going to work in a DevOps project, the demand process must make commitments to use the full extent of technology to remove the blockers that may exist. When it comes to people and work locations, it is a different matter altogether.
Companies do not maintain a massive bench strength anymore, and brick-and-mortar offices come at a premium. So, there is even more onus on the demand process to ensure that the people sourcing, and other enabling processes are optimized and focused on speed and quality.
Most of the demands get sorted out during the road-map planning. No matter how detailed the plan is, calculations go awry. During the build process, there might be new requirements that need to be sourced. Therefore, there should be a constant alignment between the sprint planning process and demand management to get new demands (if any) every two weeks and fulfill them in a decent amount of time. It should work both ways.
The sprint planning sessions must identify what is needed in the next sprint or a couple of sprints from now, and a governance structure should ensure that the demand management process has open ears to pick up on the demand. A tool such as Slack or Trello will serve nicely in putting up the demands on a regular basis and follow it up with a meeting for clarifications