Demand management, the ITIL Service Strategy counterpoint to capacity management, explains a big part of why we’re all busy in August. This presentation will highlight the costs of ineffective demand management, connect ITIL demand management to the Lean manufacturing’s concept of “mura,” and then show techniques for how to understand and communicate demand to IT staff, how to plan for demand, and how to influence demand in a higher education environment.

1. J O H N B O R W I C K , M A N A G E R A N D F O U N D E R
H I G H E R E D U C A T I O N I T M A N A G E M E N T , L L C
H T T P : / / W W W . H E I T M A N A G E M E N T . C O M / A U G U S T
ITIL Demand
Management:
Why August is a bad time for a
presentation

2. John Borwick, PMP®
 Wake Forest University,
2003-2012
 Director of Service Mgt
 PMO Director
 Manager and Founder,
HEIT Management
Career goal: Make people’s
lives easier by improving
how higher education IT is
managed.
johnb@heitmgt.com

3. Higher Education IT Management, LLC
“Helping Higher Education IT effectively
deliver value to campus while minimizing
waste.”
 One-on-one coaching
 Custom engagements
 Blog
http://www.heitmanagement.com

4. Agenda
 Concepts in Demand Management
 The Costs of Ineffective Demand Management
 Understanding and Communicating Demand
 Planning for Demand
 Influencing Demand
 So why is August such a bad time for a presentation?

5. W H A T I S I T I L ’ S D E M A N D M A N A G E M E N T ?
W H A T ’ S L E A N A N D W H A T ’ S “ W A S T E ” ?
Concepts in Demand
Management

6. Demand Management Capacity Management
 Service Strategy
process
 Does this service make
sense?
 Service Design process
 How are we going to do
it?
ITIL’s
Demand Management vs. Capacity Management

7. Capacity is a stair-step function,
not a linear function
$
Capacity
1 PB 2 PB 3 PB

8. Capacity is a stair-step function,
not a linear function
$
Capacity
1 PB 2 PB 3 PB

9. Types of Demand Management
 “Absolute” demand vs. “Temporal” demand
(Patterns of Business Activity)
 Understanding demand vs. influencing demand

10. “Absolute” Demand
 What do users VALUE?

11. Capturing Value
$
Cost of
the
service

12. Sample IT costs
 Server room equipment
 Servers and storage
 Software licenses
 Cloud services
 … and us (the IT staff).

13. Capturing Value
$
Cost of
the
service

14. Capturing Value
Value
of the
service
$

15. Capturing Value
Value
of the
service
“Captured
Value”
$
Cost of
the
service

16. Yay! Virtuous cycle!
1. IT
designs
new
service
2. Value
exceeds
cost
3. Happy
campus
4.
Increased
IT
funding

17. —or, a vicious cycle.
1. IT
designs
new
service
2. Cost
exceeds
value
3.
Unhappy
campus
4.
Reduced
IT
funding

18. Virtuous Cycle Vicious Cycle
(Perceived Value > Cost)
 Google Apps ?
(Perceived Value < Cost)
 Anti-Virus ?
Value vs. Cost

19. Perceived value changes over time
 What people value today
 What they may be influenced to value

20. Patterns of Business Activity
 Students arrive in late August/early September
 Admissions is busy November-March
 The budget season is February-April
 Students don’t use the LMS 3 AM-7 AM
 Timesheets are submitted 3PM-5:30 PM Fridays

21. Lean’s Three Types of Waste

22. Lean’s Three Types of Waste
 Muda, or in-process waste: the traditional target of
“process improvement,” e.g. having 5 steps in your
process when only 2 are needed

23. Lean’s Three Types of Waste
 Muda, or in-process waste: the traditional target of
“process improvement,” e.g. having 5 steps in your
process when only 2 are needed
 Muri, or overburden: waste due to trying to do too
much at once

24. Lean’s Three Types of Waste
 Muda, or in-process waste: the traditional target of
“process improvement,” e.g. having 5 steps in your
process when only 2 are needed
 Muri, or overburden: waste due to trying to do too
much at once
 Mura, or unevenness: waste due to
fluctuations in demand

25. Building for peak demand
Capacity
Spring Summer Fall Winter
Demand

26. Building for peak demand
Capacity
Spring Summer Fall Winter
Demand
Capacity

27. “Stair step” effects can make small increases in
demand be magnified
 Extra 10 students admitted
 One course section added
 Five more GB of disk space needed for the section
 One additional disk drive needed
 One additional rack of drives needed
 One additional pair of fiber connectors needed
 One more network switch needed
 …

28. W H Y Y O U S H O U L D C A R E A B O U T
D E M A N D M A N A G E M E N T
The Costs of Ineffective
Demand Management

29. 1. No demand for a service
http://www.flickr.com/photos/92435716@N00/54069752/

30. 2. Too much demand for a service
(Unexpected demand)
http://www.flickr.com/photos/81203773@N00/2658548130/

31. 3. Can’t handle peak demand
http://www.flickr.com/photos/13742951@N00/1332071197/

32. Understanding and
Communicating Demand

33. Talk with customers
 Who talks with your IT customers?
 Patterns of Business Activity are much easier to
uncover than perceived value
 Undirected conversations
 You know the possibilities; they know the value
 e.g. listserv digests

34. ..and talk to your customers’ customers.
 The final customers, e.g.
IT supports Financial Aid
Financial Aid supports the students
 Most people overestimate demand
 Focus groups
 Similar services
 Usability studies
“Go to the Gemba” = Go to the real place

35. Iterative releases/roll-outs
(think “Test markets”)
 One administrative department
 One academic department
 One course
 One residence hall
 One class of students (e.g. seniors)

36. Clarify demand expectations with service levels
 “This service is designed to accommodate 200
simultaneous users. If more users attempt to access
the service, they will be put in a waiting queue and
given a time estimate before they can access the
service.”

37. Share a campus events calendar with IT staff
 Ideally, pull from existing sources
 Identify the “peak days”

38. Build a chart of busy months by department
 List campus departments
 Review with them their busy months
 Share this chart with IT
 Identify the “peak months”

39. Planning for Demand

40. Selected portions of a project
 Approval: Deciding whether to pursue a project
 Scope Definition: Understanding high-level scope
 Project Planning: High-level decisions about how
the service should work
 Project Execution: Implementing the project
Approval Scope
Definition
Project
Planning
Project
Execution

41. Selected portions of a project
Approval Scope
Definition
Project
Planning
Project
Execution
Service Strategy Service Design Service Transition

42. Should we even offer this service?
 Will there be demand?
 Are we capable of satisfying the demand?
Approval Scope
Definition
Project
Planning
Project
Execution

43. Include demand management in the project
scope
 Project responsible for identifying potential demand
 Project won’t close until capacity satisfies demand
Approval Scope
Definition
Project
Planning
Project
Execution

44. What types of demand will there be?
 WordPress “Multisite” functionality vs. WordPress
instances
 Demand for training
 Demand reduced for another service
Approval Scope
Definition
Project
Planning
Project
Execution

45. In design, identify bottlenecks
 Design assumes one database server
 Design assumes one application server
 Design assumes one IT staff member approves
requests
Approval Scope
Definition
Project
Planning
Project
Execution

46. Test demand
 Iterative releases
 Capacity vs. demand
Approval Scope
Definition
Project
Planning
Project
Execution

47. A B S O L U T E D E M A N D
Influencing Demand

48. Marketing
“How many problems of life can be solved
actually by tinkering with perception, rather
than that tedious, hardworking and messy
business of actually trying to change reality?”
—Rory Sutherland, “Life lessons from an ad man” TED Talk

49. Marketing
e.g.
 Getting people’s attention
 Knowing your target market
 Creating desire
 Framing your offer

50. Shifting demand: Empower users
 Users build reports vs. IT builds reports
 A tool resets passwords vs. IT staff reset passwords

51. Service Levels
 Speed of the service
 Hours of operation
 Capacity

52. Chargeback
 Charge back only when it can influence demand.

53. P A T T E R N S O F B U S I N E S S A C T I V I T Y
Influencing Demand

54. Differential Charging
 Overtime rates
 Express shipping

55. “High demand” service levels
 Service will take longer to provide during peak
months or peak hours

56. Release windows
Code will be released into production on…
 Tues August 13 (“Release 1”)
 Tues August 27 (“Release 2”)
 Tues September 10 (“Release 3”)
…and Release 2 is almost full.

57. Business process improvement
 Identify the reasons for the peaks and valleys
 Work with upstream customers to change their
business processes
E.g. canvassing campus departments for capital
requests several weeks before the deadline.

58. W H Y A R E T H E R E S O M A N Y P E A K S I N
D E M A N D I N A U G U S T ?
So why is August such a bad
time for a presentation?

59. Agriculture
http://www.flickr.com/photos/34613366@N00/2398513475/

60. Semesters
 Students learn face-to-face with a professor
 Creates many Patterns of Business Activity getting
ready for the fall
Think: ITIL’s Release Management

61. Opportunity to re-invent campus
http://www.flickr.com/photos/12836528@N00/4878619349/

62. http://www.heitmanagement.com/august