What is capacity management? Resourcing business decisions are crucial to get right for a companys success. They will only increase the number of staff available when a specific demand requires them to do so. Team capacity planning - This type is useful for groups that typically operate or work together. As mentioned, better scheduling is one way to achieve this. In the world of IT operations and service management, capacity might refer to the capacity of servers to handle online traffic for a specific application or service. In project management, the capacity planning process is very important because it's related to critical project management knowledge areas such as: Resource management Time management Team management Work Management Production capacity, strategic planning and project planning obviously go hand-in-hand. Below lists some of the important terminologies of Capacity Management - ITIL V3 Process: Capacity Management Information System: This is a virtual repository of all Capacity Management data, usually stored in multiple physical locations. Evaluating those risks. And, it sounds like its all about physical bits and pieces, not the clouds and containers of todays virtual landscapes. Why is capacity management important? Operations Management Theory: Definition and Modern Examples. Those who engage in a lead strategy for capacity management must, therefore, be ready to respond to instances where the acquired resources are not needed. Arrange the right people and tools. The cloud services require the same degree of capacity management, performance management and capacity planning as on-premises gear, so more holistic capacity management and planning tools have been introduced to adequately address these hybrid environments in the management process. This can be done by using cloud computing or by renting extra capacity from another company. This means using the right mix of human, financial, and physical resources to get the job done efficiently. The cloud services require the same degree of capacity management, performance management and capacity planning as on-premises gear, so more holistic capacity management and planning tools have been introduced to adequately address these hybrid environments in the management process. Another approach to capacity management involves the use of hardware-based monitoring devices. Your capacity for success is largely determined by your understanding of the problem, your knowledge of the possible solutions, and your ability to design to your needs. The real truth is that you need capacity management tools even more when your resources are so fluid and provided on-demand. There are several different capacity management strategies that can be used, depending on the needs of the organization and its tolerance for specific types of risk. 400 hours. Capacity management is the broad term describing a variety of IT monitoring, administration and planning actions that are taken to ensure that a computing infrastructure has adequate resources to handle current data processing requirements as well as the capacity to accommodate future loads. In this case, the IT team must be sure to include enough servers to handle the load placed on the application and also keep sufficient backup systems in place to guarantee the application remains available in the event some servers crash. Managing IT infrastructure has become more complex in recent years and companies have augmented or replaced in-house systems with resources provided by cloud services. You'll need to know how many CPU, memory and storage resources each workload requires -- these are your baseline capacity requirements. In addition to the wired and wireless Ethernet-based network infrastructure that connects servers to storage, end-user devices, networking gear, etc., comprehensive network capacity management must also consider dedicated storage networks based on Fibre Channel technologies; the FC networks are likely to be physically isolated from other data networks and will require different tools for monitoring and management. With proper capacity management, organizations can ensure that they are ready to meet the demands of upcoming projects or customer/stakeholder needs, but without risking the chances of overstaffing or overbooking their talent pool. Furthermore, machinery might break downdue to overuse and employees may suffer stress, fatigue, and diminished morale if pushed too hard. For example, raw material resources may need to be adjusted, depending on demand and the business's current on-hand inventory. An organization running an app will need to forecast demand and purchase server space as well as other resources required in order for the app to run. Capacity might also refer to the machines available to produce goods needed to meet consumer demands. The timeline for adjusting the strategy could be quarterly, monthly, or in some cases even weekly. By noting which particular resources are being stressed, current configurations can be appropriately revised and IT planners can assemble purchasing plans for hardware and software that will help meet future demands. Finding the right level of resources is critical because purchasing excess capacity reduces potential investment in other areas of the organization. Businesses need to be able to meet customer demand. Often, these factors not only become a part of the organization's capacity management best practices but also their strategic planning. In all cases, state-of-the-art IT involves capacity management as an integral part of DevOps practices. Proper capacity management ensures that the server runs on a virtual server instance with enough CPU, memory and storage resources to support the applications, but not so many resources that a significant portion goes unused. All Rights Reserved. It enables CIOs to plan ahead, to respond to business requirements speedily and to manage resources efficiently. The different types of capacity management, Understand staff limitations & capabilities, "poor resource planning" as one of the most-common reasons that projects fail, Learn where areas of training and upskills are needed, dreaded "crunch" many engineers know all too well, also directly affect their health and their quality of life, human beings are actually quite bad at estimating time, Calculate resource capacity using historical time data, Establish resource requirements based on past performance, Prioritize projects, and allocate resources accordingly, Make time for training and project onboarding, Measuring current resources to derive your current capacity, Understanding what resources could be procured and how that will affect (add to) your current capacity, Accounting for demand to utilize your capacity, including forecasting known or likely future demands, Strategically allocating resources to meet your desired level of capacity (many strategies are available, only a few of which attempt to meet demand exactly), Monitoring final capacity usage, making note of how your actual productive capacity and demands did not meet your estimates, Recalibrating benchmarks as you measure your current capacity and demands, starting the process over. Read our eBook: Controlling Cloud Costs with Capacity Management, Learn what it means to extend capacity management to the cloud and how it differs from traditional on-premise capacity management, Environmental, social and governance (ESG), Security Information and Event Management, Diversity, Equity, Inclusion, and Belonging, Environmental, Social, and Governance (ESG), Controlling Cloud Costs with Capacity Management. Meaning, Types, and Benefits, Marginal Analysis in Business and Microeconomics, With Examples, What Is a Learning Curve? One of the most important benefits of capacity management is that reduces the chance of wastage due to overcapacity and redeployment of the resources in other departments so that the business can improve their other services and reduce unreasonable cost. With that data in hand, IT managers and administrators can set baselines for operations to meet a company's processing needs. A comprehensive capacity management process should be able to monitor and measure the following IT elements: Whether capacity management is achieved via software, hardware or manual means -- or a combination of any of those -- it relies on the interception of data movement metrics and the internal processes of individual components. The primary goal is to match supply with demand, within budget constraints, with a secondary goal of avoiding over-extending talent and over-investing time when not needed. Keep a wary eye on how your company is undertaking its capacity management responsibilities to avoid issues like these! When the talent is laid off (or told there's no longer project work for them), then it is very likely that they will not be available for future work should their resources be needed again. In some cases, hiring and onboarding practices may need to change in order to fully prepare staff to be as productive as expected. The business will also encounter opportunity costs, such as innovation projects, that could have been engaged with had they not over-anticipated the need for resources. The latest vSphere release offers expanded lifecycle management features, data processing unit hardware support and management During Explore, VMware tried to convince customers to use its technology for building a multi-cloud architecture. Storage systems that are near capacity will have longer response times, as it takes longer to locate specific data when drives -- hard disk or solid-state -- are full or nearly full. Use hard data from your own teams' time logs to more-accurately calculate your current resource capacity. Use these numbers to create a range of possible productivities, and incorporate this understanding into your capacity estimates. Marginal Benefit vs. An adjustment strategy is one of the most common approaches to capacity management because it responds to demands but not in perfect real-time. Do Not Sell or Share My Personal Information, What is cloud management? The PM may also look at the individual availability of each worker per day, while accounting for the fact that the work can sometimes take longer than expected. Basically, it ensures that a business has the resources in place to meet its current and future needs. This often manifests in the form of layoffs and adjustments to the forecasted demand. Capacity management definition Capacity management is managing the available capacity to ensure that resources are used optimally. These decisions can make or break the success of your business. Capacity management also means calculating the proportion of spacial capacity that is actually being used over a certain time period. Simply put, businesses have a certain number of available hours from resources and the goal here is to maximize the value gained within the given limits. Many projects also need time spent for leadership or the team as a whole to come together, define scope, go through requirements, get approval, and ultimately start work on the very first project tasks. It answers questions like: A lagging capacity management strategy involves reacting to demands as they reveal themselves. Now, as cloud environments transform IT, it is being extended to enable holistic planning, management, and optimization of all your resources in one place and at the same time. What capacity will you need to go live with successfully in either case? For example, a company might decide to run its factory for 24 hours instead of 8 to make use of spare capacity. Also, consider building in a cushion to anticipate issues like bottlenecks, sudden staff unavailability, or certain tasks taking more time than expected. Data can be used to prove why certain projects went well, why some went over time/budget, and why some utterly fail. Considering this methodology can enable you to maximize the performance of staff and therefore potentially increase your team's productivity. After all, the company may not be able to anticipate factors like market disruptions, growth of competitors, or a tepid customer response to their growth strategy. A learning curve is a mathematical concept that graphically depicts how a process is improved over time due to learning and increased proficiency. Also, note the level of context-dependent nuance you may see in the numbers. In a service-based industry, such as catering, your capacity may refer to your ability to have enough workers available to adequately perform the expected level of service quality. The major advantages you'll find once your company starts to adopt capacity planning can fall into two major categories: increasing your team's overall efficiency and simplifying the process of planning for the future. VMware Explore 2022: VMware pitches multi-cloud to customers, Do Not Sell or Share My Personal Information. Capacity management is a business practice organizations use to maximize their production methods, resource uses and strategies. They may even seek to achieve an exact match during times when balancing resource availability with budget constraints is absolutely paramount. The number and type of networks being monitored is likely to vary as well. Cookie Preferences They can determine exactly how much capacity they have by multiplying the number of workers (or freelancers) available to perform the needed work by the number of hours each person is available to work. In many contexts, resources often refers to more than one type of resource. Capacity planning is the process of evaluating all available production resources, including machinery, staffing, and work centers to understand if the manufacturer will be able to meet customer demand now and in the future. In this article we will take a deeper dive into capacity management, why it is important, how companies can do it, and undertake a short analysis of the best capacity management tools out there. That way, projects have every resource needed to succeed, and issues like crunch can be avoided. In todays world of constant and ever accelerating change we have the tendency to discard the old and look for the new. Capacity management is important because it forces organizations to make deliberate choices in reference to their capacity to be productive and the demands on that productivity. On the flip side, overestimation of needed resources and overallocation of budgets can lead to low productivity and even low worker morale if people are onboarded with nothing to do. The methodologies and processes used for IT capacity management may vary, but however it is accomplished, at minimum, it requires the ability to monitor IT resources closely enough to be able to gather and measure basic performance metrics. They should also set contingency plans for cases when the number of people (or, more generally, the available supply of resources) cannot keep up with project demands or if there are too many people (or an oversupply of resources) compared to the current levels of demand. The latest and (greatest) features and releases from Tempo. Capacity Plan: A Capacity Plan is used for planning & managing the resources required for delivering IT . Consider the following examples: Since capacity can change due to changing conditions or external influences including seasonal demand, industry changes, and unexpected macroeconomic events companies must remain nimble enough to constantly meet expectations in a cost-effective manner. Machines require raw materials to fabricate, too. While some organizations try to diligently match supply with demand perfectly, the reality is that there are pros and cons to this strategy (which we will dive into further below). This provides a healthy buffer in case demand unexpectedly jumps but doesn't unreasonably overprovision your environment. The Boy Scout motto is "always be prepared," and one of the most common phrases repeated to modern organizations is that "you can't manage what you can't measure." The inability to replenish a retail partner's inventory in a timely manner is bad for business. Project capacity planning - Project managers estimate the amount of time their assigned team can work in a given timeframe to balance workloads against project delivery milestones. Disaster recovery and IT security teams must protect the network on several fronts to keep data safe from potential attackers. Capacity (or the lack of it) is central to reducing disaster risk and therefore critical to meeting development objectives. The fourth technique is to create spare capacity. An organization wants to avoid both underprovisioning workloads in such a way that they cannot perform adequately, and overprovisioning them by allocating resources they do not need. Always always build in time to get everyone up to speed on a project before it is expected to hit the ground running. Copyright 2022 Day.io Holdings Limited. This means making sure that there is extra capacity available to meet unexpected demand. For example, a manufacturing company might invest in a new production line to increase capacity. Workloads with fast-changing capacities are ideal candidates for the cloud, where resource allocations can be easily scaled up and down. That does not mean that cloud platforms automatically optimize resource allocation. The central processor unit (CPU) in servers and other connected devices, such as routers, storage and controllers, should be monitored to ensure that their processing capabilities are not frequently "pinning" at or near 100%. The management uses lead strategy as an important tool to attract customers towards its own products and away from those of rival companies, especially because of inventory shortage during high demands. Importance of Capacity Management Without proper analysis and management of a company's capacity, it would be very difficult to create a sustainable business model. This consists of identifying and addressing bottlenecks in the system that are limiting output. Capacity management is of particular concern to large companies because it's relatively easy to purchase additional hardware for smaller organizations at a low cost; however, when a business grows, adding new software becomes exponentially more expensive. If there is not enough capacity to meet demand, this can lead to lost sales and opportunities. For most types of cloud services, it's left to the user to determine how many resources cloud workloads will require at any given moment. Why is capacity management important in the cloud? Plan to allocate 20% more resources to each workload than the baseline requirements dictate. The whole point of capacity management is having enough resources (e.g. Copyright 2000 - 2023, TechTarget Further, it might be difficult for some organizations to engage in long-term planning and strategy if resources are constantly fluctuating. Bad things can happen when budgets don't reflect reality. This approach reduces the risk that the organization will end up spending too much money on resources that they do not need. They may upgrade their machinery to boost the quantity of units being made, as this may be the limiting factor to the number of goods being produced. The word "resource" in "resource capacity management" refers broadly to the total sum of resources an organization will need to meet the calculated demand level. This rate can, in turn, allow you to understand your current capacity and anticipate any changes needed to meet upcoming demands. Using capacity management forces your organization to think more deliberately not just about staff but also how and why they are able to be productive. Take a second look if you dont use these disciplines to manage your environments yet. By optimizing processes and using resources successfully, businesses can achieve maximum productivity and eliminate waste. Once you identify potential skills shortages, you can decide whether you need to hire new employees, upskill current employees, or plan to work with contractors once the time comes. Avoid disruptions to users. Production capacity management most often refers to an organization's ability to produce a specific good. Formula, Calculation, and Example. While it has been a part of IT workflows for decades, capacity management has become especially important since the emergence of cloud computing. With this information in hand and with new features on the way you can get smarter and more accurate about your capacity for the next amazing project on the horizon. Ultimately, every goal should come back to creating value for customers and stakeholders, so use your understanding of those areas along with hard metrics (customer surveys, earnings statements, etc.) COD is a capacity management technique that is becoming more and more common. Ultimately, those using a lag capacity management strategy must be prepared to account for the latency that comes from acquiring new resources, such as hiring, training, etc., so that the risks of under-allocation are balanced with the risks of over-allocation. In addition to ensuring that systems are performing at adequate levels to achieve a company's goals, capacity management can often realize cost savings by avoiding over-provisioning of hardware and software resources. 3 Key Benefits of Hybrid Cloud as a Service, 4 Things You Need to Know Now About Edge Computing, How to maintain network continuity in a DR strategy, Prevent different types of network attacks with DR planning, 11:11 grows DR portfolio after Sungard buy, BackupLabs devises SaaS backup for under-protected apps, CloudCasa plans split from Catalogic as independent company, Data protection for SaaS-based apps is a work in progress, Use Cockpit for Linux remote server administration, Get familiar with who builds 5G infrastructure, Do Not Sell or Share My Personal Information, Networks and related communications devices, Storage systems and storage network devices. Capacity to meet customer demand is that you need to go live with successfully in either case business! 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