ITIL Demand Management | ITIL Foundation | ITSM

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In this tutorial, we will discuss the ITIL Demand Management Process. Within this chapter, you will learn What is Demand Modeling and What is ITIL Demand Management all about? - The Definition, objective, activities, process flow, and roles of Demand Management - ITIL V3 Process.

What is What is ITIL Demand Management Process?  

In ITIL V3, Demand Management is a process of Service Strategy Process Group operating under ITSM best practices. The definition is as follows:

Accoring to the definition, ITIL Demand Management is the planning technique used to forecast, plan for and manage the demand for products and services for a period of time. It is all about matching the supply with the market demand.

ITIL Demand Management Objectives: 

The primary objective of ITIL Demand Management is to predict, understand, and influence customer demand for services.

This process works closely with Capacity Management to ensure that the service provider has sufficient capacity to meet the required demand for particular services.

ITIL V3 Demand Management Goals: 

As per ITIL V3, the Goals of Demand Management Process are as follows:

  • Reduce risk of service unavailability by efficient management of demand.
  • Manage costs & create values through reducing surplus capacity.
  • Balance demand & supply of resources.
  • Maintain quality of service by ensuring sufficient service capacity.

ITIL V3 Demand Management Activities: 

According to ITIL v3, Demand Management has to perform 3 major activities (Also known as Demand Modeling) throughout the process lifecycle. Those activities are as follows:

1. Analyzing Current Usage of IT Services:

This is achieved by analyzing the service desk data regarding incidents, requests, and problems. Also, network usage and uptime are measured via a service dashboard (e.g.: Network Monitoring System).

2. Anticipating Future Demands for IT services:

In this activity, the Business Relationship Manager (BRM) or Customer Relationship Manager (CRM) speaks with the customers directly about upcoming needs.

Also, the MIS Team (Management Information System) analyzes the service-usage trends for similar customers to calculate the estimated future usage.

3. Influencing Consumption by Financial or Technical Means:

The last activity of demand management that helps service provider in controlling the demand to a great extent. By practicing this activity, a service provider may define a fair usage policy for any service he provides to customers.

For example, if a customer uses the provided service more than anticipated in the SLA, a service provider may charge additional fees for the excessive usage. This way the service provider may balance the extra cost incurred due to heavy usage

ITIL Demand Management Sub-Process: 

According to ITIL v3, Demand Managemen has two sub-processes. All the sub-processes and their objectives are described below, followed by a diagram showing the ITIL Demand Management Process flow: 

1) Demand prognosis:

Demand Prognosis is the means of analyzing Pattern of Business Activity (PBA).

This is where a service provider analyzes IT service consumption & forecasts future consumption based on known parameters, such as service-consumption trends and service-quality feedback from the customer.

Sometimes, the customer may also directly inform the service provider about increasing demand of service.

2) Demand control:

Demand Control is the way by which providers control IT service consumption. This can be either through financial means (such as increased charges for higher usage) or by technical means (such as network throttling).

One of the popular strategies for Demand Control which many service providers implement is by offering differentiated service packages. This can controls both demand and service-cost while providing the customer with the services they use and value most.

Important Terminologies & Definitions: 

Pattern of Business Activity (PBA):

  • PBAs are workload profiles describing the demand for particular services.
  • PBA analysis helps service provider to know about the service-usage pattern of multiple customers. PBAs are an important tool used by the ITIL Demand Management for anticipating and influencing service demand.
  • The Pattern of Business Activities (PBA) Analysis is generally based on certain parameters, such as frequency, volume, duration, location, and user profile.

ITIL Demand Management Roles: 

Demand Manager:

  • This Role is the Process Owner for ITIL Demand Management Process.
  • Demand Manager is responsible for understanding, anticipating and influencing customer’s demand for services.
  • Demand Manager works jointly with Capacity Manager to ensure that the service provider possesses sufficient capacity to meet the required customer demand.
  • In some smaller organization, the Demand Manager & Business Relationship Manager role may be taken care by a single entity.

We hope that you have enjoyed the above article describing the Demand Management Process in ITIL V3. Be with us to explore free training on Leading Technologies and Certifications.

Leave us some comments if you have any question or you need any further clarification on ITIL Demand Management, we would be happy to help you.

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I'm passionate about Information Technology & spreading my knowledge makes me happy. I Have MBA(IS), ITIL, PRINCE2, CCNA, CCNP, MCSA, MS Hyper-V Certifications, and Trained in PMP, CCIE. And also have 10+ Yrs of Work Experience.
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