What Is Demand Management?
Demand management ensures that the agreed service levels are achieved and services are provided efficiently and effectively.
The demand management process is responsible for identifying, analyzing, prioritizing, and authorizing service requests. This process also monitors and controls service requests throughout the service lifecycle.
Service requests are inputs to the demand management process. A customer, user, or another internal or external stakeholder may raise a service request.
The demand management process ensures that all service requests are logged, tracked, and monitored. Service requests that cannot be fulfilled are either rejected or put on hold.
It is important to note that demand management is different from capacity management. Capacity management ensures that the service providers have adequate resources to meet service demand.
Demand management ensures that the services are provided efficiently and effectively.
The demand management process is typically divided into four main activities:
- Service request intake
- Service request analysis
- Service request prioritization
- Service request fulfillment
The demand management process is typically mapped out in a demand management plan. This plan documents the process flow, roles and responsibilities, and service request Categories.
The demand management process should be regularly reviewed and updated as needed.
How do organizations manage demand for their services?
To manage demand for their services, organizations need to understand the sources of order and use appropriate techniques to forecast and manage that demand.
Several factors can contribute to the demand for services, including:
- Seasonal factors
- Changes in the economy
- Changes in customer behavior
- Changes in technology
Organizations need to consider all these factors when forecasting service demand.
There are several different ways that organisations can forecast demand for their services. Some standard methods include:
- customer interviews
- focus groups
- data analysis
Once demand has been forecasted, organizations must implement plans to ensure they can meet that demand. This may involve:
- increasing capacity
- training staff
- introducing new processes or technology
Organizations also need to consider how they will manage any peaks in demand. This may involve:
- introducing shift patterns
- using contractors
It is essential for organizations to monitor demand for their services on an ongoing basis and make changes to their plans as necessary.
What is the difference between demand management, capacity management, and availability management?
There are three critical concepts in service management:
Each concept is concerned with a different aspect of service management, but they are all closely linked.
Demand management is about understanding and managing customer demand for services. It includes forecasting future demand, controlling the release of new services, and scaling existing services to meet changing directions.
Capacity management ensures that the resources required to deliver services are available when needed. This includes planning and sizing infrastructure, managing capacity utilization, and matching capacity to demand.
Availability management is about ensuring that services are available when they are needed. This includes monitoring service levels, managing incidents and problem management, and conducting capacity and availability planning.
Activities in Demand Management :
1. Demand Capacity - Demand Capacity is the processes and tasks necessary to ensure that an organization's demand matches or exceeds its available capacity. By checking or exceeding demand, these activities help to avoid capacity issues that can lead to disruptions in service or supply, product quality issues, and delivery delays.
2.Demand Chain - The demand chain refers to the set of activities that a company undertakes to manage the demand for its products or services. The demand chain includes everything from forecasting demand to controlling inventory to fulfilling orders.
The demand chain activities in demand management can be divided into four main categories:
- Forecasting demand
- Planning inventory
- Fulfilling orders
- Managing customer relationships
3.Demand Communication - The demand communication process refers to the activities involved in identifying, tracking, analyzing, and communicating information about product demand. The demand communication process is a critical component of demand management, which is the process of forecasting customer demand and aligning production operations with customer demand.
4.Demand Modelling - Demand modeling creates a model that forecasts future demand for a product or service. The model is based on historical data and trends. The demand model can make production, inventory, and marketing decisions.
5.Demand Shaping - Demand shaping stimulates consumer demand for a good or service to increase sales and revenue. This can be done through various marketing and pricing strategies designed to create a sense of urgency or scarcity around the product.
6.Demand Sensing - Demand sensing analyzes internal and external data sources to generate real-time insights into customer demand. This helps businesses anticipate customer needs and make better decisions about inventory levels, pricing, promotions, and marketing campaigns.
7.Demand Prioritizing - The aim of demand prioritizing is to ensure that the most critical demand streams are given the highest priority in terms of resources and attention to maximize the chances of meeting customer needs and expectations.
The benefits of the Demand Management Process :
1. The Demand Management Process ensures that all requests for IT services are recorded, analysed, and managed consistently and efficiently.
2. The Demand Management Process ensures that all requests for IT services are aligned with the overall business strategy and objectives.
3. The Demand Management Process helps to reduce the overall cost of IT services by ensuring that only those indeed required services are requested.
4. The Demand Management Process helps to improve the quality of IT services by ensuring that all requests are properly analyzed and that the resulting service meets the needs of the business.
5. The Demand Management Process helps improve IT service delivery efficiency by ensuring that all requests are appropriately prioritized and that the resulting service is delivered promptly.