The ability to adjust to new conditions is a common trait among successful companies. In order to ensure that businesses are always as productive as possible, capacity management is an essential business function. Understanding the numerous applications of capacity management will help you learn how to enhance your company’s profits. This article explains what capacity management in ITIL is. It also comes with a guide to help you choose the best from the available capacity management tools. Let’s dive in!
What Is Capacity Management?
Companies must stay agile enough to consistently satisfy expectations in a cost-effective way since capacity might fluctuate as a result of shifting conditions or external influences, such as seasonal demand, industry changes, and unanticipated macroeconomic events. It may be necessary, for instance, to reallocate some of the company’s raw material resources in response to shifts in supply and demand. Overtime, outsourcing, new machinery, and even the disposal of property may all be necessary in order to put capacity management into action.
Unfulfilled orders, customer churn, and lost market share are all potential outcomes for businesses with inefficient capacity management. It is imperative for a business to adequately prepare for an unexpected increase in demand when they release a groundbreaking new product and accompanying marketing campaign. The company suffers if it is unable to timely refill the inventory of a retail partner.
Therefore, it is difficult for businesses to maximize output while reducing expenses. To undertake proper quality control inspections of its goods or services, for instance, a corporation could not have the necessary resources in terms of time and manpower. Overuse of equipment can lead to breakdowns and burnout among workers, who may also experience stress and low morale.
What Is Capacity Management Used For?
The production of goods and services and the operation of information technologies, or IT, are two distinct but connected corporate operations that are related to capacity management. Here is how your company might use them:
Production Capacity Management
The effectiveness with which your organization uses its resources to produce items can be analyzed through capacity management. Facilities, personnel, tools, raw materials, components, packaging materials, transportation options, and finished goods all fall under this category. Failure to meet delivery deadlines and ensure quality output can result from a lack of any one of these resources. However, if there are too many resources available, that could indicate wasteful spending and cut into profits.
The demand for goods is influenced by a number of typical factors. Organizations can benefit from capacity management by better preparing for:
#1. Changes in the Seasons
Production at your company may need to be adjusted somewhat throughout the year to account for seasonal changes in demand, such as the seasonal uptick in consumer spending that occurs around the holidays. However, some businesses experience extremely seasonal demand, necessitating cost reductions during slow periods and production increases at peak times.
#2. Economic Developments
For a better understanding of both short- and long-term demand patterns, your business should attempt to forecast macroeconomic trends. The ability to quickly adjust production in the face of sudden economic shifts could likewise be highly valued.
#3. Tending Markets
As new competitors come into or leave your market, your company’s market share probably changes. The number of resources your organization needs will change as a direct result of these changes.
#4. Industry Trends
Sometimes, the majority of the market’s companies are impacted by wider trends in the industry. Oil firms, for instance, can experience shifts in demand as the use of electric cars increases, necessitating an adaptation to them.
Information Technology Capacity Management
Capacity management can also be used to describe how well a company’s computer networks process data and deal with traffic. It’s possible that your company needs a lot of processing power for things like research and product development, or for dealing with high volumes of consumers without any hiccups.
Data processing is enhanced by IT capacity management in the following ways:
#1. Evaluation of Skills
The goal of IT capacity management is to ensure that IT resources are utilized to their fullest potential and that performance goals are met.
#2. Inspecting Activity
It is helpful for businesses to gain insight into how their computing resources are actually being utilized.
#3. Tuning
Through the use of IT capacity management, organizations are able to fine-tune their systems’ configurations, thereby boosting computing performance without incurring additional expenses.
#4. Management of Demand
Improved procedures can be used by businesses to lessen the load on computing infrastructure. In order to avoid scheduling maintenance at peak times, several businesses will shift their maintenance schedules.
#5. Resource Allocation
Organizations can plan ahead for their future computing needs with the help of IT capacity management. In order to prepare the business for the future, they may decide to upgrade hardware or computer programs.
Capacity Management Strategies
Managers in the manufacturing sector have developed a number of methods for improving output and expanding their companies’ capacities. Some of the most widely used approaches to managing capacity include:
#1. The Lag Strategy
This method is more cautious, as it requires the manager to wait until there is a constant growth in demand before deciding to raise capacity. The management then boosts output to meet the needs of the current market.
#2. Lead Strategy
This strategy is substantially more aggressive and risky than the lag approach. The company figures that if it increases capacity before there is any genuine demand, it will be plenty. It’s common in rapidly growing businesses or markets with high consumer demand. Therefore, most micro and small businesses stay away from this tactic.
#3. Dynamic Strategy
This strategy is driven by forecasts and places emphasis on capitalizing on market trends to expand production. The manager adjusts production levels in advance based on an examination of sales prediction data and actual demand.
#4. Match Strategy
This strategy combines elements of both lead and lag approaches. In order to keep up with customer demand, the corporation makes subtle but important adjustments to its production output. Small increases in output are made whenever it is anticipated that demand may increase.
Capacity Management Tools
Capacity management tools aid businesses in assessing their resource requirements in light of market demand swings. Managers and higher-ups utilize these tools to keep tabs on staffing levels and calculate how much work can be accomplished with the resources at their disposal. It also enables you to view the number of staff you currently have and determine whether they are overworked or underutilized. Here are some capacity management tools that you can use for thecapacity management of your company:
#1. Toggl Plan
Toggl Plan takes great pleasure in being accessible to people of all skill levels and backgrounds. There are three primary user interfaces in this piece of software: project management, team planning, and task management. In order to easily monitor and plan for capacity, all interfaces make it possible to observe the workloads and tasks given to each team member. This tool’s benefit is that you can test it out without paying anything.
#2. ClickUp
When it comes to managing projects, fostering smarter collaboration, and centralizing all of a team’s work from several apps in one place, ClickUp is the best productivity platform for teams of any size. ClickUp is the best capacity planning software for monitoring workloads, managing resources efficiently, and increasing productivity because of its plethora of configurable options.
#3. Mavenlink
Mavenlink provides tools for managing and optimizing available resources. It is a comprehensive software solution with a wide range of features and analytics that can help your organization save time and money by automating key activities, intelligently aligning personnel and team configurations to business goals, and performing a wide range of forecasting and planning tasks. The first out of Mavenlink’s four pricing categories allow for a free trial, but the other three require payment.
#4. Resource Guru
When there is a high demand but a low supply of human resources, Resource Guru, a piece of resource management software, can help pinpoint those individuals who are already at capacity. This program offers commonplace job management capabilities, such as integration with ERP and CRM applications, and allows you to keep track of both your tasks and the resources available to complete a project. This program has a collaboration feature that shows you exactly who is working on what and when it will be completed.
#5. Saviom
Saviom provides enterprise software for managing resources and managing employees, which the company believes will revolutionize productivity in large organizations. Maximizing utilization, optimizing the workforce, and decreasing project resource costs are all part of this. The Saviom website does not include any price information. They prefer that you get in touch with them to receive a price quote. However, you can test out one of their three tiers for free.
#6. Teamup
Teamup is a web-based calendar service that facilitates collaboration by allowing members to coordinate their schedules and exchange important dates with one another. It’s an effective replacement for managing resources, and it includes tools for teamwork such as document and file sharing and calendar synchronization. You can tailor the schedule to your preferences as well.
#7. Kantata
Capacity planning software Kantata (formerly Mavenlink) includes tools for managing resources, budgets, team cooperation, and projects. Kantata’s capacity to visually and in a variety of formats communicate progress is one of its greatest assets.
#8. Forecast
A forecast is a hub for project accounting, resource management, resource allocation, business intelligence, and team collaboration. One of the software’s main selling features is its compatibility with other programs. It can communicate with Azure, Google Drive, Microsoft Excel, and many more.
Capacity Management in ITIL
Capacity management in ITL refers to the process of adjusting the allocation of IT resources in light of projected demands. The Capacity management that works is proactive rather than reactive. Capacity managers that do their jobs successfully ensure that all IT needs, including those of the company, are fulfilled with the fewest possible resources.
What’s Included in Capacity Management in ITIL?
A capacity management process can encompass a wide variety of information technology (IT) activities. Some examples are as follows:
- Use monitoring, analysis, and optimization tools on your IT resources.
- Control the need for computer power (doing so calls for an awareness of what’s most important in the company).
- Develop a simulation of infrastructure efficiency to predict resource demands.
- Make sure apps are the right size (without being too small) so that service levels can be maintained.
- Create a capacity plan that accounts for current usage, future requirements, and the expenses associated with supporting new software releases.
- Create a yearly strategy for expanding the supporting infrastructure with feedback from other groups.
How Is Capacity Management Implemented in ITIL?
IT service management best practices center on providing comprehensive support for customers. You do not apply ITIL. Instead, it serves as a roadmap for your IT department. Whether you’re using ITIL v3 or the most recent iteration, v4, you should adhere to the aforementioned best practices, seek out executive support, and concentrate on making behavioral and mental shifts. Prioritize the success of your firm and the satisfaction of your customers. ITIL emphasizes ongoing improvement rather than being a step-by-step procedure.
Tips for Managing Capacity
Here are some pointers for effective capacity management in both production and IT systems:
#1. Recognize the Resources You Have
Successful capacity management requires a thorough familiarity with all of an organization’s available resources. It’s easy to miss some resources and fail to see some potential solutions when you’re solely focused on one issue or circumstance. Make sure you have a complete and accurate inventory of your company’s assets before you start working to improve your capacity management.
#2. Perform a Variety of Tests
Both manufacturing and information technology systems are interconnected webs, vulnerable to disruptions at any level. The sheer number of possible outcomes makes exhaustive testing difficult. It is nevertheless crucial that your business uses capacity management to investigate as many opportunities for increased productivity or processing speed as possible.
#3. Dig into the Past
Most businesses struggle in some way to reach production targets or keep IT systems running smoothly. Taking stock of the difficulties you’ve faced in the past can help you create more robust procedures for the future. Case studies of how other businesses dealt with manufacturing or IT problems can also be instructive.
#4. Set Your Priorities Wisely
Due to the nature of capacity management, your business may always look forward to learning about fresh opportunities for growth. It’s possible to start fixing one problem before realizing another, more serious one exists in your production or IT system. Make sure your capacity management strategy lets you prioritize the most pressing activities and projects so you can truly avoid the potential problems you’ve identified.
Benefits of Capacity Management
The following are benefits of capacity management:
#1. Ensuring Maximum Productivity
Multiple supply chains, production sites, and distribution networks are frequently used in the creation of a single product. Since there are so many moving parts, it can be hard to tell if your company will be able to meet its delivery deadlines. Capacity management verifies if the current means of production is sufficient.
The efficiency of an organization’s IT infrastructure is usually subject to high expectations. If such goals aren’t being met, capacity management will let you know. You can save money on information technology (IT) services you aren’t using if you keep track of how well your system is truly performing.
#2. Detecting Trash
Finding underutilized or overpriced resources is one of the primary goals of capacity management. Capacity management could, for instance, determine whether or not the cost of maintaining an older piece of manufacturing equipment is worthwhile. You may realize that purchasing new machinery will allow you to increase output per unit of space while simultaneously decreasing maintenance expenses.
#3. Tracking Down System Problems
Capacity management aids a company in pinpointing the source and root cause of a problem. The results of your company’s research could have significant impacts beyond productivity. Your organization may realize a need to improve employee management in the failing location if it operates two similar production facilities, but one generates more output per employee hour. It’s possible that if you provide your production workers with a better place to work, they’ll be more productive.
The skill to troubleshoot is crucial for fixing computer problems. Like performance management, capacity management isolates malfunctioning nodes in a network as the source of slow computers. Your corporation can find potential future system faults and fix them before they disrupt operations by using test scenarios.
#4. Making Contingency Plans
Effective capacity management is essential to the safe and successful growth of any business. Your company can save money by anticipating production needs and buying resources at cheaper times when it gains a deeper grasp of demand cycles. It’s also better prepared to handle the fluctuations in demand that can have a significant impact on your business’s bottom line.
Protecting the efficacy of your IT system is crucial because of the widespread reliance on computers in business and industry.
Why Is Capacity Management Important?
Companies must have the resources to keep up with customer demand. It is possible to lose revenue and opportunities if production capacity is inadequate. On the other side, if there is an excess of capacity, resources will be squandered and prices will rise.
What Are the Main Elements of Capacity Management?
Here are the main elements of capacity management:
- Business capacity management.
- Service capacity management.
- Component capacity management.
- Capacity management reporting.
What Are the Responsibilities of a Capacity Manager?
The Capacity Manager is accountable for providing sufficient IT Capacity to deliver on service levels, advising senior IT management on how to balance supply and demand, and making the most of available resources.
What Are the Steps in Capacity Management?
The following steps are to be taken in capacity management:
- Establishing company’s plans.
- Evaluating customer demands and opportunities.
- Analyzing the output of current infrastructure and resources.
- Carrying out capacity planning.
- Tracking and reviewing production capacity.
Final Thoughts
One of the first steps in effective capacity management is acquiring the proper capacity management tools. Finding the best candidates to join your team is a subsequent stage. If the capacity of your team needs to be increased in order to meet demand, BusinessYield can assist you in finding competent freelancers that are the right fit.
You can find people to work with you on projects of any size, duration, or complexity by choosing the right capacity management.
Related Articles
- ITIL: Meaning, Foundation, Process & Certificate
- ITSM: Meaning, Process, Tools & Certification
- IT SERVICE MANAGEMENT: Definition and Processes
- 21 GOOD SKILLS TO PUT ON A RESUME: Best 2023 Practices
- CAPACITY PLANNING: Meaning, Importance, Strategies and Tools
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