The demand for the ITIL foundation must be managed. Excessive ordering of services is a source of risk. There are many examples where supply has exceeded demand. Poor demand management is a risk for service providers because it represents uncertainty.
Excess capacity ITIL foundation
Excess capacity can be used to meet the demand of the ITIL foundation that may arise, but in most cases, excess capacity is a cost, not creating value that would serve as a basis for cost recovery. Customers are not willing to pay for idle capacity if it is of no value to them. Some degree of idle capacity may be desirable. In fact, it may create value through a higher level of assurance. They have a specific purpose and therefore should not be considered idle or useless.
Inadequate capacity can affect the quality of service and cause accidents. It can also hinder the pace of service development. Service level agreements, forecasting, planning, and close coordination with customers can reduce demand uncertainty, but cannot eliminate it completely.
To avoid wasting resources on developing service capabilities for non-existent services, you need to understand what activities create demand. The primary source of service demand is the business process. To really understand the demand for a service, you need to understand how the business process creates that demand. If that business process changes, such as hiring 50 additional employees, we need to be able to predict exactly how that will affect demand. If the understanding is deep enough, then each unit of demand created by the business activity will correspond to a unit of service capacity.
If the business activity model (PBA) is understood, then.
- Service planning can optimize design to match demand
- Service catalogs can correlate demand patterns with appropriate services
- Service portfolio management can approve investments in additional capacity, new services, or service changes based on business plans
- Service operations can adjust resource allocation and scheduling
- Service functions can identify opportunities to integrate demand by grouping closely related demand patterns.
Financial management can approve appropriate incentives to influence demand. Demand management techniques such as off-peak pricing, volume discounts, and differentiated service levels can be used to influence the emergence of demand for a particular model. Base demand must still exist. The mere existence of an opportunity does not in itself create demand for it. A service capability is not like an industrial product. It cannot be stored and used on an as-needed basis. Resolved events cannot be stored. Resources to resolve events must be available when they occur.
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