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Top 5

I’ll Have Another! Why Demand Management is Critical

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by Jim Kane

You will recognize “I’ll Have Another” as the 2012 Kentucky Derby and Preakness winner, but it is also a typical refrain from clients who consistently ask for more. While clients need to understand the implications of their requests, the sourcing governance group also needs to be able to manage the requests and the service provider with a clear process.

To complicate matters, the average IT department does a very poor job – when it does at all – of managing basic supply and demand despite the fact that it produces highly complex products and services. It generally has very little understanding of its demand and supply chains and would have a hard time answering fundamental questions like, “What is currently in the pipe?” or “What do we have to deliver in the next six months?” or “What is our projected resource utilization for the next quarter?.” This is why demand management is critical in the execution of a sourcing agreement.

Top 5

The following Top 5 ideas will help you manage the client that continues to say “I’ll have another!”

  1. Avoid more of the same. Many contracts have defined resource units with a detailed description of each service and its price. Issues arise when the service provider does not have the ability to react to either a large increase or large decrease in requested units. Contracts that are not built to scale up quickly result in delayed delivery and disappointed clients. Manage your forecast closely, and inform and begin working with your service provider early when you know of a significant volume change. This will leave ample time for each party to research the contractual implications, prepare staff and provision hardware and software for the change.
  2. Almost the same isn’t close enough. Due to changes in technology, those same well-defined resource units can change slightly throughout the term of an agreement. Different parties can read the same definition of a resource unit and come away with different meanings. Disagreement commences accompanied by delays in delivery. Take the time after contract signing to review the definitions of all resource units and document examples and scenarios of each.
  3. Manage the demand side of the equation. When it comes to supply and demand, IT is unduly focused on the supply side of the equation, or the how (including project management, software development and the management physical assets) to the detriment of the demand side. Develop a process to capture and prioritize business demand of your IT services, assigning resources based on business objectives, and deliver high quality and timely business benefits.
  4. Do the right thing, not just the thing right. Engage with your clients. Understand their business goals. Discuss alternatives, and don’t just work to get the “green light” to produce something … especially if that something does not add business value.
  5. Plan for backlog management. Avoid a backlog of service requests, which frustrate your clients and service providers. Continually review the process, the products being offered, the tools and systems being used and the skills of the staff performing the end-to-end service delivery. Use your issue management log, and escalate issues when they age beyond the stated time period.

To learn more about how to plan for and implement a demand management process, contact the author at jim.kane@isg-one.com.

About the author

Jim has in-depth experience in assessing and managing complex IT Infrastructure engagements focused on helping corporations achieve their business objectives. He offers expertise in strategy assessment and development, statement of work, service level agreements, business-driven RfP development, transactions, contract negotiations and transition planning across IT Infrastructure areas and expertise in IT service management integration. Jim has worked with global enterprises in the automotive manufacturing, banking and financial services, healthcare, utilities, aerospace and retail industries, focusing on collaborative techniques with clients and service providers to achieve the desired business outcomes. He recently led the negotiation of a large infrastructure contract with a utilities company and a cloud computing transition. Included in this successful project was the development and execution of the sourcing strategy, assessment and transaction process and project management, negotiation strategy development and financial proposals and executive leadership communication. Jim is ITIL V3 Foundation certified and a thought leader on the topic of the digital workplace.