Capacity & Demand Management Processes within the ITIL 2011 Update

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Capacity & Demand Management Processes

within the ITIL 2011 Update

Andy Bolton

CEO

UKCMG Forum 2011 – 22nd_{November 2011}

B4A-B4B – Capacity & Demand Management Processes within the ITIL 2011 Update

Abstract

The 2011 Edition of ITIL, released in July, is billed as resolving errors and inconsistency that were in the previous version, while improving easy-of-use.

As with the 2007 version (often called Version 3) it uses the lifecycle approach to service management and features Capacity Management and Demand Management as prominent and important processes.

This presentation is aimed at providing an overview of Capacity and Demand Management within ITIL 2011 edition.

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Agenda

• Introduction • ITIL V3/2011 Structure

• ITIL V3/2011 and the Service Lifecycle • Service Strategy

• Service Design • Service Transition • Service Operation

• Continual Service Improvement • Criticisms of ITIL

• A holistic view of Capacity Management • Conclusion

ITIL V3/2011 Structure

Five separate core books to represent the service lifecycle: • Service Strategy

• Service Design • Service Transition • Service Operation

• Continual Service Improvement

There is a recognition that services are created, used, revised and eventually retired and that each process varies in context with the stage of the lifecycle. For example capacity management at the service design phase is more about application sizing, whereas at the service operation phase it is about regular capacity planning.

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ITIL V3 Structure – The Model

© Capacitas 2002-2011 B4A-5 ITIL Service Design Service Strategy Service Transition Service Operation C ont inual S er vic e Imp ro ve me nt C ont inual S er vi ce Im p ro ve m ent

ITIL V3 Structure – The Service Lifecycle

B4A-6 Service

Strategy Service Design Transition Service Operation Service Continual Service Improvement

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ITIL V3 Structure – the Application Lifecycle

© Capacitas 2002-2011 B4A-7 ‘Phase-out’ ‘Live’ ‘Development’ ‘Concept’ Design • Re view d es ig n f or per fo rm -an ce pr ob lem s, co sts an d s cal ab ility Live • B us in es s-as -u su al cap ac ity m an ag em en t – en su rin g s ys tem s c an m ee t dem an ds u po n th em b as ed on c ur ren t an d f utu re w or k Roll-out • P ro vid e cap ac ity as su ran ce as ses sm en t th at tr an sien t c ap ac ity req uir e-m en ts c an b e m et Testing • Re view p er fo rm -an ce tes tin g r es ults fo r an y pr ob le m s Coding • P ro vid e des ig n g uid an ce to av oid p er fo rm -an ce an ti-pa tt er ns Feasibility • N ee d to p ro du ce a n ap pr ox im ate co st of sy stem to m ee t sp ec ified per fo rm an ce End-of-life • P lan fo r d e-co m m iss io nin g req uir em en ts in clu din g an y tr an sien t c ap ac ity req uir ed fo r m ig rati on to n ew platf or m Changes • A ss es s al l s oftw ar e rel ea se ch an ges to th e ap pli cati on to en su re th ey w ill n ot af fec t s ys tem Require • Re view if req uir e-m en ts ar e a ch ie va ble w ith in bu dg et

Software Application Lifecycle

Service Transition Service Strategy

Service Design Service Operation

Continual Service Improvement

Service Strategy (SS)

Service Strategy contains several important business-facing processes: • Strategy management for IT services

• Service portfolio management • Financial management for IT services • Demand management

• Business relationship management

Following ITIL V3’s release in 2007 there were lots of criticisms of this book within the industry. Many of these criticisms were unjustified as it rightly recognised that service strategy was a key component to aligning IT with the business and therefore delivering value to the business. The book has been heavily revised for the 2011 update to make its concepts more accessible. V3 introduced new diagrams into the ITIL world in 2007, a few of which have been deleted and some new additions included in the 2011 update.

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Service Strategy (SS)

Contains a section on Demand Management (4.4 – 12 pages) which covers it and its relationship to capacity management. It starts:

“Demand management is the process that seeks to understand, anticipate and influence customer demand for services and the provision of capacity to meet these demands. Demand management is a critical aspect of service management. Poorly managed demand is a source of risk for service providers because of uncertainty in demand. Excess capacity generates cost without creating value that provides a basis for cost recovery. Customers are reluctant to pay for idle capacity unless it has value for them.”

It defines the scope of demand management as:

• Identifying and analysing patterns of business activities (PBA)

• Identifying user profiles and analysing service usage patterns

• Identifying, agreeing and implementing measures to influence demand together with

capacity management

It recognises the main value to the business of demand management is to “achieve a balance

between the cost of a service and the value of the business outcomes it supports”.

Service Strategy (SS)

The section on demand management recognises the inherent importance of balancing demand and supply. It identifies the objectives of demand management as:

• Identify and analyse patterns of business activity • Define and analyse user profiles

• Ensure services are:

• designed to meet the PBA; and

• have the ability to meet business outcomes

• Work with capacity management to ensure that resources are available to meet demand

• Anticipate and prevent or manage situations where demand exceeds capacity • Gear the utilisation of resources to meet the fluctuating levels of demand

There is a recognition of overlapping scopes of demand and capacity management, as they both intend the same business outcomes whilst optimising investment. ITIL Service Strategy suggests that demand management focuses on the business aspects and capacity management focuses on resourcing and technology. This has interesting organisational and process implications.

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Service Strategy (SS)

Customer

assets Service assets

Present Demand

Respond with supply Service consumption

produces demand consumes capacity Service utilisation

Service Strategy (SS)

Business

Process Process Service

Demand pattern Delivery schedule Pattern of Business Activity Capacity Management Plan Demand Management Service Belt

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Service Design (SD)

Service Design contains the following design-related processes, and the bulk of the capacity management process documentation (sec. 4.5 – 21 pages):

• Design Coordination

• Service catalogue management

• Service level management

• Availability management

• Capacity management

• IT service continuity management

• Information security management

• Supplier management

ITIL identifies the purpose of the capacity management process is: “to ensure that the capacity of IT services and the IT infrastructure meets the agreed capacity- and performance-related

requirements in a cost-effective and timely manner”. It notes that “capacity management is

concerned with meeting both the current and future capacity and performance needs of the

business”.

Service Design (SD)

ITIL identifies the key objectives of capacity management as:

• Produce and maintain an appropriate capacity plan

• Provide advice and guidance to business and IT on all capacity- and

performance-related issues

• Ensure service performance is achieved by managing performance and capacity of

both services and resources

• Assist with diagnosis and resolution of performance- and capacity-related incidents

and problems

• Assess the impact of all changes on the capacity plan and the performance and

capacity of all services and resources

• Ensure proactive service performance improvement measures are implemented

wherever cost-justifiable to do so

Importantly ITIL identifies the capacity management process as “the focal point for all IT

performance and capacity issues” covering “short-, medium- and long-term business

requirements” and “all areas of technology for all IT technology components and environments”,

including “space planning and environmental systems capacity”.

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Service Design (SD)

Capacity Management has the following benefits to the business:

• Improving the performance and availability of IT services by reducing capacity- and

performance-related incidents.

• Ensuring required capacity and performance are provided in the most cost-effective

manner

• Contributing to improved customer satisfaction levels by ensuring service levels are met

• Supporting the efficient and effective design and transition of new or changed services

• Improving the reliability of capacity-related budgeting* through the use of a

forward-looking capacity plan based on business needs and plans

• Improving the ability of the business to follow an environmentally responsible strategy**

using green technologies and techniques It does this by:

• Balancing costs against resources needed

• Balancing supply against demand

* One of the few places that links capacity management and financial management.

** By optimising asset utilisation this should ensure more environmentally effective use of power and space in data centres.

Capacity Management Sub Processes

Business capacity management Service capacity management Component capacity management

Production of the capacity plan

Iterative activities Demand management Modelling Application sizing Storage of capacity management data Strategic CMIS Covering all aspects of

capacity management

Tactical

Operational

Capacity management sub-processes

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Capacity management information system

(CMIS) Service Portfolio

Capacity Management Sub-Processes

SLA/SLR IT service _design

Service capacity management Component capacity management Capacity management tools

Review current capacity and performance

Improve current service and component capacity

Assess, agree and document new requirements

and capacity

Plan new capacity

Service Design (SD)

ITIL documents several “process activities, methods and techniques” involved within the capacity management process:

• Business capacity management • Service capacity management • Component capacity management • Design-related activities

• The on-going iterative activities of capacity management (see next slide) • Demand management in capacity management

• Modelling and trending • Baselining • Trend analysis • Analytical modelling • Simulation modelling • Application sizing B4A-18

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Ongoing Iterative Capacity Management Activities

© Capacitas 2002-2011 B4A-19 Tuning Analysis Monitoring Implementation Capacity management information system (CMIS) Service thresholds Resource thresholds Service exception reports Resource utilisation exception reports

Response time monitoring Threshold management and control

Service Design (SD)

Triggers of Capacity Management:

• New and changed services requiring additional capacity

• Capacity- and performance –related service breaches, events and alerts (inc. threshold exceptions)

• Exception reports

• Requests from SLM for assistance with capacity and/or performance targets and explanations of achievements

• Periodic trending and modelling • Periodic revision and reviews of:

• forecasts, reports and plans • business and IT plans and strategies • designs and strategies

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Service Design (SD)

ITIL specifies that the following processes that interface with Capacity Management are: • Availability management

• Service level management

• IT Service Continuity Management (ITSCM) • Incident and problem management • Demand management

Ideally this list should also include:

• Service validation and testing (within Service Transition) • Request fulfilment

Service Design (SD)

Inputs to Capacity Management: • Business, service and IT information

• Component performance and capacity information

• Service performance issue information and service information • Financial information*

• Change and configuration management information • Performance and workload information

Outputs of Capacity Management:

• Capacity Management Information System (CMIS) • The Capacity Plan

• Service performance information and reports • Workload analysis and reports

• Ad-hoc capacity and performance reports • Forecasts and predictive reports • Thresholds, alerts and events

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Service Design (SD)

Capacity Management Information System (CMIS) contains: • Business data

• Service data

• Component utilisation data • Financial data*

This data is used to drive the following reports: • Component based reports • Service based reports • Exception reports

• Predictive and forecast reports

Service Design (SD)

Critical success factors: • Accurate business forecasts

• Knowledge of current and future technologies • Ability to demonstrate cost-effectiveness

• Ability to plan and implement the appropriate IT capacity to match business need Risks associated with capacity management include:

• Lack of commitment from the business • Lack of information from business on future plans • Lack of commitment to resourcing and budget

• Too much focus on technology (component capacity management) and not enough on services (service capacity management) or the business (business capacity management) • Reports too bulky or technical and not appropriate

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Service Design (SD)

The service design book contains an example of a capacity plan. Its suggested contents are:

• Introduction

• Management summary

• Business scenarios

• Scope and terms of reference of the plan

• Methods used

• Assumptions made

• Service summary

• Resource summary

• Options for service improvement

• Costs forecast

• Recommendations

Service Transition (ST)

Service Transition contains the following processes: • Transition planning and support • Change management

• Service asset and configuration management • Release and deployment management • Service validation and testing • Change evaluation

• Knowledge management

Within Change Management, like Request Fulfilment, there exists a bi-directional relationship: • Many changes involving capacity will originate from capacity management. These will

often be driven by proactive capacity plans or reactive threshold alerting and will be raised as RFCs through the change process.

• Many changes will have a performance or capacity impact, especially on shared platforms, so should be reviewed and/or approved by capacity management. Change information will be used to assess impacts on capacity plans and SLAs. It notes that “capacity management has an important role in assessing proposed changes – not

only individual changes but the total impact of changes on service capacity”.

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Service Transition (ST)

Service Transition also documents examples of how capacity management is involved in service validation and testing, although it is severely lacking in information on performance testing.

• Service design manageability checks: Are designers aware of the capacity management approach, how should operations and performance be measured, is modelling being used to ensure design meets capacity needs?

• Build and test manageability checks: Has service been built and tested to ensure it meets the capacity requirements, has capacity information been tested and verified, are stress and volume characteristics built into the services?

• Release deployment manageability checks: Is capacity management involved in the deployment process so it can monitor deployment resources?

• Operating manageability checks: Is capacity information being monitored and reported on as the service is used and is this information provided to capacity management? • CSI manageability checks: Is capacity management feeding information into the

optimisation process?

An important output of capacity management are capacity plans and the CMIS. These are included as components of knowledge management.

Service Operation (SO)

Service Strategy contains several key operational processes: • Event management

• Incident management • Request fulfilment • Problem management • Access management

Within Event Management there is a recognition that “ the exact targets and mechanisms for

monitoring should be specified and agreed during the availability and capacity management

processes” as capacity and availability management are “critical in defining what events are

significant, what appropriate thresholds should be and how to respond to them”. Event

management should report events when they occur and responding to them appropriately. Within Incident Management there is a recognition that it "provides a trigger for performance

monitoring where there appears to be a performance problem”. Also “Capacity Management

may develop workarounds for incidents”. It also recognises the need for specialist processes for

evidence preservation if the incident is performance- or capacity-related so that the incident can be routed to the capacity management team.

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Service Operation (SO)

Although Request Fulfilment exists within this section there is no mention of its relationship to, or interfaces with, capacity management. This is strange for in reality there is a bi-directional relationship, similar to change management:

• Many service requests to increase or alter capacity, or migrate to a more performant platform, will originate from capacity management. These will often be driven by proactive capacity plans or reactive threshold alerting.

• Many service requests will have a performance or capacity impact, especially on shared platforms, so should be reviewed and/or approved by the capacity management function.

Within Problem Management there is a recognition that “ some problems will require

investigation by capacity management” and that"capacity management will also help in

assessing proactive measures”.

Service Operation (SO)

The majority of capacity management activities are covered in the Service Design book, but there are some that are recognised to naturally sit within Service Operation:

• Capacity and performance monitoring. • Handling capacity and performance incidents • Capacity and performance trends

• Storage of capacity management data • Modelling and applications sizing

Similarly the majority of demand management activities are covered in the Service Strategy book, but it is recognised that day-to-day demand management (i.e. management of service demand rather than the over-arching process) sits within Service Operation. These activities would include:

• Rescheduling a particular service or workload

• Moving a service or workload from one location to another • Limiting or moving demand

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Continual Service Improvement (CSI)

Continual Service Improvement does not contains any specific IT processes but instead reflects the methods and processes needed to make improvement across all the ITIL processes and across all IT services supported by the organisation. The only process is the seven step

improvement process.

It does however list the ways that availability and capacity management support the data processing activities of continual service improvement:

• Providing significant input into monitoring and data collection activities • Being accountable for the actual infrastructure monitoring and data collection • Being accountable for ensuring tools are in place to gather data

• Being accountable for ensuring that the actual monitoring and data collection activities are consistently performed

• Being responsible for processing the data at a component level and translating to service level data

• Processing data on KPIs such as performance measures • Analysing processed data for accuracy

Continual Service Improvement (CSI)

Continual Service Improvement also includes several pages on capacity management divided into the following:

• Capacity management (sec. 5.8.2) • Business capacity management (sec. 5.8.3) • Service capacity management (sec. 5.8.4) • Component capacity management (sec. 5.8.5)

• Workload management and demand management (sec. 5.8.6) • Iterative activities of capacity management (sec. 5.8.7):

• Trend analysis • Modelling • Analytical modelling • Simulation modelling • Baseline models

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Criticisms of ITIL

ITIL Version 3 and its closely associated 2011 update is a strong foundation for establishing service management within an organisation, using a common glossary and process structure, with its associated benefits. However, we believe that there are still some shortcomings from a performance and capacity perspective.

Although there is considerable material on the day-to-day (reactive, tactical or operational) capacity management activities and some good coverage on the long-term (proactive, strategic or capacity planning) activities there is a large gap on performance related activities, such as performance testing and end-to-end service performance measurement. This should be covered better in Service Validation and Testing (within Service Transition) and Event Management (within Service Operation). This is the greatest technical shortcoming of ITIL with respect to capacity and performance currently.

Another area that capacity management frequently is involved in within a service management organisation is financial management. This is because an effective capacity management function generating accurate capacity plans can use those to derive budget forecasts. This is the greatest business shortcoming of ITIL with respect to capacity and performance currently. Ideally all of the demand management, capacity management and service validation processes should reside within the control of one central performance and capacity team.

Conclusions

ITIL Version 3 has been updated in 2011 to resolve errors and inconsistencies, with some useful changes (mainly within Service Strategy).

ITIL is a powerful framework for building a comprehensive and cohesive service management organisation. While we, as subject matter experts in the performance and capacity management arena, are bound to find some shortcomings with its capacity management coverage, it does offer considerable value to its users. As ITIL continually improves with its iterative update process it is up to us experts within the industry to influence its development.

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Questions & Answers

[email protected]

www.Capacitas.co.uk

Provider

Entrance Criteria Input Suppliers

Service Strategy – Demand Management

• Business customers

• Business relationship mgmt • Service portfolio manager

• Service initiatives • Customer & service portfolios • Charging models • SIP opportunities

• Service Level Objectives

Exit Criteria Output Customers

• Capacity management • Business relationship mgmt • Service level management • Availability management

• User profiles • Patterns of business activity • Demand management policies • Demand exception policies

• Analysed PBAs • Analysed user profiles • Appropriate service designs • Capacity management interface • Demand exception processes Standards

Triggers Work Procedures

COMPARE COMPARE

REJECT REWORK

• Service request from customer • Utilisation rates causing SLA breaches

• Exception to forecast PBA

• Service Level Agreements • Service portfolio