Tuesday, 10 September 2013

What is Demand Management?

 What is Demand Management?    

Some companies got into trouble when managing their business technology because they put too much emphasis on the supply side of their equation and forgot about their demand side. In any business operation including the IT sector, balancing the supply and demand of the products and services is paramount.


In the past companies would initially invest heavily in huge data centers and IT infrastructure. They were focusing on supply. This lead to a lot of wasted resources because the company never even got close to reaching the capacity of their IT infrastructure. Just recently, companies are realizing they should start thinking about IT demand management. The idea is that you try to forecast the demand for IT personnel, equipment, and services and then you try to spend just enough money to hit that demand. Instead of huge upfront costs, the idea is to be more flexible and save money.

To have good planning and production services for the business, it is necessary to balance the demand side of operations. This usually involves balancing the orders of the products and services and the supply side that deals with the ability of the company to produce their products and services depending on the resources they have available at hand. If these are not properly balanced, then you either have underproduction or overproduction (neither one is good). This same logic can be applied to the IT sector (although it never was until recently).

Usually, when it comes to supply and demand thinking, the IT sector focuses more on the supply side that includes software management and physical components management while diminishing their focus on the demand side that includes important tasks such as appropriating the resources accurately for the business projects and making projects that can bring benefits to the company. Focusing on supply led to building the wrong systems that customers didn't really want.

For any business that aims to have an effective business operation, it is important that it has a well-balanced IT demand management that focuses on the demand for a company's technological resources. This will involve determining the needs of the customers before any IT project will be produced. Knowing what customers want will lead to IT resources being well allocated and in return reduce unnecessary technology costs for the business.


Author: Jason Robison
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