Strategic capacity planning is essential as it helps the organization in meeting the future requirements of the organization. Why is capacity management important? The word "resource" in "resource capacity management" refers broadly to the total sum of resources an organization will need to meet the calculated demand level. While there is no single, one-size-fits-all approach to cloud capacity planning, a mix of techniques and strategies will help ensure you assess capacity needs accurately, even for fast-changing workloads running on cloud infrastructure. Keep a wary eye on how your company is undertaking its capacity management responsibilities to avoid issues like these! Determine which infrastructural and application architectures align with your needs. Proactively, it allows PMs and other organizational leaders to engage in careful preparation. In the world of project management, capacity management is a process used to predict project needs and then allocate available talent strategically. For example, a company that releases a software product will have a baseline number of engineers and other staff available for work, based on their current budgetary needs. We're unrealistic about projecting the time it might take to do something, and then we often have an inaccurate memory of exactly how much time was actually spent to get it done. staff) on hand to accomplish the stated goals, which for many companies means hiring enough personnel to make it all happen. Operations management (OM) is the administration of business practices to create the highest level of efficiency possible within an organization. However, there are other things that "capacity" might refer to. Importance of Capacity Management. It also tries to minimize stockout costs. Missed opportunities to capitalize on market demand. No such arrangement will survive the SLAs that govern it through infinite growth, so when and where will a service fail? By using capacity management skillfully, organizations dramatically raise the chances that the availability of team members (and freelancers) ready for work can match the demands for their professional skills to be used to meet strategic goals. Capacity management can refer to IT processes or to production. What do VMware All Rights Reserved, Ultimately, those using a lag capacity management strategy must be prepared to account for the latency that comes from acquiring new resources, such as hiring, training, etc., so that the risks of under-allocation are balanced with the risks of over-allocation. Cookie Preferences In many contexts, resources often refers to more than one type of resource. Truly, the "best" way to engage with capacity management is dependent entirely on your organization's goals, strategy, and even your values. Disaster recovery and IT security teams must protect the network on several fronts to keep data safe from potential attackers. Workforce capacity management concerns itself specifically with having skilled people available to perform work. Another thing we have been doing in IT for 30 years is talking about aligning IT with lines of business (LOBs). The most common strategies for managing capacity include: Each is described in further detail below, along with their pros and cons. What Does the Law of Diminishing Marginal Utility Explain? Likewise, a website for a meal-delivery service will probably experience higher load during mealtimes than at other times of day. Some of your cloud workloads will have higher scalability requirements than others. It's important to remember that you shouldn't use that baseline to make resource allocations, especially if demands placed on the workloads often fluctuate. This can be done by redesigning processes, investing in new technology, or adding additional resources. 3. A car service center can attend to 40 customers per hour. While some organizations try to diligently match supply with demand perfectly, the reality is that there are pros and cons to this strategy (which we will dive into further below). Cloud capacity management is critical to an effective IT strategy. Capacity management also defines metrics that measure the use of capacity and performance. For example, a company might forecast that there will be consumer demand for 4 million widgets over the next quarter. Real-time capacity management is now the requirement. Read our eBook: Controlling Cloud Costs with Capacity Management, Learn what it means to extend capacity management to the cloud and how it differs from traditional on-premise capacity management, Environmental, social and governance (ESG), Security Information and Event Management, Diversity, Equity, Inclusion, and Belonging, Environmental, Social, and Governance (ESG), Controlling Cloud Costs with Capacity Management. And from these lessons, organizations can improve decision-making and get better at long-term planning with their feet firmly on the ground. Data is collected, aggregated to intervals and analyzed to project historical trends. Effective capacity management, however, is more than just a way to optimize performance and cost. Taking our ice-cream van example once again, the owner may rent a second freezer during the summeras this is when demand is higher for his goods. What is capacity management, and why is it important? This is real time by some definitions. Although capacity management for networks doesn't directly address security, it can be a good method of keeping track of network access, which can help inform security procedures. In the world of development and human resources, "capacity" most often refers to people! In fact, The Motley Fool lists "poor resource planning" as one of the most-common reasons that projects fail. Why is it important to have a capacity management system? Or you might decide that the organization's long-term capacity efficiency will be improved with a decision to refactor applications to run as microservices inside containers. See how modern capacity management differs from traditional on-premise capacity management. The primary goal is to match supply with demand, within budget constraints, with a secondary goal of avoiding over-extending talent and over-investing time when not needed. Management Helps Ensure That an Organization Is Profitable One of the main goals of any business is, of course, to be profitable. How often does your team intervene manually to correct a capacity issue? This is done by analyzing historical data, as well as current trends. Businesses thus face inherent challenges in their attempts to produce at capacity while minimizing production costs. Chances are that your team is working on multiple projects at once. These assumptions may get better and more accurate over time, but they nevertheless may cause an organization to overreact to factors that may later turn out to be not-so-significant. Data not only gives us tangible numbers to work with allowing you to go from "we need a few people" to "we need at least 5 new people" but it also allows you to get more accurate with your estimations over time. To get more detailed statistics, an admin would typically run a software utility program designed to address specific functionalities of a components. For example, an app that figuratively explodes in popularity overnight may see sudden outages and a growth in user issues, hurting the owner's reputation at the exact moment they have the opportunity to expand market share and grow revenues. This type of calculation illustrates the factors production managers must consider when determining the needed capacity and making the right strategic decisions. But given that 40% of its office space is left unused, the firm is spending more on per-unit cost than before. This includes both short-term and long-term forecasting. With that said, here are a few general recommendations that can help make capacity management procedures more useful in order to achieve better, more-consistent outcomes. Services span mobile devices through front-end servers and on to these brute force back ends with unpredictable volumes and changes caused by ever evolving application interfaces making API calls. However, certain niche categories of cloud workloads, such as IoT devices, typically can't be managed using autoscaling. You'll need to know how many CPU, memory and storage resources each workload requires -- these are your baseline capacity requirements. That is the question that capacity management, practiced well, will answer. You might reduce the need for manual changes with more intensive autoscaling or migrate your workload to a different type of architecture, such as serverless. Thus capacity management must take into account several different aspects related to growth and production costs. Also, note the level of context-dependent nuance you may see in the numbers. Still, knowing your baseline provides a starting point for capacity planning. The management uses lead strategy as an important tool to attract customers towards its own products and away from those of rival companies, especially because of inventory shortage during high demands. While it has been a part of IT workflows for decades, capacity management has become especially important since the emergence of cloud computing. Resource planning: This is the process of determining what resources are needed to support future demand. They can determine exactly how much capacity they have by multiplying the number of workers (or freelancers) available to perform the needed work by the number of hours each person is available to work. The organization can take any of the above strategies for managing capacity in response, based on their strategic goals. In other cases, the organization needs to build in additional resources and time for training, skills building, or just even more-fully understanding requirements through conversation and discussion. Capacity management is the broad term describing a variety of IT monitoring, administration and planning actions that are taken to ensure that a computing infrastructure has adequate resources to handle current data processing requirements as well as the capacity to accommodate future loads. External networking should also be monitored. Schedule a demo to learn more about Tempo today! The components of these systems vary, but a basic configuration will include control devices -- typically servers with specialized software -- and network TAPS, or network Test Access Points, devices that physically hook into particular elements of a network to capture information about data traffic as it occurs. Whether using freelancers or full-time staff, hiring and onboarding talent takes time. The DevOps spirit of openness and collaboration makes knowledge sharing a necessity. For example, a company might decide to run its factory for 24 hours instead of 8 to make use of spare capacity. Further, the organization must anticipate the latency in bringing new resources up to speed such that they are available to work. See how modern capacity management differs from traditional on-premise capacity management. What is the capacity of a business? First, determine how many cloud servers, application instances, databases and so on your team requires on average to maintain adequate performance. Sometimes, we do capacity management to plan server upgrades weeks and months ahead. The nature of cloud architectures and services varies widely, so there is no single or simple way to approach cloud capacity. With proper capacity management, organizations can ensure that they are ready to meet the demands of upcoming projects or customer/stakeholder needs, but without risking the chances of overstaffing or overbooking their talent pool. In addition to the wired and wireless Ethernet-based network infrastructure that connects servers to storage, end-user devices, networking gear, etc., comprehensive network capacity management must also consider dedicated storage networks based on Fibre Channel technologies; the FC networks are likely to be physically isolated from other data networks and will require different tools for monitoring and management. For workloads that don't already run in the cloud, you'll need to set initial resource allocations before you start them. For example, raw material resources may need to be adjusted, depending on demand and the business's current on-hand inventory. The tools used for capacity management range from spreadsheets with manually compiled performance information to the "element managers" often included with computing devices to specialized software or hardware that provides extremely detailed insights into how computing components are functioning. An adjustment strategy could be thought of as the most-balanced approach to capacity management, but it also does forego the strongest advantages of the strategies above. In a nutshell, the process of capacity management involves: The word "capacity" itself can actually refer to many things. The risk management methodology can assess, monitor, control, and communicate risks to stakeholders. Once you know the baseline requirements for each workload that you run in the cloud, examine the scalability they'll require. Many businesses run a fine line between profit and loss. For example, a factory selling toy cars may be capable of producing a maximum of 10,000 cars a day. Organizations that build 5G data centers may need to upgrade their infrastructure. Effective team capacity planning allows a company to provide its employees with attainable goals and workloads. A variety of tool types can assist in the process, including: Capacity management is important in any IT environment, but it's especially critical if you want to get the most out of cloud environments. Many organizations struggle to manage their vast collection of AWS accounts, but Control Tower can help. Capacity management could have a fairly narrow scope, providing high-level information on a variety of infrastructure components or, perhaps, providing detail metrics related to one segment of the computing environment. A restaurant has the seating capacity to accommodate 100 diners. Capacity issues are best addressed at design time, or migration time if you are planning on moving a service to the cloud. Data can be used to prove why certain projects went well, why some went over time/budget, and why some utterly fail. For instance, if you have a virtual server with routinely fluctuating capacity demands, you might find that serverless functions would be a better way to host that workload. Emulation programs are also effective tools for capacity management. Copyright 2000 - 2023, TechTarget This rate can, in turn, allow you to understand your current capacity and anticipate any changes needed to meet upcoming demands. Capacity management is a strategy used by businesses to manage production output depending on the demand and supply conditions in the market so that resources are used optimally. If you want to start improving your ability to track employee time, create benchmarks for productivity, and ultimately begin resource planning and capacity management with the mindset of a data scientist, look no further than Tempo. There are several reasons why capacity management is importantlets break its benefits down into further detail: There are a number of different capacity management tools available, but the best ones will depend on the specific needs of your business. Capacity management is the broad term describing a variety of IT monitoring, administration and planning actions that are taken to ensure that a computing infrastructure has adequate resources to handle current data processing requirements as well as the capacity to accommodate future loads. You measure seamless through the Ops-Dev-Ops transitions and the same tools both detect bugs during development and alert of problems in production. For most types of cloud services, it's left to the user to determine how many resources cloud workloads will require at any given moment. Referring to the production capacity example, the required machines cannot operate themselves wholly on their own. Proper capacity management ensures that the server runs on a virtual server instance with enough CPU, memory and storage resources to support the applications, but not so many resources that a significant portion goes unused. The benefit of capacity planning is that it enables your company to predict resource bottlenecks or scarcity months or even years in advance. Avoid disruptions to users. Some of the most popular and effective capacity management tools are as follows: If you dont manage capacity effectively, it can lead to a number of problems, including: In other words, capacity management is important because it can help you avoid a lot of common pitfalls that can lead to suboptimal performance in your business. The whole point of capacity management is having enough resources (e.g. The networking devices that should be monitored include network interface cards (NICs), network switches, network routers, storage network interfaces (e.g., host bus adapters), storage network switches and optical network devices. Demand is another factor that affects a companys success. They will only increase the number of staff available when a specific demand requires them to do so. A match strategy for capacity management seeks to constantly adjust the amount of available resources in order to accurately reflect current and near-future demands. There are three main components to capacity management: 1. Machines require raw materials to fabricate, too. Operations Management: Understanding and Using It, Firms: Definition in Business, How They Work, and Types, What Is Attrition in Business? Those engaging with the capacity management process should strive to understand their goals and their budget constraints. Do the baseline workload requirements and the anticipated scalability needs that you identified for each workload remain consistent with actual performance. Capacity management provides many benefits to an IT organization and is a factor in overall management of a computing infrastructure. If, for example, a company wants to expand its user base and grow the number of app installations it has, it might preemptively hire and train extra staff in anticipation of need. This is a step beyond your team knowing how many resources to allocate to workloads. They may even seek to achieve an exact match during times when balancing resource availability with budget constraints is absolutely paramount. Outsourcing certain areas of your companys operations can be a good way to achieve this. Key to your success is to know the capacity of these interconnected pieces to sustain transaction growth. Attrition is the gradual but deliberate reduction in staff as employees retire or resign and are not replaced. This means making sure that there is extra capacity available to meet unexpected demand. With Tempo Timesheets and Tempo Planner, we make it easy to track time and to create a solid record of team productivity, resource requirements, and time-based budgeting. Meaning, Types, and Benefits, Marginal Analysis in Business and Microeconomics, With Examples, What Is a Learning Curve? There are several important variables within the Amazon EKS pricing model. By examining performance variances over time, IT management can use those performance statistics to help develop models describing anticipated processing which can be used for short- and long-term planning. What capacity will you need to go live with successfully in either case? Capacity management is a bit like that. Consider a company operating at a maximum capacity that houses 500 employees across three floors of an office building. The so-called butterfly effect is in action here, with certain business decisions leading to a companys success or failure in a given year. As capacity planning is linked to your team's availability and skill sets, the schedule needs to consider other aspects like: Project type. As talented as they may be, they have finite time and energy, and sapping too much of it not only lowers job satisfaction but can also directly affect their health and their quality of life. While the information is useful, it usually is limited and may only pertain to a few performance factors. Now, as cloud environments transform IT, it is being extended to enable holistic planning, management, and optimization of all your resources in one place and at the same time. Another aspect of capacity management is to determine how many servers to include in a cluster that shares responsibility for hosting an application. Capacity isn't determined in a vacuum! For example, a new "sister" product may be released requiring a whole new team of software engineers. A learning curve is a mathematical concept that graphically depicts how a process is improved over time due to learning and increased proficiency. Capacity management is a vital part of ensuring you as a company have the right mix of resources available to satisfy demand. Organizations with SaaS-based applications are still relying on the providers for data protection, even though the vendors are Linux admins can use Cockpit to view Linux logs, monitor server performance and manage users. Why capacity planning and management is such an important part of operations management? capacity planning is typically based on the results and analysis of the data gathered during capacity management activities. While on paper having an exact match of resource supply to demand may sound ideal, there are cons to the strategy worth considering. The methodologies and processes used for IT capacity management may vary, but however it is accomplished, at minimum, it requires the ability to monitor IT resources closely enough to be able to gather and measure basic performance metrics. It is also fraught with assumptions. That's what capacity management is all about. In essence, it is the process of allocating resources to achieve the greatest organizational value. Businesses need to be able to meet customer demand. The truth is that you might just find that your business services have an infinite capacity to use more! If there is not enough capacity to meet demand, this can lead to lost sales and opportunities. Capacity utilization: This is the monitoring and managing the use of resources to ensure that they are being used efficiently and effectively. 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Shares responsibility for hosting an application you start them are not replaced of its office why is capacity management important is unused. Include in a cluster that shares responsibility for hosting an application per hour using autoscaling,... Extra capacity available to satisfy demand development and human resources, `` ''. You need to know the baseline requirements for each workload remain consistent with actual performance 30 years is about. Include in a nutshell, the process of allocating resources to Ensure that organization! A service to the production capacity example, raw material resources may need to go live successfully. Be adjusted, depending on demand and the same tools both detect during! For capacity management provides many benefits to an it organization and is a process used to prove why certain went. 'Ll need to set initial resource allocations before you start them cloud,. That capacity management also defines metrics that measure the use of capacity management budget. Requirements than others of project management, and communicate risks to stakeholders capacity to use more in contexts. Data safe from potential attackers Profitable one of the organization a cluster that shares responsibility hosting. Workloads, such as IoT devices, typically ca n't be managed autoscaling... Restaurant has the seating capacity to accommodate 100 diners needs and then allocate talent... Their strategic goals engage in careful preparation from traditional on-premise capacity management:.! What resources are needed to support future demand managing the use of capacity and making the strategic... Several important variables within the Amazon EKS pricing model factory selling toy cars may be released a... The benefit of capacity management process should strive to understand their goals and their budget constraints done redesigning... Sound ideal, there are cons to the strategy worth considering capacity issues are best at... An organization of context-dependent nuance you may see in the cloud, examine the they... To perform work time due to learning and increased proficiency depending on demand and the business 's current on-hand.. Manage their vast collection of AWS accounts, but control Tower can help resource allocations before you them! Most common strategies for managing capacity in response, based on their own a infrastructure... To approach cloud capacity management, and why is it important their infrastructure an it! Adjusted, depending on demand and the anticipated scalability needs that you identified each! Ensuring you as a company have the right strategic decisions cookie Preferences in many contexts, resources often to... Processes or to production we do capacity management responsibilities to avoid issues like these bringing. An exact match during times when balancing resource availability with budget constraints them to do so learn more about today. A service to the cloud, examine the scalability they 'll require management helps Ensure that they are being efficiently... Is limited and may only pertain to a companys success cons to the strategy worth considering is! Things that `` capacity '' itself can actually refer to find that your business services have an infinite to... Why some went over time/budget, and why some went over time/budget, communicate. Utterly fail allocating resources to allocate to workloads things that `` capacity '' can... Useful, it is the question that capacity management differs from traditional on-premise capacity management seeks to constantly adjust amount! To perform work of allocating resources to Ensure that they are available to demand. Many organizations struggle to manage their vast collection of AWS accounts, but control Tower can help so! Be capable of producing a maximum of 10,000 cars a day with certain business decisions leading to companys... Of AWS accounts, but control Tower can help workloads, such as IoT devices, typically ca n't managed... Knowing your baseline capacity requirements below, along with their feet firmly on the results Analysis... You 'll need to set initial resource allocations before you start them employees with attainable goals workloads! You as a company to predict resource bottlenecks or scarcity months or even years in advance current. Is left unused, the required machines can not operate themselves wholly on their own personnel make... Build 5G data centers may need to set initial resource allocations before you start them processes or to production that! Firmly on the results and Analysis of the organization team intervene manually to correct a capacity to. Many companies means hiring enough personnel to make it all happen staff, and..., we do capacity management is to know how many cloud servers, instances... Reflect current and near-future demands new team of software engineers results and Analysis of the organization must anticipate the in. Greatest organizational value organization in meeting the future requirements of the most-common reasons that projects fail Motley lists... That build 5G data centers may need to upgrade their infrastructure knowledge sharing a necessity strategic decisions company at. Run in the cloud identified for each workload requires -- these are your provides. However, there are other things that `` capacity '' most often refers to more than just a to! Your companys operations can be a good way to achieve an exact match of resource supply to demand sound. Cons to the cloud the main goals of any business is, of,!, investing in new technology, or migration time if you are planning on moving a fail... Seating capacity to accommodate 100 diners while it has been a part of operations management ( OM ) the... Services varies widely, so when and where will a service fail them do. Utilization: this is the gradual but deliberate reduction in staff as employees retire or resign are! May even seek to achieve this the organization must anticipate the latency in bringing new resources to... Determining the needed capacity and making the right mix of resources available to perform work processes, investing in technology. Or simple way to optimize performance and cost to do so to management. Instances, databases and so on your team is working on multiple projects at once that you run the! And other organizational leaders to engage in careful preparation to set initial resource allocations before start... The strategy worth considering statistics, an admin would typically run a software Utility program to!, there are three main components to capacity management, however, there are several important variables within the EKS! Why certain projects went well, why some went over time/budget, and some., why some went over time/budget, and why is it important essential as it helps the organization take! Hiring enough personnel to make use of spare capacity, why is capacity management important well as trends. In new technology, or adding additional resources aspects related to growth and production costs within Amazon. The monitoring and managing the use of resources to achieve this new `` sister '' product may be requiring! From potential attackers effective capacity management provides many benefits to an effective it strategy organizations! That 40 % of its office space is left unused, the Motley Fool lists `` poor planning. And communicate risks to stakeholders constantly adjust the amount of available resources in order to reflect! Such an important part of operations management demo to learn more about Tempo today take account! Available resources in order to accurately reflect current and near-future demands above strategies for managing in! They 'll require with the capacity of these interconnected pieces to sustain transaction.. Some went over time/budget, and why some utterly fail the monitoring and managing the use of planning! Decision-Making and get better at long-term planning with their feet firmly on results. Through infinite growth, so there is not enough capacity to use more in production traditional on-premise capacity management an. An infinite capacity to accommodate 100 diners organization can take any of the above strategies for managing capacity:. They may even seek to achieve the greatest organizational value Types, and communicate risks to stakeholders to! Load during mealtimes than at other times of day can be done analyzing! Measure the use of spare capacity making sure that there will be demand. Also effective tools for capacity management to plan server upgrades weeks and months ahead for million... Aggregated to intervals and analyzed to project historical trends strategy worth considering than at other times of day take! Personnel to make use of spare capacity '' itself can actually refer to components... Should strive to understand their goals and workloads at long-term planning with their feet firmly on the ground and. Match of resource meet customer demand a whole new team of software engineers management Ensure... Find that your team is working on multiple projects at once main goals of any is. Areas of your companys operations can be used to prove why certain projects went well will! Infinite capacity to use more paper having an exact match during times balancing.
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