Demand Management

First up in this corner office series is the subject of demand management. Or lack of it. Demand management defined means we are meeting customer needs consistently, meeting expectations on a regular basis. It doesn’t mean we drop everything to address an urgent priority in our partners mind every time we are asked. Maybe if is both urgent and important. Maybe. But consider that high performance organizations usually spend less than 10% of their time on urgent and unplanned work.  This has been proven to be the single characteristic (metric) that can be used to indicate extremely high levels of operational excellence, compliance, security, and good working relationships with business partners. High performance organizations:

Build and complete new projects for the business
The ideal organization is completing projects on time, with reliable quality, and delivering needed capabilities to the business. These projects are planned work, and anything that detracts from completing it is unplanned work. If developers spend more than 10% of their time on emergency break/fix issues escalated from operations, project commitments suffer, almost guaranteeing late projects.

Operate existing services and use assets effectively, efficiently, and securely
Services are performing as advertised and promised, with a reliable level of quality; customers are satisfied; controls exist so that management detects variance early and can repair it in a planned and orderly manner; and controls exist to foster a culture of compliance, helping management achieve business goals and satisfy auditors.

You have got to get this right. 

Here is a quick way to understand where you are and what kind of actions you can take to begin managing this key discipline to lead a high performance organization.

First, get a handle on the true capacity constraints you are managing to. Calculate the entire man-hours resource pool required and available and then multiply this amount by 80%. This is an effective planned capacity. Group the work characteristics so that Maintenance and Production Support is clearly identified and separated from development and project related activity. Leaving 10%-12% means professional staff can be developed, trained, and use a manageable amount of free time to actually research tools and methods to offset the times when a true emergency occurs and then can be expected to work at 100% or above levels.  The other 8% – 10% should be reserved for unplanned, unforeseen activity.  Develop a true plan of record to uncover any gaps from what is planned and the capacity constraints you have identified. Use this plan to prioritize with the business so that the important and urgent work still gets done and shortfalls (expectations) can be managed.  This will be required anyway to demonstrate need if additional headcount is needed.

Second, evaluate your Plan of Record (it does exist right?) and make sure you share this often within the organization to guide planning efforts or help resolve prioritization issues.  Conflicting demands are addressed on a reactive basis so try to mitigate confusion and ambiguity introduced through shifting priorities, assignments, and resource allocations that can create a significant amount of unplanned activity. Make sure Create/Build and Operate/Maintain missions are clear and unambiguous among the professional staff tasked with providing both roles concurrently. Ruthlessly pursue this clarity of mission. Not doing so will introduce a significant amount of rework and waste. Watch carefully for symptoms and extraordinary amounts of non-value added essential activity (e.g. meeting after meeting with all-hands for example) to overcome the poor communication a good plan of record will overcome.

Third, ensure adequate resources have been identified and allocated to the scheduled tasks at the right time. Sounds simple, but in many cases I have witnessed first hand the same resources committed two and three times over which is a direct result of poor coordination and communications. Use the Project Management Office (PMO – you have one right?) to examine project plans to make sure they are not populated with UNAMED RESOURCES or roles without an association to an actual resource. TBD is not good enough here. If uncovered in your work plans, this will only lead to further ambiguity and confusion over committed resources. And there will be hell to pay when it comes time to deliver real work.

Fourth, make sure there is evidence of resource pooling or sharing concepts in use. If not, there may be a lack of skill and experience with program management in general or some fundamental misunderstanding of basic IT management concepts. A good place to start is in production support activities.  If there is one resource allocated and no back up or cross-training occurring you are in trouble. Get your resume up to date and hope for the best.

Last, and most important – have your PMO regularly report to you the ratio of unplanned to planned activity. If they can’t do this, ask why. There may be a skills or competency issue. There may be a capacity or set of processes that are broken. This may be your best shot at managing demand, judging capacity, and understanding how well your organization is managing to objectives. This is an essential make or break early-warning metric to quickly realize when your organization’s ability to respond to and overcome demand management challenges needs attention.

There is much more to this subject, intend to explore some real world examples in the coming weeks. I welcome your thoughts and comments on this important management challenge.

  1. February 16, 2009 at 2:43 pm

    Hi James,

    This is an excellent article and a unique topic. I am interested in republishing it on PM Hut. Please contact me through the “Contact Us” form on the PM Hut site in case you’re OK with this.


  2. Dave Foster
    February 18, 2009 at 2:00 pm

    As usual these steps seem to fall under the “People, Process, then Technology” focus that some organizations tend to forget. In relation to IT, couldn’t many of these issues be solved by some sort of service management – ITIL is a great example, albeit extensive – just starting small/piecemeal would start most companies down the right path – you don’t have to boil the ocean, but you do have to have the right people involved and you have to have defined processes, which have to be measureable. In the end this help organizations prioritize what’s important and what’s urgent.

  3. Laur,
    March 19, 2009 at 3:18 pm

    Excellent article! As IT is now focusing more on the business needs and bringing change management into the mix, this type of planning is more important than ever. Especially when, in many instances, it is assumed that change management is only about communication and training. When a project team is charged with understanding the human element at the end of the computer that ultimately is your success factor, it brings a need (that is not well understood) for additional resources to make sure that project management and change management are working together efficiently.

  4. Carlos Ortega
    March 28, 2012 at 7:45 pm

    Hy Mark.
    Excellent article.
    I was wondering if you can give some hint and/or suggestions on how can I go more deeply into this theme?
    Specifically I would appreciate any bibliography and/or references for Demand Management Methodologies or Methods.

    Thanks in advance.

  1. March 3, 2009 at 3:45 pm
  2. March 7, 2009 at 8:58 pm

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