Business Capacity Management Seminar
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1 Part 1 What is Business Capacity? Agenda Introduction to section The IT Infrastructure Library Why ITIL is wrong on Business Capacity (BCM) What Business Capacity should be Relationship between the layers Typical Metrics Questions the Business wants answered Answering questions the Business asks The Representative Virtual User Improving the Virtual User Concept The Challenges of Business Capacity Examples of Business Capacity 1-2
2 Introduction Business Capacity (BCM) highlighted in the IT Infrastructure Library s Service Delivery book Customers of Business Capacity include Marketing, Sales, Product Development, Finance Officers, Area Managers, etc. Business Capacity is generally recognised as a difficult aspect of Capacity 1-3 IT Infrastructure Library Capacity Business Capacity (BCM) Service Capacity (BCM) Resource Capacity (BCM) Iterative Activities Demand Modelling Application Sizing Storage of Capacity Data Production of the Capacity Plan CDB Figure Crown Copyright 2001 Covering all aspects of BCM, SCM and RCM 1-4
3 The IT Infrastructure Library Business Capacity is highlighted in the IT Infrastructure Library s Service Delivery book: A prime objective of the Business Capacity subprocess is to ensure that the future business requirements for IT Services are considered and understood, and that sufficient Capacity to support the services is planned and implemented in an appropriate timescale This is an apt description of Business Capacity. However ITIL then goes on to describe an aspect of Service Capacity, covering Capacity of a Service prior to acceptance and live implementation 1-5 ITIL Business Capacity Agree Budget Figure Crown Copyright 2001 Identify and agree SLRs Design procure amend configuration Negotiation and verify SLA Sign SLA Update CMDB / CBD Resolve Capacity related Incidents & Problems New requirements Implement under Change Operational system complies with SLA 1-6
4 Why ITIL is wrong on BCM ITIL appears to be at a loss, or at least confused, as to what Business Capacity (BCM) is It appears to replicate details about Service Level Requirements (SLRs) and Service Level Agreements (SLAs) that are already within Service Capacity (SCM) We believe these service-focussed activities should remain wholly within SCM Business Capacity should be about planning at the business level, driven by Business Volume Indicators, rather than at any service or resource level This will be covered in more detail later on in this seminar 1-7 What BCM should be IT Capacity for the Business : Should use terminology and metrics that the business use Should be able to translate seamlessly between Business metrics, Service metrics and Resource metrics Should be able to provide the answers to what-if scenarios promptly Should assist the business with long-term forecasting where required 1-8
5 Relationship between the layers Starting at the bottom of the ITIL stack: Resources are individual resources on an ICT platform that are available for use by internal and external ICT services Resources can be dedicated or shared between different services Resources are often the easiest type to measure with operating system level monitors provided as standard Services are discrete identifiable ICT services that utilise Resources on dedicated or shared platforms Services are often more difficult to measure as applications are rarely written to collect end-to-end service data 1-9 Mapping the relationship between Service & Resource Wintel Wide Area Network Web Application Mainframe Service A Service B Service C Service D Service E 1-10
6 Mapping the relationship between Business & Service Customer A Service % J 50 K 30 L 20 Customer B Service % J 75 K 25 L 0 Customer % Customer % Service J A 40 Service K A 55 Service L B 60 B 45 Customer % A B Mapping the relationship between all the layers Customer A Customer B Customer C Service J Service K Service L Service M Platform X Platform Y Platform Z 1-12
7 Typical Resource Metrics Measures: CPU utilisation, queue lengths, etc. Memory utilisation, page faults, etc. Disk utilisation, write and read queue lengths, etc. Network interface utilisation, dropped packets, etc. Configuration: Number of CPUs, model, type, speed, caches, etc. Type of memory, amount installed, speed of memory, etc. Type of disk interface, number of disks, rotational speed, bus width, cache, RAID, etc. Network protocol, speed, buffer sizes, congestion algorithms, etc Typical Service Metrics Measures: Transaction throughput End-to-end response time Service Level requirements Service Level Agreement penalties Configuration: Name of service Architecture and design Resources used Resilience 1-14
8 Typical Business Metrics Measures: Number of customers Funds under management ( Bn) Average Revenue per Unit (ARPU) Number of users Configuration: Customer profiles (services signed up to) Billing scheme (e.g. telephony) 1-15 Questions the Business wants answered Typically the Business expect the ICT department to answer the following types of questions promptly and, ideally, accurately, providing costs, time-to-market, scalability and throughput: What if I increase our number of customers by 5% per annum? What if I discontinue a particular product? What if I merge two particular products? What if I increase cheque charges by 25%? What if I extend branch opening hours until 10PM What if I open branches on Saturday, or even on Sunday? What if I increase the number of products by 25%? What if we merge with company XYZ? 1-16
9 Answering questions the Business asks Business client 1 12 Make decision 11 Business Capacity Service 3 Capacity Business to Service Model 7 6 Service to Resource Model Resource Capacity 4 Report 8 Capacity Database (CDB) The Representative Virtual User To understand the relationship between a business metric and the subsequent service and resource metrics an interpretation is needed of what that business metric means For example the number of customers is a commonly used business metric For this to be any use to a capacity planner they must analyse and identify what this represents Typically some form of workload characterisation must take place in order to decompose demand into a basket of services utilised per user 1-18
10 Improving the Virtual User concept Using a representative virtual user can be very helpful in many circumstances However it does amalgamate all user characteristics into one pseudo-user; sometimes a greater degree of differentiation is required It is often worthwhile to create a number of different virtual users based on differing customer segmentation This enables more sensitivity analysis when answering Business scenarios Using marketing s classification for customers can often also help align with the business talking the same language; it also gives access to useful usage volume and forecast data for each category 1-19 Improving the Virtual User concept 20% Customer A Service % J 50 K 30 L 20 Customer B Service % J 75 K 25 L 0 Customer % Customer % Service J A 40 Service K A 55 Service L B 60 B 45 Customer % A B % 11% 20% 1-20
11 The Challenges of BCM Typical challenges of successful Business Capacity : Understanding the relationships between Business, Service and Resource Measuring and modelling the environment Defining and implementing the processes Organisational resistance and lethargy Detecting changes in user workloads Obtaining the forecast data 1-21 Examples of BCM Metrics Telecommunications Provider: Number of subscribers Customer churn ARPU Billing strategy & packages Population densities Take up rate of new services Portal: Number of searches & search strategy Number of subscribers News & ticker services Alliances / cross-selling New products Insurance Company: Number of customers Products Price sensitivity Market segmentation targeting 1-22
12 Summary Business Capacity is the activity of a capacity management function in analysing business requirements on the ICT infrastructure and providing results based on these requirements For Business Capacity to be effective it must be ideally be undertaken in conjunction with the marketing department More granularity in the business data enables better analysis It is a non-trivial exercise but can demonstrably provide value to the business 1-23
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