Capacity management is (or at least should be) a core strategic process of your IT service management (ITSM) practice – as understanding the capacity of each IT service, and the factors affecting capacity of services, is a key element of building appropriate and impactful service level agreements (SLAs). And, in turn, this level of capacity should represent the business essentials that organizations need to achieve.

Most organizations have some form of capacity planning and management in place today, but many haven’t advanced the practice beyond the basic data-gathering and the reactionary steps necessary to simply “keep the lights on.” And while this approach can help ensure the perception of “smooth operations,” some questions remain, like does it:

• Provide the details the business needs to grow?
• Position the IT team to think about the future the business wants to achieve?
• Consider the available new technologies or the possible retirement of antiquated services?

Maybe a better question is “How many continuous improvements have capacity planners initiated and/or implemented in the last year?”

Capacity Management and Improvement

With the arrival of managed services and readily-available cloud services, many in IT believe capacity planning doesn’t need to extend beyond a reactive nature. But as any savvy ITSM practitioner hopefully knows, maintaining a reactive posture is a potential “death sentence” to service operations and customer satisfaction.

Just like all ITSM processes, the capacity management processes should always be improving (via the continual service improvement (CSI) process). However, it can be difficult to convince colleagues that the steps they have been using, sometimes for years, are now insufficient to manage capacity for modern IT operations.

Where to Start with Capacity Planning Improvement

As IT team members often do, bringing up an improvement discussion will generate a list of “quick fixes” for capacity. Some of these ideas will have good value, some will only address symptoms of bigger issues, and some will simply lead to the continuation of the status quo.

And it’s important not to jump into the improvement discussion without appropriate data and knowledge. So, I suggest you set up the improvement discussion by doing the following:

• Document the current state.
  If you have a documented capacity process and plan, you are well ahead of the game. Most organizations have not done this simple step and make capacity decisions based on tribal knowledge. As with any process, documenting the current practice is a good starting point. It’s also importing to have a common understanding and agreement among the decision makers on how capacity is measured, monitored, and planned. By having such a common understanding, the decision makers can help provide focus on the improvement activities the capacity planners should undertake.
• Review the current metrics.
  As part of the documentation process, gather the metrics that are used to determine the level of capacity available and the threshold levels. Do not worry if metrics don’t exist, but please – simply document that fact. As you review the metrics, look for examples indicating threshold breaches or near misses and capacity that far exceeds actual usage. Also gather information on any tools used to measure capacity. These may include monitoring tools, component-specific tools, and vendor reports.
• Watch out for trending incident, requests, and problems.
  Take the time to go through your operational records to see how many incidents are a result of capacity breaches. Document the number of requests the business has made to change capacity. Be aware that this may include the decommission of compute components requested by the business. Finally, go through problem data to see how many problems arose due to capacity issues.
• Form a capacity management community of practice.
  A community of practice (CoP) is simply a group of knowledge workers that focus on a specific area/process. In this instance, the CoP should be made up of all the areas/units of the IT team that may impact the capacity process. The CoP should be the team to draft and manage the capacity process and capacity plan. Forming this group early, and providing them with training, will help solidify the capacity practice in the business.

What Are the Next Steps?

The CoP will need to be guided towards maturing the capacity process. A good discussion starting point (for the CoP) is to assess the current capacity practice by using the maturity matrix that best fits your organization.

Determining the maturing level is also another tactic in developing a common understanding of where the IT team really is in its capacity capabilities. Once the CoP gains the common understanding, the next steps are:

• Promote development of a capacity process.
  The CoP should be the catalyst in building a capacity process that meets IT service objectives. The CoP should determine the appropriate approach/framework to use (such as ITIL best practice), the objectives of the capacity process (e.g. contributing to meeting service levels by managing the capacity and performance of services and resources), which capacity items to monitor and measure, and the roles and responsibilities for capacity management. Ensure that the team meets all the necessary requirements to fulfill your service objectives as well as ensuring that the process follows appropriate governance, approval, and knowledge management practices.
• Develop a capacity plan.
  Once the process is developed, the CoP should get to work on documenting the capacity plan, which should be the operating document for the CoP to measure against. The capacity plan will be a living document that flexes and changes with needs of the business (and you can read more about capacity planning in the cloud here). How the plan is designed and what it contains is up to the CoP to determine. As a minimum, the plan should reference:
  • Business changes, plans, or projects that may impact capacity
  • Current capacity levels and thresholds for each service
  • Financial, human resource, and compute capacity
  • Regulatory or statutory changes that may impact capacity
  • Contractual capacity commitments
  • Any new technologies that may change service capacity
• Execute the capacity plan. The CoP, process owner, and service owner need to work with IT units to execute the capacity plan. The CoP should note any deviation in the process and document continual improvement opportunities.
• Hold formal capacity plan reviews and update the plan. The CoP, as part of the capacity process, should establish a regular capacity review meeting. The review should examine the capacity plan against the capacity measures to ensure IT is meeting the capacity and business requirements. If not, the CoP should adjust the plan to meet the goals. The review meeting should also check all parts of the plan to see if any adjustments are needed.
• Provide reports. After the capacity review meeting, the CoP should issue a report to top management on IT capacity status and recommend changes as necessary. The report should be stored as part of the capacity record and the CoP should review the previous report as part of the next capacity review meeting.

Importantly, capacity management and planning should not be an afterthought – it should be part of your normal strategic planning process and help you to ensure that promised service levels are met. And, while it’s not glamorous, it is necessary to build strong warranty and utility in your service offerings. Remember, that although it can be a tough journey, maturing your capacity practice is an important step in building a quality service management program.