IVI Framework Viewer

The Demand and Supply Management (DSM) capability aims to balance the business demand for IT services and the supply of those services.

• Strive for equilibrium between the demand for and the supply capacity of IT services.
• Arrive at an understanding of the total or aggregate demand for IT services, and meet this with a supply capacity that is fit for purpose and cost-effective.
• Forecast the impact of demand for IT services on the scalability of the supply pipeline.
• Maintain a balanced IT services portfolio so that current requirements for IT can be managed, and expected future requirements can be provided for.
• Understand how emerging technologies can replace or substitute current technologies, and open up new supply options.

The Demand and Supply Management (DSM) capability can improve the business value that IT services deliver by reducing or eliminating supply surpluses and missed fulfilment opportunities.

In today's business landscape, organizations need to be increasingly dynamic and responsive to fluctuating customer demand for IT products and services. Peak demands can be triggered by a combination of predictable and unpredictable factors, including advertising, social media, competitor moves, industry regulation, weather, natural events, and even market rumours. To thrive in turbulent business environments, organizations need to focus on meeting shifting demand with agile approaches to ensuring supply.

By developing an effective Demand and Supply Management (DSM) capability, an organization can support and enable business services while keeping costs as low as possible across different demand and supply scenarios. Organizations that consistently balance demand and supply can do so because they are either able to anticipate and address small- scale imbalances before they become larger problems, or because they are capable of responding very quickly, after the fact, when inevitable spikes or dips in demand or supply occur.

The Demand and Supply Management (DSM) capability is the ability to manage the IT services portfolio in such a way that there is a balance between the demand for and the supply of IT services. The Demand and Supply Management (DSM) capability covers:

• Analysing and managing the existing and future business demand for IT services.
• Analysing and managing the existing and future supply of IT services.
• Proposing responses to address gaps between the demand for and supply of IT services, for both the short term and the long term.
• Fostering collaboration between IT and other business units to manage the IT services portfolio.
• Understanding trade-offs between satisfying demand and the cost of supply — for example, by using emerging technologies or by changing the nature of the demand.

Representative POMs are described for DSM at each level of maturity.

2Basic

• Practice

  Maintain information on business consumption levels for a subset of key IT services.

  Outcome

  Information helps make the case for resource assignment and validates the relevance of current IT services.

  Metric

  Number and percentage of IT services analysed within the IT services catalogue.

• Practice

  Develop a methodology for consistently conducting evaluations of existing and emerging technologies on a scheduled basis.

  Outcome

  Technologies are evaluated periodically with a view to building a case for introducing, retaining, upgrading, or replacing them.

  Metric

  Number of technology evaluations per annum.

• Practice

  Create a formal documented record of the IT services portfolio.

  Outcome

  A formal documented record represents the menu of available IT services, and facilitates planning discussions on how best to manage business demand for IT services.

  Metric

  Frequency of reviews and updates to the IT services portfolio record.

3Intermediate

• Practice

  Document the gaps between current demand for and supply of existing IT services, and how these could be addressed with new or emerging technologies.

  Outcome

  A robust business case can be made for investment in appropriate technologies.

  Metric

  Percentage of identified gaps in demand–supply where new or emerging technologies have the potential to deliver positive return on investment (ROI).

• Practice

  Activate a formal process of dialogue between IT and the other business units to develop a shared understanding of business demand.

  Outcome

  Business requirements can be centrally documented and catalogued, enabling more holistic discussions regarding how to satisfy business demand.

  Metric

  Number of business requirements that are centrally documented.

• Practice

  Engage key stakeholders across IT and some other business units to discuss the balance of supply and demand across the IT services portfolio.

  Outcome

  The IT services portfolio is periodically reviewed and where necessary realigned to meet business demand.

  Metric

  Percentage of IT services reviewed per annum to assess their alignment with business demand.

4Advanced

• Practice

  Institute an organization-wide policy to moderate the demand for IT services, without negatively impacting business productivity.

  Outcome

  Gaps between demand and supply are smaller, and faster re-alignment with respect to demand-supply variances is possible.

  Metric

  Average time taken to address demand–supply variances for IT services.

• Practice

  Conduct discussions between the IT function and the rest of the business regarding fluctuations and variations in business demand for IT services.

  Outcome

  There is greater organization-wide understanding of business demand fluctuations, their underlying drivers, and how necessary supply adjustments can be proactively planned.

  Metric

  Percentage of business demand opportunities fulfilled.

• Practices

  • Collate information from various sources on current and future supply capacities to support IT services.
  • Monitor industry trends and innovate accordingly.

  Outcome

  There is a coherent picture of current and future supply capacity, and this forms the basis for discussion between the IT function and the rest of the business, and between the IT function and external suppliers.

  Metric

  Percentage of IT services whose supply capacities are known and documented.

• Practice

  Make sure that proactive and structured communication takes place with all relevant stakeholders, and that this is an integral part of service portfolio management.

  Outcome

  Stakeholders collaborate in keeping the IT services portfolio up to date, and are in turn kept up to date regarding planned operational peaks and troughs, as well as planned events — and this helps prevent shortages or service outages.

  Metric

  Frequency of communication with stakeholders relating to the IT services portfolio.

5Optimized

• Practice

  Regularly review and optimize strategies for collecting and processing information relating to business demand for IT services, and for translating such information into defined IT requirements.

  Outcome

  Knowledge about business demand for IT services is continually kept up to date, thereby reducing the possibility of unexpected demand spikes or falls.

  Metric

  Number of updates to the services portfolio per annum.

• Practice

  Review strategies for investment in emerging and existing technologies on a regular basis.

  Outcome

  IT can better meet business needs using an appropriate blend of technologies.

  Metric

  Percentage of business customers who are satisfied that they are being offered appropriate technologies and services.

• Practice

  Continually review and optimize strategies for collecting and processing information on supply capacities.

  Outcome

  Information on supply capacities is optimized to ensure that appropriate solutions can be offered in a timely manner to meet demand for IT services.

  Metric

  Number of updates to the IT services portfolio per annum to meet demands for IT services.

• Practice

  Integrate IT services portfolio management as a key element of organizational strategy planning.

  Outcome

  The IT services portfolio is continually optimized to balance supply with demand.

  Metric

  Number of supply–demand mismatches for key IT services.

This capability was introduced in Revision 16 as a new critical capability.

It was deprecated in Revision 19.01, being updated by Demand and Supply Management (19.01).

The following CCs cover topics that are related to DSM in some way:

BPBusiness Planning

Information on planned initiatives to satisfy business demand for IT services

CFPCapacity Forecasting and Planning

Scenario modelling regarding availability of IT resources to satisfy potential demand patterns

EAMEnterprise Architecture Management

Plans for architecture consolidation, alignment, and reuse

IMInnovation Management

Promotion of innovation campaigns to find better alternatives over existing technologies to address supply and demand issues

RDEResearch, Development and Engineering

Information about new technological offerings

REMRelationship Management

Enhancing relationships between the IT function and other business units

REMRelationship Management

Information on business demand that is gathered during interaction with the other business units

SPStrategic Planning

Insights into drivers of business demand for IT services

SRCSourcing

Sourcing and contracting of IT services and processes

SRPService Provisioning

Information on service introduction and decommissioning, and respective costs

SRPService Provisioning

Managing service introduction, service performance, and service decommissioning

SUMSupplier Management

Measuring the performance of suppliers and operational supplier management

TCOTotal Cost of Ownership

Calculating the direct and indirect costs associated with IT services and assets