Purpose of Business Relationship Management

This process has a very important part to play in the alignment of the IT service provider and the customer.

The purpose of the process is twofold:

• Establish a relationship between the service provider and the customer, and maintain it by a continued review of business and customer needs. This relationship is extremely important for building a business rapport between service provider and customer.
• Identify customer needs and ensure that the service provider can meet those needs, both now and in the future. Business relationship management is the process that ensures that the service provider is able to understand the changing needs of the business over time. The relationship also allows the customer to articulate the value of the services to the service provider.

One of the most important concepts in this relationship is that of expectation: the customer’s expectation of the service provider’s capability and the service provider’s expectation of the customer’s needs. It is critical that the expectation of the customer does not exceed what it is prepared to pay for, and business relationship management is instrumental in the management of this communication.

Objectives of Business Relationship Management

The objectives of business relationship management are as follows:

• Ensure that the service provider has a clear understanding of the customer’s perspective of the service so that it is able to prioritize the services and assets accordingly.
• Ensure that customer satisfaction remains high, which will demonstrate that the service is achieving the needs of the customer.
• Establish and maintain a relationship between the customer and service provider that enables understanding of the business drivers and the customer.
• Ensure that the organization and the service provider communicate effectively so that the service provider will be aware of any changes to the customer environment. Changes to the customer environment may have an impact on the services provided.
• Identify technology changes or trends that may impact the type, level, or utilization of the service provided.
• Ensure that the service provider is able to articulate the business requirements for new or changed services and that services continue to meet the needs of the business and continue to deliver value.
• Provide mediation where there is conflict on the use of services between business units. This may be a conflict of resource allocation, or perhaps the requirement to utilize or change functionality differs for specific departments.
• Establish a formal procedure for managing complaints and escalations with the customer.

Scope of Business Relationship Management

The scope of business relationship management will vary dependent on the nature and culture of the organization. If the organization works with an internal service provider, it is likely that business relationship management will be carried out between senior management representatives in both the IT department and business units. Often in larger organizations, you will be able to find dedicated business relationship managers (BRMs), but in smaller organizations, the role may be combined with other managerial responsibility. The BRM will work with the customer representatives to understand the objectives of the business and ensure that the services provided are in alignment and supportive of those objectives.

If an external service provider supports the organization, you will commonly find that a dedicated account manager carries out the process, with an individual allocated to a customer or to a group of smaller customers with similar requirements. As the external service provider relationship with the business is captured in a contract, the focus will be on maximizing contractual value through customer satisfaction.

One of the major requirements for business relationship management is to focus on understanding how the services we provide meet the requirements of our customers. The process needs to ensure that we can communicate effectively with our customers so that we can understand their needs. There are a number of key areas we should consider:

• Business outcomes, so that we understand what the customer wants to achieve.
• How customers use our services, and which services are being offered to them.
• How we manage the services that are being offered, in terms of responsibility for the provision, the service levels we deliver, and the quality of service that is being achieved. We should also consider any changes that may be required in response to business and IT plans.
• As IT service providers, it is vital that we keep track of technology trends and advances that may have an impact on our service delivery. All too often, customers will hear about new technologies but not understand their impact. It is the responsibility of business relationship management to ensure that we communicate and advise on the best use of technology to deliver service value.
• We need to measure the levels of customer satisfaction and respond to any drop in satisfaction with suitable action plans. The BRM will be a key figure in the communication and management of any such plans.
• We need to consider how we can optimize the service we provide for the future.
• The business relationship management process should be concerned with the way the service provider is represented to the customer. This may mean engaging with the business to ensure that commitments from both sides have been fulfilled.

To successfully carry out the process of business relationship management and make sure all of the factors in the preceding list can be taken into consideration, it is necessary to work with other service management processes and functions. For example, the ability to associate business outcomes with services is part of service portfolio management; service level management provides information about service levels and their achievements; service asset and configuration management maps customers and service owners to the infrastructure, applications, and services.

Often other activities such as project management will use the BRM when they need someone to communicate with the customer. The communication is the responsibility of the business relationship manager, but it remains part of the project. The business relationship manager role is discussed further in Chapter 6, “Organizing for Service Strategy.”

This will require the identification of clear boundaries, relationships, and responsibilities between business relationship management and other service management processes because there is a strong potential for confusion. Business relationship management should focus on the relationship between the customer and service provider and the achievement of customer satisfaction, but the other service management processes should focus on the services themselves and how well they meet the agreed requirements.

Business relationship management does not ignore the services, but it should be focused on the high-level perspective of whether or not a service is meeting the business needs rather than focusing on specific targets for delivery. Equally, the other service management processes do not ignore this aspect of customer satisfaction, but they should be focused on the quality of the services and how customer expectations can be met.

An example of this is the difference between the service level management and business relationship management processes. They both have regular interaction with customers and are concerned with the ongoing review and management of service and service quality. But each has a different purpose, and the nature of the interface with the customer differs in content and responsibility.

This is clearly shown in Table 4.1, which is an extract from the ITIL Service Strategy publication.

Business relationship management is also concerned with the design of services, which makes it the ideal contact for strategic communication with customers for all of the service provider’s departments. There is a potential connection for business relationship management with application development as well as other development and design areas.

There are many connections and similarities between business relationship management and service level management and other service management processes, and the roles are often combined. But as you can see from Table 4.2, there are distinct differences in the activities for the processes, and there needs to be a clear understanding that when carrying out business relationship management, an individual needs to be aware when they are working on a strategic business relationship and when they are working tactically.

Value

The value of business relationship management is that it provides structured ongoing communication with customers, enabling the service provider to articulate and meet the current and future business needs of its customers. Each party gains a better understanding of the other so that customer expectations are realistic. Business relationship management mediates in disagreements and builds trust between the parties so they work together as strategic partners.

Business relationship management measures customer satisfaction and compares service provider performance with customer satisfaction targets and previous scores, usually through a regular survey. Business relationship management surveys are concerned with whether the service achieves its objectives at every level rather than day-to-day handling of individual incidents.

Significant variations in satisfaction levels or downward trends should be investigated and discussed with customers so that the reasons are understood. Any opportunities for improvement should be logged in the CSI register in conjunction with service level management for later review and prioritization. Care should be taken to ensure consistent measurements and to validate anomalous results that may have other causes.

The focus on customer satisfaction enables the service provider and customer to understand if the business objectives are being met. Although service provision without business relationship management is possible, it is potentially costly, erratic, and filled with mistrust.

Policies, Principles, and Basic Concepts

Next we consider some of the policies, principles, and basic concepts of business relationship management.

The process of business relationship management is often confused with the business relationship manager role. This is because the role of many BRMs is broader than just the business relationship management process. The BRM often represents other processes when engaged in business relationship management—for example, when obtaining information about customer requirements and business outcomes for use by service portfolio management, demand, and capacity management.

Among the key concepts are a number of data repositories. You saw these earlier when we discussed the service portfolio in Chapter 3, “Service Strategy Processes: Part 1.”

• The customer portfolio is a database or structured document used to record all customers of the IT service provider. It is business relationship management’s view of the customers who receive services from the IT service provider. Although used in several processes, especially service portfolio management, it is defined and maintained in the business relationship management process. The customer portfolio allows the service provider to quantify its commitments, investments, and risks relative to each customer.
• The customer agreement portfolio is a database or structured document used to manage service contracts or agreements between an IT service provider and its customers. Each IT service delivered to a customer should have a contract or other agreement that is listed in this portfolio. It is an important tool for business relationship management, but it is usually defined and maintained as part of service level management.
• Contracts or SLAs are negotiated and managed separately for each customer. For internal service providers, SLAs are negotiated and maintained by service level management, involving BRMs where these exist, whereas for external service providers, the process involves legal specialists, service level management, and dedicated BRMs.

Business relationship management works throughout the service lifecycle to understand customer requirements and expectations and ensure that they are being met or exceeded:

• In service strategy, business relationship management ensures that the service provider understands the customer’s objectives and overall requirements.
• In service design, business relationship management ensures that the service provider has properly understood the customer’s detailed requirements and initiates corrective action if this is not the case. In addition, business relationship management will work with service level management to ensure that the customer’s expectations of the new service are set at the appropriate level.
• In service transition, business relationship management ensures that the customer is involved in change, release, and deployment activities that impact its services, ensuring that its feedback has been taken into due consideration. The BRM may represent the customer on the change advisory board (CAB), or they may arrange for the customer to be at CAB meetings and change evaluation meetings when appropriate.
• In service operation, business relationship management works with service level management, incident management, and the service desk to ensure that services have been delivered according to the contract or SLA and may well be part of the escalation procedures.
• In continual service improvement, business relationship management monitors service reports and is given frequent updates about levels of customer satisfaction, exceptions to service levels, or specific requests or complaints from the customer. Working together with other processes and functions, business relationship management will help to identify appropriate remedial action in agreement with the customer.

Business relationship management is involved in defining and clarifying requirements for service. Customers may present solutions, specifications, needs, or benefits when what is required is a statement of the value the customer is trying to achieve. Business relationship management should focus on the outcome and work back to defining the service.

Some service providers are included in strategic discussions about the customer’s business. Business relationship management is the process that facilitates this and ensures that the right person is included in these meetings. It also ensures that relevant information about the strategic direction of the customer is communicated back into the appropriate processes and to the people within the service provider organization.

Process Activities, Methods, and Techniques

Figure 4.1 shows the business relationship management activities. We are going to look at them in more detail.

The business relationship management process itself consists of activities in every stage of the service lifecycle, but it is rarely executed as a single end-to-end process. The exact activities that are executed will depend on the situation that has caused the service provider or customer to initiate the process. The process also interfaces with a number of other service management processes throughout the service lifecycle. Business relationship management is not a single end-to-end process with a single beginning and end. Rather, it consists of a number of key activities that are linked together.

The business relationship management process is initiated either by the customer or by service management processes and functions, usually by contacting the business relationship manager. For customers, business relationship management provides a way to communicate with the service provider about their needs, opportunities, and requirements and to have these taken care of in a formal, organized manner. The business relationship manager must maintain a register of all opportunities, requests, complaints, and compliments to track them and ensure that they do not fall between different processes and functions. The service provider is also able to initiate the business relationship management process if it needs input from customers or if it needs to initiate the creation of a new service or changes to an existing service.

Triggers

Business relationship management includes the following triggers:

• A new strategic initiative or a new service, or a change to an existing service, has been initiated.
• A new opportunity has been identified or a service has been chartered by service portfolio management.
• Other triggers could be customer requests, suggestions, or complaints or the fact that a customer meeting or customer satisfaction survey has been scheduled.

Inputs

Inputs to business relationship management are as follows:

• Customer requirements, requests, complaints, escalations or compliments
• The service strategy and, where possible, the customer’s strategy
• The service and project portfolios, SLAs, and RFCs
• A request to validate patterns of business activity or user profiles defined by demand management

Outputs

Business relationship management has the following outputs:

• Stakeholder definitions, defined business outcomes, and an agreement to fund (internal) or pay for (external) services
• The customer portfolio and service requirements for strategy, design, and transition
• Customer satisfaction surveys and their results
• Schedules of customer activity in various service management process activities and of training and awareness events
• Reports on the customer perception of service performance

Interfaces

The following list includes major interfaces with business relationship management:

• Strategy management for IT services, which works closely with the BRM to identify market spaces with information gleaned from customers. The BRM also gathers strategic requirements and desired business outcomes and secures funding (internal) or pursues deals (external).
• Service portfolio management, which works with BRM to identify more detailed requirements and information about the customer environment required to create service models and assess proposed services.
• Financial management for IT services obtains information about the financial objectives of the customer and helps the service provider to understand what level of funding or pricing the customer is prepared to accept.
• Demand management works with business relationship management to identify and validate patterns of business and user profiles. The BRM will also identify changes to those patterns or the priorities of specific business activities.
• Service level management uses customer information and service requirements gathered by the BRM to understand the customer’s priorities regarding service performance and deliverables.
• Capacity and availability management, which rely on information about business outcomes and service requirements gathered through business relationship management. The BRM will also validate whether proposed levels of performance and availability will be acceptable to customers.
• The BRM provides information on business priorities and outcomes for IT service continuity management and ensures that countermeasures, recovery plans, and tests accurately represent the world of the customer.
• Service catalog management provides the basis for many discussions, reviews, and requests that are initiated through business relationship management.
• Change management, because business relationship management is often the initiating point for requests for change and will also be involved with assessing the impact and priority of changes.
• The BRM also ensures the appropriate level of customer involvement in release and deployment management and service validation and testing processes.
• Continual service improvement, with which business relationship management has a strong interface because service improvements and the seven-step improvement process are important parts of business relationship management. The BRM validates, prioritizes, and communicates improvement opportunities and plans with the customer in conjunction with service level management.

Critical Success Factors and Key Performance Indicators

Finally we consider the CSFs and KPIs for this process. (Remember the explanation of these in Chapter 3 in the section on strategy management for IT services.) We shall consider the following examples, but for the full list, see the ITIL Service Strategy publication:

• Critical success factor: “The ability to document and understand customer requirements of services and the business outcomes they wish to achieve.”
  • KPI: That business outcomes and customer requirements are documented and signed off by the customer as input into the service portfolio management and service design processes. If this KPI is present and achieved, the CSF will be achieved.
• Critical success factor: “The ability to establish and articulate business requirements for new services or changes to existing services.”
  • KPI: Every new service has a comprehensive set of requirements defined by business managers and staff, and these have been signed off by both business and IT leadership at the strategy, design, and transition stage.
  • KPI: The reasons for expected results and detailed requirements for changes to services are documented and signed off at the strategy, design, and transition stages.

Challenges

Business relationship management faces the following challenges:

• Moving beyond using business relationship management purely as a means of working on levels of customer satisfaction. The BRM needs to be involved in defining services and tracking that they are delivered according to the agreed levels of service.
• Another challenge can be that a history of poor service causes the BRM to struggle to have any credibility. This sometimes results in customers not being willing to share requirements, feedback, and opportunities.
• There may be confusion between the role of business relationship manager (BRM) and the process of business relationship management. Although the BRMs are often required to execute activities from other processes simply because of their customer-facing position, this does not make those activities part of the business relationship management process.

Risks

Business relationship management risks are as follows:

• Confusion regarding the boundaries between business relationship management and other processes. This may lead to duplication of effort, or alternatively, some activities may be neglected. An example of this would be during a major incident the incident manager may receive multiple calls from business relationship management and service level management. It is important that these boundaries are clearly defined.
• A disconnect between the customer-facing processes, such as business relationship management, and those focusing on technology, such as capacity management. Both are critical for success, and they need to be properly integrated.

Purpose

The purpose of demand management is to understand, anticipate, and influence customer demand for services and to work with capacity management to ensure that the service provider has capacity to meet this demand. Demand management works at every stage of the lifecycle to ensure that services are designed, tested, and delivered to support the achievement of business outcomes at the appropriate levels of activity.

Objectives

The objectives of demand management are as follows:

• The first objective is about understanding the demands that will be placed on the service by identifying and analyzing patterns of business activity.
• The second objective is concerned with understanding the different types of user profiles that will use the service and how the demand from each type differs from the others. An example of this would be a cell phone supplier who offers different tariffs to business users and schoolchildren because they put very different demands on the service provided.
• The third objective is to ensure that services are designed to meet the patterns of business activity that have been identified and are therefore able to meet the business outcomes.
• Another objective of demand management is to work with capacity management to ensure that there are adequate resources to meet the demand for services, maintaining a balance between the cost of service and the value that it achieves. Unused resources are an additional cost.
• Demand management seeks to anticipate and prevent or manage situations in which demand for a service exceeds the capacity to deliver it. Insufficient resources have an impact on the achievement of the business objectives.
• The process aims to gear the utilization of resources that deliver services to meet the fluctuating levels of demand for those services.

Scope

The scope of the demand management process is to identify and analyze the patterns of business activity that initiate demand for services and to identify and analyze how different types of user influence the demand for services.

Value

The main value of demand management is to achieve a balance between the cost of a service and the value of the business outcomes it supports. The other service strategy processes define the linkage between (and the investment required for) business outcomes, services, resources, and capabilities. Demand management refines the understanding of how, when, and to what level these elements interact.

Policies, Principles, and Basic Concepts

Demand management is about matching supply to demand. Unlike a factory that produces products, which can continue to be produced and stockpiled in anticipation of increased demand later, when we supply a service, the demand has to be met immediately, not later. A call center that receives few calls on a Friday afternoon cannot start answering the following Monday morning’s calls! Monday morning will be busy, but there is no way to use the quiet times to balance out that busy morning. Another way of saying this is that consumption produces demand and production consumes demand in a highly synchronized pattern. There is a real risk that insufficient capacity will mean that the demand cannot be met at the time it is needed.

Supply and Demand

A major part of demand management is to understand the potential demand and the impact of the demand on the service assets. This allows capacity management to manage service assets (and investments) toward optimal performance and cost. The aim is to adjust the productive capacity to meet the demand forecasts and patterns. Some types of capacity can be quickly increased as required and released when not in use. Offering price incentives to customers to use services at quieter times means that the arrival of demand can be influenced to some extent. However, we cannot stockpile the service output before demand actually materializes. This cycle of demand, which is then supplied, will function only while there is available capacity; as soon as capacity is no longer available, the service provider will not be able to supply enough of the services to satisfy customer demand.

This highly synchronized pattern of supply and demand can be seen in Figure 4.2. Each time a user consumes a service, demand is presented to the service provider, and this consumes capacity of the service assets. This, in turn, results in the service being supplied to meet the consumer’s demand. The greater the consumption of the service, the higher the demand, the higher the consumption of capacity, and the more the service is supplied.

Process Activities, Methods, and Techniques

Demand management activities include identifying and implementing measures to influence and manage demand together with capacity management. This could be in situations where service demand exceeds capacity and where capacity increases are not feasible. Disincentives such as charging higher rates at peak times and imposing penalties can be used to lessen demand to what is deliverable. Where capacity exceeds demand (perhaps for a new service), incentives such as lower off-peak rates could be used.

If the peaks and troughs of demand can be smoothed out, the cost of providing the service is optimized because it can always deliver what is required without excessive wasted capacity.

Patterns of Business Activity

Services are designed to enable business activities, which in turn achieve business outcomes. So every time a business activity is performed, it generates demand for services. Customer assets such as people, processes, and applications all perform business activities, and because of the way these assets are organized or because of the tasks they are completing, there will tend to be noticeable patterns in the way the activities are performed. These patterns of business activity (PBAs) represent the dynamics of the business and include interactions with customers, suppliers, partners, and other stakeholders.

PBAs must be properly understood, defined, and documented, and any changes to them must be properly controlled. Each PBA needs to have a documented PBA profile containing the following details:

Classification PBAs are classified by type, which could refer to where they originate (user or automated), the type and impact of outcomes supported, and the type of workload supported.

Attributes These may include frequency, volume, location, and duration.

Requirements These could be performance, security, availability, privacy, latency, or tolerance for delays.

Service Asset Requirements Design teams will draft a utilization profile for each PBA in terms of what resources it uses, when the resources are used, and how much of each resource is used. If the quantity of resources is known and the pattern of utilization is known, the capacity management process will be able to ensure that resources are available to meet the demand, provided it stays within the forecast range.

Figure 4.3 shows a number of different examples of patterns of business activity. Take a moment to look at them.

Example A shows the pattern of sales for a greeting card company in the United States. The pattern of card sales varies in line with major holidays or events; this in turn will lead to different levels of IT service utilization. The IT service provider must anticipate the business activity before each major holiday so the company can be sure to prepare and ship the greeting cards in time. In addition, the online ordering systems will be in high demand in the two weeks prior to the holiday. This high demand is not typical, so either the service provider will need to invest in spare capacity that will be idle at other times of the year or they will need to be able to balance the workload across multiple resources. In this way, processing lower-priority services will make way for the volumes of the higher-priority seasonal activity.

In example B, a consulting company relies on a timesheet service to bill consultants’ time. Since most consultants complete their timesheets for the entire week at the end of the week, the service is more critical and is utilized more later in the week. Consultants may need to be encouraged to log their time at the end of each day or the beginning of the next day.

Example C shows how journalists use a word-processing and editorial service. From a quiet start early in the day, the service gets busier and busier as deadlines approach. This behavior is consistent with the nature of journalism, so trying to change it is unlikely to be successful. In these cases, measures will have to be taken to ensure that resources are available to match the PBA.

User profiles (UPs) are based on roles and responsibilities within organizations and may include business processes and applications. Many processes are automated and can consume services on their own. Processes and applications can have user profiles. Each UP can be associated with one or more PBAs.

Activity-Based Demand Management

Business processes are the primary source of demand for services. Patterns of business activity (PBAs) influence the demand patterns seen by the service providers. It is important to study the customer’s business to identify, analyze, and classify such patterns to provide sufficient basis for capacity management. The service provider must visualize the customer’s business activity and plans in terms of the demand for supporting services, as shown in Figure 4.4. Analyzing and tracking the activity patterns of the business process make it possible to predict demand patterns for services in the catalog that support the process. It is also possible to predict demand for underlying service assets that support those services.

Some of the benefits for analyzing PBAs are in the form of inputs to service management functions and processes:

• Service design can optimize designs to suit demand patterns.
• Capacity management translates the PBAs into workload profiles so that the appropriate resources can be made available to support the levels of service utilization.
• The service catalog can map demand patterns to appropriate services.
• Service portfolio management can approve investments in additional capacity, new services, or changes to services.
• Service operation can adjust allocation of resources and scheduling.
• Service operation can identify opportunities to consolidate demand by grouping closely matching demand patterns.
• Financial management for IT services can approve suitable incentives to influence demand.

Triggers

Triggers of demand management are as follows:

• A request from a customer for a new service or a change to an existing service. This will be initiated through business relationship management and service portfolio management.
• A new service being created to meet a strategic initiative would be another trigger. This will be initiated through service portfolio management.
• The requirement to define a new service model and document its patterns of business activity and/or user profiles.
• Demand management would also be invoked if utilization rates are causing potential performance issues or a potential breach to an SLA.
• An exception has occurred to forecast patterns of business activity.

Inputs

Demand management has the following inputs:

• Initiatives to create a new service or to change an existing service. These inputs can come from service portfolio management or from change management.
• Service models need to be validated, and patterns of business activity associated with each service model will need to be defined. The customer portfolio, service portfolio, and customer agreement portfolio, all of which will contain information about supply and demand for services, are also inputs to demand management.
• Charging models will be assessed to ensure that under- or over-recovery does not occur with internal service providers or that pricing will be profitable for external service providers. Chargeable items will need to be validated to ensure that customers actually perceive them and use them as defined.
• Service improvement opportunities and plans will need to be assessed in terms of their impact on demand.

Outputs

The outputs of demand management include user profiles and documented patterns of business activity to be included in the service and customer portfolios. Other outputs are policies for management of demand when resources are overutilized and policies for how to deal with situations in which service utilization is higher or lower than anticipated by the customer. Finally, demand management will agree on and document the various options for differentiated offerings that can be used to create service packages.

Interfaces

Major interfaces with demand management are as follows:

• Strategy management for IT services will identify the key business outcomes and business activities that will be used to establish patterns of business activity and user profiles.
• Service portfolio management uses information from demand management to create and evaluate service models, to establish and forecast utilization requirements, and to identify the different types of users of the service. In addition, it will develop service packages based on the information about patterns of business activity and user profiles.
• Financial management for IT services forecasts the cost of providing the capacity to satisfy the demand and helps to identify charging measures to regulate demand in the event of overutilization.
• Business relationship management is the primary source of information about the business activities of the customer. Business relationship management will also be useful in validating the user profiles and differentiated service offerings before they are confirmed in the customer and service portfolios.
• Service level management will help to formalize agreements in which the customer commits to levels of utilization and the service provider commits to levels of performance. Actual levels of performance and utilization will be reviewed at the regular service level review meetings (using information from demand management and capacity management) and any deviations noted. Demand management will work with service level management to define policies for how to deal with variances in supply and demand.
• Capacity management works closely with demand management to define how to match supply and demand in the design and operation of services and to understand trends of utilization and how the services might be adjusted for future use. It also monitors the actual utilization of services.
• Availability management identifies the times when availability is the most important through analyzing patterns of business activity.
• IT service continuity management uses demand management information to analyze business impact and size recovery options.
• Change management works with demand management and capacity management to assess the impact of changes on how the business uses services.
• Service asset and configuration management identifies the relationship between the demand placed on services and the demand placed on systems and devices.
• Service validation and testing ensures that services deal with patterns of demand and validates the effectiveness of measures taken to prevent overutilization.
• Finally, event management provides information about actual patterns of service utilization versus the anticipated patterns of business activity for a service.

Critical Success Factors and Key Performance Indicators

You’ll recall from earlier discussions the definitions of critical success factors and key performance indicators. Here are some examples for demand management.

• Critical success factor: “The service provider has identified and analyzed the patterns of business activity and is able to use these to understand the levels of demand that will be placed on a service.”
  • KPI: Patterns of business activity are defined for each relevant service.
  • KPI: Patterns of business activity have been translated into workload information by capacity management.
• Critical success factor: “The existence of a means to manage situations where demand for a service exceeds the capacity to deliver it.”
  • KPI: Techniques to manage demand have been documented in capacity plans and, where appropriate, in service level agreements.
  • KPI: Differential charging (as an example of one such technique) has resulted in a more even demand on the service over time.

Challenges

Demand management faces the following challenges:

• Information about business activities may be hard to obtain if demand management was not included in the set of requirements.
• Customers may struggle to break down individual activities that make sense to the service provider. Business relationship management should be able to help.
• Lack of a formal service portfolio management process or service portfolio will hamper the understanding of the business requirements, relative value, and priority of services. This may mean that demand management information is only recorded on an ad hoc basis.

Risks

The risks of demand management are as follows:

• Lack of, or inaccurate, configuration management information makes it difficult to estimate the impact of changing demand on the service provider’s infrastructure and applications.
• Service level management may be unable to obtain commitments from the business for minimum or maximum utilization levels. Without this commitment on utilization, it is difficult for demand management to commit to levels of service. As a result, higher levels of investments than are actually required are made to enable the service provider to keep ahead of demand, even when the service is not essential.

Exam Essentials

Understand the principles and techniques of service strategy. You will need to understand service strategy principles, techniques, and relationships and their application for the creation of effective service strategies.

Know the service strategy processes of demand management and business relationship management. From a management-level viewpoint, know the purpose objectives, scope, principles, and activities of business relationship management and demand management.

Understand the interfaces with other processes. You need to be able to describe how the business relationship management and demand management processes interface with the rest of the service lifecycle and the processes from the other lifecycle stages.

Understand the business value, challenges, and risks of each process. You should be able to explain the value the business derives from the business relationship management and demand management processes and the challenges and risks involved in running them.

Understand how business relationship management works with the senior business management. Make sure you understand how the business relationship manager(s) work to ensure that the service provider understands the business strategy and provides the services required to further that strategy. Know that this process also involves explaining to the business what the service provider can and cannot do.

Be able to describe the key differences between business relationship management and service level management. You should be able to list and explain the differences in activities and focus between business relationship management and service level management.

Understand the key activities of demand management. Make sure you understand how demand management anticipates the level of demand and works with capacity management and other processes to meet it.