In enterprise, capacity analysis promotes the assessment of production processes and workflows in order to correctly speculate output rate.
In all cases of manufacturing, maximum possible output of current facilities must be achieved. Capacity management has been an integral part of company operations management since the Industrial Revolution.
When determining both long- and short-term company strategies, the ability to understand your current assets and limitations toward achieving objectives is of immeasurable importance.
IT systems and capacity management
In 2015, Fortune 500 companies collectively made $12.5 trillion in revenue. Surveys taken since 2006 show that in 2015, an average of 4% to 6% of a company’s revenue goes into its IT budget. This proves that there is a steady annual increase in costs, in 2007 the annual mean was 2.8%.
Fortune 500 companies spent over $620 billion on IT hardware and software systems in 2015.
2010 to 2015 market research on global IT budgets show that companies tend to overspend by margins of minimally 8% to a staggering 25%. Yet despite, often exponentially, increasing systems complexity, critical business dependencies and rising consequential costs, dedicated capacity analysis is still at its outset.
In 2014, a Gartner report stated the need for enterprise to focus on the capacity and performance of its IT systems. It has been emphatically repeated by numerous IT think tanks, architects and technology watch journalists. Gartner’s 2015 “Market Guide for Capacity Management Tools” report estimates that by 2018, over 30% of global enterprise will be using capacity infrastructure management tools, up from 5% in 2014.
Capacity management enables cost-competitive insight and supports much needed systems agility.
Effective capacity analysis
Capacity Management is a cornerstone for enterprise ROI tracking. The starting point of any sort of capacity development planning process must be founded by determining the capacity of existing facilities. Once this is attained, different levels and individual priorities can be considered.
There are 4 steps that insure conclusive effective capacity analysis.
1.) Identify and determine key systems components and the factors of production delivery
2.) Determine a development framework, it should take the following points into account:
- The area of assessment and context
- The assessment objective
- The assessment mandate (current method of work)
The imperative of change and change readiness (if needed)
3.) There can be no effective data analysis without considering:
- Levels of capacity, there must be a holistic understanding of the differing factors involved
- Types of capacity, an assessment of priorities considering production, distribution, incentives and/or sanctions (limitations), company policy and culture and so on
Themes of application, the capacity development framework enhances assessment accuracy so that effective strategy may be implemented
Finally, there are several significant peripheral factors to consider when approaching the topic of capacity management:
- Everything is an ongoing development process. History creates the present. Analyzing the present helps identifying the best course of action in the future.
- Retain a pragmatic approach to the amount of collected information. If there is a need for intervention then this must be relevant and realistic.
- A bird’s eye view is essential for a holistic approach; however sweeping general implementations should be avoided. Conclusions should be solution orientated and specific in order to guide correct compartmentalized action.
- Structured self-assessment in processes delivers ownership in analysis and is always preferable for initiatives of change.
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