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Capacity Management Primer

An Introductory Guide to Capacity and Performance Management Within Your Organisation

by Danny Quilton

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This white paper provides a short introduction to the role of capacity and performance management.


What is Capacity Management?

The goal of capacity management is to ensure the timely provision of cost-justifiable capacity, that meets the current and future agreed needs of the business.


Do I Need Capacity Management?

Capacity management will be beneficial if your organisation meets one or more of the following criteria:

  • Frequent innovation; new product launches, changes to existing services, etc.
  • A significant percentage of revenue is dependent on ICT services
  • A strategy to reduce the company’s impact on the environment
  • Rapid business growth
  • Desire to reduce or optimise information and communication technology (ICT) costs
  • Requirement to reduce the risk of degraded availability of business-critical services
  • Uncontrolled growth in cloud costs

The diagram below shows a number of criteria to determine whether capacity management is required.


The Impact of Insufficient Capacity and Performance Management

If your organisation meets some or all of these criteria, then the following risks will need to be addressed:



Reputational Damage
Damage to your organisation resulting from a degraded service.

Reduced Service Availability
This may occur if there is insufficient capacity in the ICT infrastructure thereby causing a service failure or degraded service.

Demotivated Staff
Staff productivity and morale may be affected by a poorly performing internal service.

Poor Customer Satisfaction
Poor user experience can impact the customer’s perception of the business.

Lost Revenue
This occurs when customers cannot use your service and switch to rival services. This is an important consideration with e-commerce services where the cost to a customer of switching to a competitor is low.

Reduced Profit
With uncontrolled cloud costs, budgets can be blown and the bottom line impacted.


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Capacity and Performance Management

Capacity and performance management is used to mitigate these risks.

Capacity and performance management employs processes, tools and skilled staff to reduce risk by assessing the future business demand, and planning the cost-justifiable capacity required to support it. This approach is especially useful where cloud costs represent a significant portion of the ICT budget.

The risk of capacity exhaustion is greater where the service is supported by many ICT components; capacity exhaustion of even one of the many components may cause catastrophic service failure. The level of effort required to deliver capacity and performance management will depend on the service in question, the complexity of the ICT infrastructure that supports the service and the data available.


Scenario Planning

Capacity and performance management employs techniques to enable the business to conduct scenario planning, for example:

  • What will the business demand be for next year?
  • Can we support the business demand for next year?
  • What level of business demand can we support?
  • What is the impact on our service if we launch a new product?
  • What happens if we have a major infrastructure failure?
  • Can our existing service support increased demand resulting from a merger or acquisition?
  • What will our ICT operating and capital costs be next year?
  • What should our cloud budget be next year?




Capacity and performance management is a powerful risk management technique to ensure the continuity of business services, whilst minimising additional spend on ICT and cloud infrastructure.


Danny Quilton


About the Author

Danny is a highly regarded thought-leader and practitioner within the field of performance and capacity management, with 21 years’ experience.

He co-founded Capacitas 15 years ago to help enterprise organisations solve performance and capacity challenges, and during this time has worked with easyJet, Sainsburys, Arcadia, RS Components and Nomura Investment Bank.

Danny has presented at numerous industry events worldwide, including Butler Group, CMG, itSMF and Cloud Expo. He has published articles with City AM, as well as Venture and .net magazines.

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