What Does Capacity Planning Mean?

Capacity planning is the process of determining the ongoing software and hardware requirements for a business and ensuring that the resources are available when needed. Planning involves understanding the information technology that underpins a company's operations, how IT is used internally and with external stakeholders and what the IT requirements are likely to be in the future.

Facts

Infrastructure expert and author Rich Schiesser points out in a February 2004 "InformIT" article that capacity planning is not the same as capacity management because planning is more strategic and long-term, while management is the mundane day-to-day IT operational activities. Denise Kalm, director of product marketing at Computer Associates, wrote in a company technical paper that the need for capacity planning arises from changes in the software functionality; demands on hardware characteristics, such as disk storage, memory and processor speed; as well as changes in the business environment. For example, a start-up company's computer requirements will dramatically increase as its sales volume increases and it expands its customer base. Capacity planning is "both art and science," Kalm suggests, because it involves synthesizing information from multiple sources and rigorously comparing projected capacity requirements to actual usage and calibrating accordingly.

Significance

Hardware and software can be expensive, which makes careful planning critical for managing costs over the long term. The costs of installing enterprise resource planning software systems from software companies such as SAP and Oracle can run into the millions of dollars. A large company might be able to afford expensive mistakes, but a small or medium-sized company cannot. Yet, having the right information technology in place can mean the difference between success and failure. For example, a company that implements an e-commerce system but fails to accurately plan for demand, server crashes and slow response times could lose customers to the competition.

Planning

Harris Kern, author and founder of IT consulting firm The Enterprise Computing Institute, suggests that small businesses should "start small." This means investing in scalable hardware and software systems that they can upgrade as the business grows and requirements change. Capacity planning should also factor in possible reductions in system requirements, which can arise from mergers and demand falloffs due to competitive pressures and economic downturns. Senior management involvement is essential in promoting a culture of continuously evaluating IT requirements and planning ahead to reduce surprises and failures.

Considerations: Reasons for Failure

Schiesser outlines several reasons for failed capacity planning exercises. For example, IT analysts might be too busy with their day-to-day activities to spend time on long-range planning. He suggests that companies should assign the capacity planning responsibilities to a group within the IT department empowered to make the necessary changes. Capacity planning might fail because the end-users are incapable of or not interested in predicting future workloads. In addition, business conditions might change too often to make effective capacity planning difficult.

References

• Computer Associates; Forecasting the Future -- Capacity Planning Best Practices Using; Denise Kalm, et al.
• "InformIT"; Why Capacity Planning Is Seldom Done Well; Rich Schiesser; February 2004
• Tech Republic; 10 Ways to Build a Solid Capacity Planning Effort; Harris Kern; June 2008