Capacity Management

Wikipedia defines Capacity Management as a process used to manage information technology (IT). Its primary goal is to ensure that IT resources are right-sized to meet current and future business requirements in a cost-effective manner. One common interpretation of capacity management is described in the ITIL framework. ITIL version 3 views capacity management as comprising three sub-processes: business capacity management, service capacity management, and component capacity management (known as resource capacity management in ITIL version2).[1]

Capacity Management Components[2]
There are many parameters that need to be considered when designing a service (or architecture). One to be considered right at the beginning is to satisfy demand for the service by providing enough capacity. The task of Capacity Management is to provide enough capacity to satisfy capacity and performance requirements. It should be timely and cost-effective. Capacity Management is often connected with performance. Capacity Management is a complex process. It includes proactive (e.g. forestall capacity issues) and reactive measures (e.g. responding to capacity events) and it is highly technical. To make it easier, ITIL suggests three sub-processes:

  • Business Capacity Management
  • Service Capacity Management
  • Component Capacity Management

Capacity Management Components
source: Advisera

  • Business Capacity Management: Business Capacity Management translates business plans and needs into requirements for IT services and architecture. As customers’ business changes, so are service requirements changing. Change in service requirements usually has an impact on demand for capacity. Service Level Requirements and Service Level Agreement targets must be met. Business Capacity Management should predict changing requirements for capacity demand and manage such demand on a tactical level. This means that Capacity Management is involved in planning processes as well as financial and service level management processes. In such a way, information flow will enable capacity management to satisfy future business needs.
  • Service Capacity Management: Service Capacity Management focuses on management, control and prediction of end-to-end performance of live IT services usage and workloads. It’s about measuring performance and comparing it to requirements that are set in Service Level Agreements (SLAs) or Service Level Requirements (SLRs). Services are monitored to gather data, which identify trends and indicate exceptional conditions. This sub-process is often found in the Network Operations Center (NOC) or similar facility. Tools are used to help technicians (like IT Operations) to detect, for example, peaks in service usage, load, trends, etc. In such a way, incidents can be prevented before they occur, or data important for incident resolution can be gathered in cases when capacity-related incidents take place.
  • Component Capacity Management: Component capacity is what most of us are familiar with. Open your computer properties and check hard disc storage capacity. Or, ask your ISP what your internet link throughput is. Component Capacity Management focuses on management, control, performance prediction, utilization and capacity of technology components (e.g. a hard disc, network interface, processor, etc.). Like in Service Capacity Management, there are reactive and proactive activities within the scope of Component Capacity Management. Reactive activities will be taken when a capacity-related incident occurs. Experience and knowledge about service usage and how services are utilizing components is crucial for efficient proactive Component Capacity Management.

Which capacity to consider?
Well, all three of them. Depending on where your activities are, you will be more concerned with one of the sub-processes. If you are strictly operational, then Component Capacity Management will be your daily job. Service Level Managers are concerned with performance that service provides. They will not go deep into details like what is memory utilization compared to its capacity (Component Capacity Management). What they care about is if, for example, throughput corresponds to the SLRs or SLAs that organization is obliged to. Business Capacity Management is the concern of people inside an organization who are trying to generate income with services (and their capacity and performance) that organization provides.

Functions and Benefits of capacity management:[3]

  • Functions of Capacity Management
    • Storage of capacity management data.
    • Ensuring required service levels are met in all disciplines.
    • With respect to resource utilization, analyzing, monitoring, and tuning the necessary modifications.
  • Understanding the current infrastructure performance and analyze the future requirements.
    • With input from other teams, project the annual growth plan for infrastructure.
    • Managing the requirements for computing resources.
  • Benefits of Capacity Management
    • Improvement of performance, reduction of consumption due to fine tuning of applications and components of infrastructure.
    • Improving the efficiency of provision capacity.
    • Elimination of redundant work and ensuring consistent monitoring of infrastructure components.
    • Improvement of IT cost per service unit components.

Importance of Capacity Management[4]
Capacity management, one of five components in the ITIL Service Delivery area, is a way of putting yourself back in control. It enables CIOs to plan ahead, to respond to business requirements speedily and to manage resources efficiently. Adopting capacity management tools as part of a wider IT strategy makes it possible to impose order on an increasingly complex IT landscape. As John Madden, senior analyst at Ovum, puts it: “Instead of having massive amounts of capacity that may or may not be utilized, capacity management offers the ability to assign that dynamically and know that your IT infrastructure is being utilized in the way you intended it to.”

One of the biggest problems faced by IT departments is that of matching supply to demand. Too much resource results in wastage, while too little causes frustration for the business and a headache for IT. Very often, the IT department does not know how its server capacity is being used. The tendency of many IT departments to err on the side of caution by buying more server capacity than is needed means that wastage is rife at a time when purse strings are being tightened. At the same time, some firms run critical applications that cannot be allowed to fail, so too little capacity would prove disastrous. In an ideal world, there would be little or no wastage and capacity would always be sufficient to meet demand. Implementing capacity management tools enables you to approach this ideal.

Adopting a capacity management strategy enables you to identify underused capacity and opportunities for consolidation. You can then reallocate capacity as necessary and monitor the impact. Simply doing this can save you money on previously wasted resources. But from there, it’s possible to work with the business to model the impact of a new application or business process, finding out both how much it will cost and what the IT impact will be. This enables the business to make better-informed decisions about whether to go ahead with a particular project or not.

Capacity management enables you to manage demand according to business priorities, so you can make sure that certain critical processes always have enough capacity to run effectively. You can help develop a long-term IT strategy for the business by documenting both the levels of current utilization and forecasted requirements. Businesses that have adopted capacity management tools have seen a fast return on investment. By pinpointing resource-hungry applications, they have been able to avoid spending money on new servers, instead using existing resource more efficiently. Good capacity management also provides businesses with the ability to make more informed decisions about which software to invest in. Because capacity management requires business and IT to work hand-in-hand, decision-making about IT becomes more closely aligned to the business’s requirements.


  1. Capacity Management Defition Wikipedia
  2. What are the Components of Capacity Management? Advisera
  3. Functions and Benefits of capacity management Techopedia
  4. Importance of Capacity Management Help Systems

Further Reading

  • ITIL Capacity Management: Best Practices & Processes BMC
  • A Manager's Guide to Implementing Capacity Management Teamquest
  • Why your business needs capacity management Teamquest