ITIL Demand Management misunderstood
Demand Management is a ghost practice that doesn't get mentioned as often as some other ITIL V3 practices. When it does get mentioned, the understanding of it is often wrong. It is a key operational practice, not some strategic activity left to the executive management. I look forward to seeing how it is reworked in ITIL V3 2011
Demand Management is a much misunderstood practice (not "process"). I've seen it refered to as a gating mechanism to the Service Portfolio. Not so. That would be Portfolio Management. If you (bravely) read Service Strategy, it is in fact an operational process conducted by the business to control user demand for service transactions, NOT customer demand for new services.
Here is an interesting exercise: what does the Official Introduction to The ITIL Service Lifecycle say about "Demand Management"? Nada. Not even in the index, though it shows up in a few diagrams and a bullet list on p25.
Service Design does mention Demand Management in the place where you would most expect it to do so, Capacity Management, on p84. But of course more people claim to have read the five books than actually have (many millions of people were reportedly at Woodstock). I still see Demand spoken about as management of demand for new services. I'm particularly sensitive to it because I did it a lot before the penny dropped for me.
So if Demand Management is about modulating user demand for a service not customer demand for new services, then where might we expect to see it. In Capacity Management, as noted. In Financial Management, and yes as noted Service Strategy understands it. Service Operation discusses feedback loops but it focuses on measurement of IT-centric metrics and leaves "service quality" metrics to CSI. Apparently this includes measuring how busy the system is, how many transactions are being executed, because I can't find anything about load in Service Operation. Continual Service Improvement does reference Demand correctly, on p120.
One of the primary service reporting metrics needs to be load. If load is approaching the limits of capacity then - in some businesses - immediate action is required to reduce demand. Less often, the reverse is also true: when demand falls, something needs to be done to stimulate demand to ensure utilisation. This could be a daily or even hourly activity for some, not just the output of a monthly or annual capacity planning review. We get all worked up about CPU and storage but I don't often see transactional load monitored as a capacity issue in its own right. We can adjust the tech stuff by finding more kit, but the load issue needs to be escalated to the business to deal with by adjusting price, entitlement, availability, desirability or some other variable to reduce (or increase) demand.