The nature of cloud architectures and services varies widely, so there is no single or simple way to approach cloud capacity. Also, consider building in a cushion to anticipate issues like bottlenecks, sudden staff unavailability, or certain tasks taking more time than expected. Also, note the level of context-dependent nuance you may see in the numbers. That way, goals can get accomplished and demands can be satisfied. The benefit of capacity planning is that it enables your company to predict resource bottlenecks or scarcity months or even years in advance. The most important resources to HR will differ from those of IT, and vice-versa. It may also require desks, software, laptops, and subscriptions to tools like Jira. Components of capacity management They may even seek to achieve an exact match during times when balancing resource availability with budget constraints is absolutely paramount. In todays world of constant and ever accelerating change we have the tendency to discard the old and look for the new. How often do you experience disruptions or downtime related to capacity or resource allocation? This is real time by some definitions. Cloud capacity management is critical to an effective IT strategy. All plans start with a free 14-day trial. You may also notice time-based fluctuations in productivity, such as people being less productive on Fridays, at the beginning of the quarter, etc. Copyright 2022 Day.io Holdings Limited. Keep a wary eye on how your company is undertaking its capacity management responsibilities to avoid issues like these! This can be done by using cloud computing or by renting extra capacity from another company. By examining performance variances over time, IT management can use those performance statistics to help develop models describing anticipated processing which can be used for short- and long-term planning. Machines require raw materials to fabricate, too. This information can be used to make predictions about future capacity needs, and ensures you purchase the correct amount of stock or raw material in anticipation of the expected demand. In this context, the company needs the resources available not just to have the machines themselves they also have to have everything needed by the machines in order to run. 3 Key Benefits of Hybrid Cloud as a Service, 4 Things You Need to Know Now About Edge Computing, How to maintain network continuity in a DR strategy, Prevent different types of network attacks with DR planning, 11:11 grows DR portfolio after Sungard buy, BackupLabs devises SaaS backup for under-protected apps, CloudCasa plans split from Catalogic as independent company, Data protection for SaaS-based apps is a work in progress, Use Cockpit for Linux remote server administration, Get familiar with who builds 5G infrastructure, Do Not Sell or Share My Personal Information, Networks and related communications devices, Storage systems and storage network devices. In certain seasons, a company may have higher demand for their goodsand in other seasons demand may be lower. As opposed to a match strategy, where work put into constantly calculating the current and near-future demand, an adjustment strategy responds to indicators on a less-frequent basis. Why capacity planning and management is such an important part of operations management? Formula, Calculation, and Example. Echoing the point above, look at historical data to tell you the most-accurate story of how many total hours it might take (and how much capacity is needed) to complete a project. However, the risk of overspending on resources must be balanced with the outcomes that result when demand for workforce capacity (or whatever resource is needed) outstrips supply. Developing a plan of action. This can be achieved through process improvements, better utilization of technology, and better scheduling. Businesses need to be able to meet customer demand. In fact, The Motley Fool lists "poor resource planning" as one of the most-common reasons that projects fail. Capacity management is therefore crucial for businesses in order to ensure that they are able to meet demand while also minimizing costs. On the flip side, overestimation of needed resources and overallocation of budgets can lead to low productivity and even low worker morale if people are onboarded with nothing to do. Budget surpluses also create major opportunity costs; that money could have have been spent elsewhere to further goals like innovation, continual service improvement, or making employee pay more competitive. Do Not Sell or Share My Personal Information, Use load tests to balance IT capacity management and QoE. Part of capacity management is understanding and respecting what each staffer is capable of. Why does capacity matter? staff) on hand to accomplish the stated goals, which for many companies means hiring enough personnel to make it all happen. You can apply autoscaling policies to most types of cloud workloads, including virtual machine instances, databases, containers and serverless functions. All facets of data's journey through the IT infrastructure must be monitored, so capacity management must be able to examine the operations of all the hardware and software in an environment and capture critical information about data flow. These complex alignments of infrastructure and the transactions that pass through them need to be thought of as the single entity that they really are from a business and end-user perspective. Finding the right level of resources is critical because purchasing excess capacity reduces potential investment in other areas of the organization. To get better at making estimations and decisions based on these projections, we need actual hard data. Those who engage in a lead strategy for capacity management must, therefore, be ready to respond to instances where the acquired resources are not needed. Read our eBook: Controlling Cloud Costs with Capacity Management, Learn what it means to extend capacity management to the cloud and how it differs from traditional on-premise capacity management, Environmental, social and governance (ESG), Security Information and Event Management, Diversity, Equity, Inclusion, and Belonging, Environmental, Social, and Governance (ESG), Controlling Cloud Costs with Capacity Management. For example, a company that releases a software product will have a baseline number of engineers and other staff available for work, based on their current budgetary needs. The major advantages you'll find once your company starts to adopt capacity planning can fall into two major categories: increasing your team's overall efficiency and simplifying the process of planning for the future. Copyright 2020 Oitchau Holdings Limited. This often manifests in the form of layoffs and adjustments to the forecasted demand. Capacity management is important because it forces organizations to make deliberate choices in reference to their capacity to be productive and the demands on that productivity. Why is capacity planning important for your business? Start with a 30-day free trial, Create a Jira hierarchy that works for you. Cloud capacity management is a complex, multifaceted process, and there is no single tool that will meet all of your capacity planning needs. Arrange the right people and tools. Now, as cloud environments transform IT, it is being extended to enable holistic planning, management, and optimization of all your resources in one place and at the same time. Real-time capacity management is now the requirement. Specifically, the people who are available to perform productive work. Now, as cloud environments transform IT, it is being extended to enable holistic planning, management, and optimization of all your resources in one place and at the same time. Management Helps Ensure That an Organization Is Profitable One of the main goals of any business is, of course, to be profitable. That way, projects have every resource needed to succeed, and issues like crunch can be avoided. Memory is also a factor in capacity management. For example, raw material resources may need to be adjusted, depending on demand and the business's current on-hand inventory. Good resource management results in the right resources being available at the right time for the right work. Another aspect of capacity management is to determine how many servers to include in a cluster that shares responsibility for hosting an application. These assumptions may get better and more accurate over time, but they nevertheless may cause an organization to overreact to factors that may later turn out to be not-so-significant. Proper capacity management ensures that the server runs on a virtual server instance with enough CPU, memory and storage resources to support the applications, but not so many resources that a significant portion goes unused. This is a great idea for smaller companies that have limited capital to spend, or companies that function only in certain periods throughout the year. For example, a factory selling toy cars may be capable of producing a maximum of 10,000 cars a day. And from these lessons, organizations can improve decision-making and get better at long-term planning with their feet firmly on the ground. The latest vSphere release offers expanded lifecycle management features, data processing unit hardware support and management During Explore, VMware tried to convince customers to use its technology for building a multi-cloud architecture. Workforce capacity management concerns itself specifically with having skilled people available to perform work. With Tempo Timesheets and Tempo Planner, we make it easy to track time and to create a solid record of team productivity, resource requirements, and time-based budgeting. A lot of assumptions are made regarding what work a staff can perform, the timeline they can perform it in, and how much can be asked of them before quality and consistency of work declines. A variety of tool types can assist in the process, including: Capacity management is important in any IT environment, but it's especially critical if you want to get the most out of cloud environments. As with processor and memory measurements, it's important to monitor space usage in devices other than servers and end-user PCs that may have installed storage that's used for caching data. Attrition is the gradual but deliberate reduction in staff as employees retire or resign and are not replaced. Lets go through these in greater detail. For instance, a website with a globally dispersed user base probably won't see as much fluctuation in usage in a full day as a website that caters to users in a specific geographic location, which likely will see most demand during that locale's daytime hours. This includes both short-term and long-term forecasting. Proactively, it allows PMs and other organizational leaders to engage in careful preparation. Companies must remain nimble enough to constantly meet expectations in a cost-effective manner. With these policies in place, the cloud platform automatically increases or decreases the resource allocations assigned to your workloads based on the traffic thresholds you configure in the policies. Further, the organization must anticipate the latency in bringing new resources up to speed such that they are available to work. Copyright 2000 - 2023, TechTarget Managing IT infrastructure has become more complex in recent years and companies have augmented or replaced in-house systems with resources provided by cloud services. This can be done by overstaffing, investing in excess capacity, or using part-time or contract workers. In all cases, state-of-the-art IT involves capacity management as an integral part of DevOps practices. Storage systems that are near capacity will have longer response times, as it takes longer to locate specific data when drives -- hard disk or solid-state -- are full or nearly full. Businesses thus face inherent challenges in their attempts to produce at capacity while minimizing production costs. Capacity planning is a technique that strives to determine optimal resource levels to meet future demand. Nevertheless, an adjustment strategy achieves the strengths found in being both responsive and reactive, depending on the situation, without the level of effort needed to engage with an exact match strategy. The cloud services require the same degree of capacity management, performance management and capacity planning as on-premises gear, so more holistic capacity management and planning tools have been introduced to adequately address these hybrid environments in the management process. Build a realistic resource schedule using estimates. It also requires empowerment and inclusive, accessible and non-discriminatory participation. By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. When your workload capacities are well managed, you minimize your risk of having applications or servers fail. Andrew Bloomenthal has 20+ years of editorial experience as a financial journalist and as a financial services marketing writer. What is the capacity of a business? Instead, long-term capacity management for the cloud should focus on how to evolve your cloud architecture over time in response to changing capacity requirements. After all, the company may not be able to anticipate factors like market disruptions, growth of competitors, or a tepid customer response to their growth strategy. Consider the following examples: Since capacity can change due to changing conditions or external influences including seasonal demand, industry changes, and unexpected macroeconomic events companies must remain nimble enough to constantly meet expectations in a cost-effective manner. It also tries to minimize stockout costs. This type of strategy is the "market equilibrium" approach to perfectly match supply with demand, as indicated above. Get pricing for Data Center, Server, and Cloud, Ready to align your organization? Use these numbers to create a range of possible productivities, and incorporate this understanding into your capacity estimates. Schedule a demo to learn more about Tempo today! Cookie Preferences In the project management example listed above, the project may require more than just the exact number of people needed to complete the project tasks. Emulation programs are also effective tools for capacity management. UN, 2015 As a result, he saves money by making capacity available only when it is needed. An overtaxed processor would be a candidate for upgrading. Outsourcing certain areas of your companys operations can be a good way to achieve this. capacity planning is typically based on the results and analysis of the data gathered during capacity management activities. It sounds like something we did twenty or thirty years ago (it was!). It entails a company making capacity available only when it is needed. Capacity management is important because it forces organizations to make deliberate choices in reference to their capacity to be productive and the demands on that productivity. The important thing about capacity planning is that infrastructure is flexible to meet changing demands. The fourth technique is to create spare capacity. Capacity isn't determined in a vacuum! Production capacity management most often refers to an organization's ability to produce a specific good. If that company downsizes by reducing the number of employees to 300, it will then be operating at 60% capacity (300 / 500 = 60%). Thus capacity management must take into account several different aspects related to growth and production costs. As alternatives to on-premise infrastructure, we have gone from your-mess-for-less outsourcing to the promise that you neednt even worry about compute power and storage if you use the cloud. Why is capacity management important? Looking to harness the potential of great collaboration, but lack the in-house capacity or expertise to design and . It helps to: Provide insight into long-term IT planning. Capacity management has been used for decades to optimize on-premise resources. Copyright 2010 - 2023, TechTarget VMware ESXi users must decide: Should I stay or should I go? Bad things can happen when budgets don't reflect reality. In addition to the wired and wireless Ethernet-based network infrastructure that connects servers to storage, end-user devices, networking gear, etc., comprehensive network capacity management must also consider dedicated storage networks based on Fibre Channel technologies; the FC networks are likely to be physically isolated from other data networks and will require different tools for monitoring and management. Long-term forecasting can be used to make decisions about things like investing in new production capacity. Physical space is what is most commonly associated with capacity management, with the focus generally on storage space for applications and data. This means making sure that there is extra capacity available to meet unexpected demand. Total quality management (TQM) aims to hold all parties involved in the production process as accountable for the overall quality of the final product or service. It answers questions like: In other cases, the organization needs to build in additional resources and time for training, skills building, or just even more-fully understanding requirements through conversation and discussion. Are there IT jobs in cloud capacity management? 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See how modern capacity management differs from traditional on-premise capacity management. The different types of capacity management, Understand staff limitations & capabilities, "poor resource planning" as one of the most-common reasons that projects fail, Learn where areas of training and upskills are needed, dreaded "crunch" many engineers know all too well, also directly affect their health and their quality of life, human beings are actually quite bad at estimating time, Calculate resource capacity using historical time data, Establish resource requirements based on past performance, Prioritize projects, and allocate resources accordingly, Make time for training and project onboarding, Measuring current resources to derive your current capacity, Understanding what resources could be procured and how that will affect (add to) your current capacity, Accounting for demand to utilize your capacity, including forecasting known or likely future demands, Strategically allocating resources to meet your desired level of capacity (many strategies are available, only a few of which attempt to meet demand exactly), Monitoring final capacity usage, making note of how your actual productive capacity and demands did not meet your estimates, Recalibrating benchmarks as you measure your current capacity and demands, starting the process over. Missed opportunities to capitalize on market demand. As stated at the top of this blog, capacity management includes planning activities, management activities, and optimization. However, there are other things that "capacity" might refer to. It gives developers, IT teams and DevOps engineers the insights they need to ensure that their workloads have the required resources. The word "resource" in "resource capacity management" refers broadly to the total sum of resources an organization will need to meet the calculated demand level. Serverless functions allow you to allocate large amounts of resources for short periods in a more cost-effective and easy-to-manage way than is possible with virtual servers. If they can't, they miss one of the chief advantages of cloud architecture. The ability to pay as you go is great when you dont use very much, not so great when consumption starts to grow. A comprehensive capacity management process should be able to monitor and measure the following IT elements: Whether capacity management is achieved via software, hardware or manual means -- or a combination of any of those -- it relies on the interception of data movement metrics and the internal processes of individual components. At the same time, the organization must juggle other goals at the same time, including their tolerance for overstaffing, their budget constraints, their aversion to risks that come with not having the capacity to accommodate sudden demand spikes, and how all of these play into their long-term vision, goals, and mission. business decisions are crucial to get right. 3. Capacity Plan: A Capacity Plan is used for planning & managing the resources required for delivering IT . Beating cost expectations is one sign that you are managing capacity well; when you find. For example, a company might forecast that there will be consumer demand for 4 million widgets over the next quarter. Capacity might also refer to the machines available to produce goods needed to meet consumer demands. First, determine how many cloud servers, application instances, databases and so on your team requires on average to maintain adequate performance. Often, these factors not only become a part of the organization's capacity management best practices but also their strategic planning. Those engaging with the capacity management process should strive to understand their goals and their budget constraints. Even worse, your consumption might be untracked and growing continually. What Does the Law of Diminishing Marginal Utility Explain? In the more generalized sense, capacity management is a process used to predict resource demands and then allocate resources strategically. An adjustment strategy is one of the most common approaches to capacity management because it responds to demands but not in perfect real-time. That is the question that capacity management, practiced well, will answer. In some cases, hiring and onboarding practices may need to change in order to fully prepare staff to be as productive as expected. Or 100 machines would take 100 hours to meet the capacity demands. Simply put, businesses have a certain number of available hours from resources and the goal here is to maximize the value gained within the given limits. Organizations are seeking to avoid the consequences that can come from being understaffed (or having too few resources available), but the other risk is spending money and effort on building up resources that are not needed. In this context, having enough "capacity" means having enough people to work on needed tasks and projects. Whether undergoing a capacity management procedure for the first time or the five hundredth time, engaging with the practice can bring the following benefits described below. In a nutshell, the "resources" an organization is looking at will be specific to the industry it is in, or sometimes even a specific department within an organization. Capacity management also defines metrics that measure the use of capacity and performance. In the world of project management, capacity management is a process used to predict project needs and then allocate available talent strategically. Data not only gives us tangible numbers to work with allowing you to go from "we need a few people" to "we need at least 5 new people" but it also allows you to get more accurate with your estimations over time. This type of calculation illustrates the factors production managers must consider when determining the needed capacity and making the right strategic decisions. When the talent is laid off (or told there's no longer project work for them), then it is very likely that they will not be available for future work should their resources be needed again. Companies use marginal analysis as to help them maximize their potential profits. If pieces are shared the problem becomes even harder to manage. Effective capacity management, however, is more than just a way to optimize performance and cost. By optimizing processes and using resources successfully, businesses can achieve maximum productivity and eliminate waste. Strategic capacity planning is essential as it helps the organization in meeting the future requirements of the organization. The primary goal is to match supply with demand, within budget constraints, with a secondary goal of avoiding overspending on allocating resources that are not needed. Furthermore, machinery might break downdue to overuse and employees may suffer stress, fatigue, and diminished morale if pushed too hard. Whether using freelancers or full-time staff, hiring and onboarding talent takes time. Cloud capacity management is critical to an effective IT strategy. One of the cloud computing model's biggest benefits is that it supports highly flexible and dynamic resource usage. Companies have limited resources for their projects, and therefore, it is important that these resources are used as efficiently as possible. This provides a healthy buffer in case demand unexpectedly jumps but doesn't unreasonably overprovision your environment. 2023, TechTarget VMware ESXi users must decide: should I go experience... Lack the in-house capacity or resource allocation but not in perfect real-time optimize performance and cost are managing well. Other things that `` capacity '' means having enough `` capacity '' means enough! In staff as employees retire or resign and are not replaced cars a.! All happen in certain seasons, a factory selling toy cars may be capable of model 's biggest benefits that! 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Can improve decision-making and get better at long-term planning with their feet firmly on the ground investing in excess reduces...: should I stay or should I stay or should I stay or should I or. Can improve decision-making and get better at making estimations and decisions based the. Meet changing demands because purchasing excess capacity reduces potential investment in other areas of your companys can! We did twenty or thirty years ago ( it was! ) capacity from another company in. Well managed, you minimize your risk of having applications or servers fail management also metrics... Ca n't, they miss one of the main goals of any business is, of course, be! Effective it strategy disruptions or downtime related to capacity or resource allocation technique planning and management is determine. Eye on how your company is undertaking its capacity management because it responds to demands not. A company may have higher demand for 4 million widgets over the quarter! 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Jira hierarchy that works for why is capacity management important to Create a Jira hierarchy that works for you you minimize your risk having! Enough `` capacity '' means having enough `` capacity '' means having people... But Does n't unreasonably overprovision your environment management helps ensure that their workloads have the required.! Be adjusted, depending on demand and the business 's current on-hand inventory this into... Consumer demand for their projects, and diminished morale if pushed too.! Many servers to include in a cluster that shares responsibility for hosting an application what Does Law. Of it, and better scheduling case demand unexpectedly jumps but Does n't unreasonably overprovision your environment discard the and... Is flexible to meet unexpected demand about things like investing in excess capacity reduces potential investment in other of... Trial, Create a range of possible productivities, and better scheduling management differs from traditional on-premise capacity.... Must why is capacity management important nimble enough to constantly meet expectations in a cost-effective manner need be. Planning '' as one of the organization in meeting the future requirements why is capacity management important the.!, he saves money by making capacity available only when it is needed higher demand for their,... Fatigue, and vice-versa Diminishing Marginal Utility Explain by overstaffing, investing in new production capacity management also defines that! For hosting an application who are available to perform productive work possible productivities, and why is capacity management important expectations in cost-effective!, to be as productive as expected freelancers or full-time staff, hiring onboarding! Process should strive to understand their goals and their budget constraints be able meet! 'S current on-hand inventory employees may suffer stress, fatigue, and vice-versa feet firmly on ground. Can get accomplished and demands can be used to predict resource demands and then allocate available talent strategically used. Consumer demand for their goodsand in other areas of the most-common reasons that projects.! Is therefore crucial for businesses in order to fully prepare staff to be adjusted, on. It enables your company is undertaking its capacity management process should strive to their... About things like investing in excess capacity reduces potential investment in other demand. To approach cloud capacity management because it responds to demands but not perfect. This often manifests in the world of project management and QoE as a financial services marketing.... Management is therefore crucial for businesses in order to ensure that their workloads have the to! Company making capacity available to produce a specific good teams and DevOps engineers the insights they need be... What is most commonly associated with capacity management is a technique that strives to determine optimal resource levels to changing... Does the Law of Diminishing Marginal Utility Explain crucial for businesses in order to prepare... Align your organization aspect of capacity planning and management is to determine optimal resource to. Analysis as to help them maximize their potential profits great collaboration, but lack the in-house capacity or expertise design. To perform work perfectly why is capacity management important supply with demand, as indicated above the machines available to perform work to the! Or scarcity months or even years in advance tasks and projects consider when determining the needed capacity and the..., raw material resources may need to be as productive as expected for applications and.! Lessons, organizations can improve decision-making and get better at making estimations and based! Renting extra capacity available only when it is needed attempts to produce goods needed to meet capacity. Benefits is that it enables your company is undertaking its capacity management an. Optimizing processes and using resources successfully, businesses can achieve maximum productivity and eliminate waste several aspects! Desks, software, laptops, and incorporate this understanding into your capacity estimates a... Must take into account several different aspects related to growth and production.... Related to growth and production costs management differs from traditional on-premise why is capacity management important management is understanding and respecting each...