AKF Partners works with a large spectrum of companies in a wide variety of industries. Our work focuses primarily on companies that develop software-as-a-service Products, meaning that all or nearly all of our client’s revenue is generated with online products. On the other end of the spectrum are companies that have modeled traditional services that used to require a local office for sales and support but now can provide those services to anyone with a browser on a laptop, tablet, or phone—tech-enabled services.

Some companies we engage with consider themselves to be Product companies, but in truth, they do not manage themselves that way (yet). Product companies help define the market they serve, more than just serving the customers’ needs. Product Owners prioritize the initiatives the company will work on guided by key objectives set by the C-suite executives. Product teams function with self-sufficient autonomy to execute the work before them. Workflow is agile, nimble, and efficient.

A key premise in Product companies that feeds prioritization is the ongoing practice of Discovery. For an exploration of Discovery, and how even well-functioning Product teams get continuous discovery wrong, read this AKF Article.

This series of articles is for those organizations operating in Pure or Tech-enabled Services. These companies follow a more traditional flow of gathering the needs of their customers and engaging their workforce to serve those needs. We’ll discuss the management of demands that extend the use of existing products with new features or functions as discrete programs or projects.

Even successful companies often struggle to decide which programs and projects to work on. There are always more things to do than we get done.

Whether large or small, every organization encounters challenges in prioritizing
which initiatives to undertake with the resources it has available.

When a company is starting up, the decisions on what to work on are made by only a few people, and there are only a few people to do the work. Decisions must be made whether to work on product design or to work on establishing a marketing and sales plan. As businesses grow this challenge becomes larger and more apparent. Where one leader used to make all decisions, now multiple leaders each manage different functions. Differing opinions arise about what efforts deserve priority and resources. Choices within the organizational boundaries of one department may be simple. When an initiative requires the actions of multiple people or departments, the challenge is magnified.

Without a process to manage priorities and communicate them to all who have a stake in the work, common problems appear:

  • The organization lacks visibility to how priority decisions are made
  • Multiple lists and spreadsheets (or full-blown systems) exist to manage priorities
  • Nobody really knows whether the staff is working on the projects with the highest business priority
  • Requests for “small tasks or favors” come in through the “back door” and not via a defined process, eating up valuable staff time on things that are not likely a real priority
  • It is difficult or impossible to report on what every person is working on
  • It is difficult to redeploy resources from their current project to projects or tasks with higher priority

To complicate things further, new projects arise frequently, from a wide variety of sources. Executives launch new initiatives to open new markets. Customers ask for new products or new services. Almost daily customers demand new features on existing products. New technologies emerge that offer capabilities previously unavailable. Some projects come from within a company, as departments within an organization press for increased or changed functionality in systems used to support their work.

Those new projects must be prioritized against not only other new projects, but against the work that is already underway. New projects often appear to be of higher priority simply because the situation that gave rise to the initiative is fresh. Without a method to consistently weigh one project’s value against another, “decibel management” wins the day--the person shouting loudest (or most frequently) receives priority attention. Without a means to qualify the business value and quantify the costs to gain that value, priority decisions are frequently made on emotion alone.

In a supply chain—manufacturing and distribution—it is critically important to manage the supply of goods to match the demand for those goods. Demand Planning is a planning methodology used to manage and forecast the demand for physical products. In service companies, a similar concept is employed. Business Process Owners review the market desires/demands for software to meet a specific gap. Additional feature requests are added to meet new or evolving desires and needs, extending the use of existing products within the markets they serve or even expanding to new customers in new markets.

Demand Management describes the proactive management of work initiatives (demand) with business constraints (supply).

Demand Management aims to provide

  • Consistency of process through the project lifecycle
  • Clarity of what projects are in-process and what is in-queue
  • Communication of status and expected completion of projects in-process
  • Confidence that staff is working on the highest priority projects

A primary objective of successful Demand Management is removing emotion and ambiguity from the prioritization decision. The usual “High, Medium, and Low” ranking provides no value. Without a definition of what “High” means, one person’s High may be another person’s Medium. By applying consistent metrics and measures, we aim to bring clarity and consistency to making decisions. Regardless of who is providing the input on a specific project, the value perceived after completing the project should be the same.

We can view the Demand Management process as a funnel, capturing all the demands for resources to do work, and filtering them based on the value they expect to bring to the organization, the effort/time each project is expected to take, and other factors. Each level of the funnel contains fewer and fewer overall initiatives until we are left with a listing of all active projects—and a queue of projects next in line based on a consistent prioritization.

The Demand Management process is comprised of  several stages:

Project Intake

  • Manual or automated process of gathering new initiatives into the demand management queue

Qualification of Business Value

  • How does this initiative benefit the business?
  • Increased revenue or market share?
  • Decreased costs (higher margin)?
  • Increased productivity?

Quantification of effort to complete

  • What is the effort required, and by whom, to complete the project?
  • What is the organizational change impact of completing the work?
  • Internal costs (IT, new headcount, CAPEX, OPEX)
  • External costs (consulting, purchases)

Prioritization

  • Regular review of scoring by initiative
  • Review current priorities, make adjustments

Capacity Management

    • Maintain an inventory of skillsets and capabilities
    • Assign work within skillsets available
    • Manage timing and communication of projects' start-finish

    If your organization struggles with any of the challenges listed above, let AKF Partners help. Read on in this series of articles on Demand Management to learn about our thinking, our processes, and our approach. Then give us a call to help you make certain your organization is working on all the right stuff.