What Is Demand Management?

What Is Demand Management?

Demand management is a process that aims to align the needs of clients with the capabilities and financial interests of an organization. Demand management is key for professional services teams because it seeks to address and anticipate client requirements while minimizing risk and disruption to your organization. 

Increasing profits is a natural goal for professional services firms motivated to maintain high client retention rates. Research shows that increasing customer retention rates by just 5% can lead to a 25-95% increase in profits. This is why leveraging your firm's resources to deliver value to customers in the most efficient way possible should be a top priority for your organization. 

A poor or non-existent demand management process can lead to poor prioritization, where unwisely deployed resources inadvertently create bottlenecks in other project pipelines. It can also lead to over-extended, overutilized, and burnt-out workers. This can negatively impact the on-time delivery and overall health of other projects in a portfolio.

What are some demand management best practices?

1. Plan

This can involve analysis and projection based on historical data of trends or conditions that have previously impacted business activities — also known as forecasting. Planning will also generally include looking ahead at business goals and determining how to apply resources to pursue these goals. Demand planning should also consider risks. 

2. Communicate

As R.K. Sharma explains in “DEMAND MANAGEMENT: Supply Constraints and Inflation” (2009), communication “makes or breaks the demand management process.” Clear communication across departments and to clients about what is required and what can be delivered is crucial.

3. Prioritize

Planning, forecasting, and communicating are pointless if they do not result in a strategic approach to prioritizing projects. Utilize knowledge of available resources and client requirements to determine how to increase profits with the most efficient deployment of resources.

Forecasting and leveraging visibility into employee workloads can help ensure a thorough and strategic resource process. Wrike’s tools are ideal for capacity planning and demand management — view team workloads, generate reports, automate tasks, and more.