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SETLabs Briefings
VOL 7 NO 1
2009
Is Performance Engineering
Primarily a Business Issue?
By Bruno Calver
Maximize your ROI by entwining business
perspective into performance engineering
P
erformance engineering can be a time
consuming, complex and costly activity.
Projects can stumble on functional requirements
besides the usual fret over non-functional
requirements. In addition, clients are increasingly
nding the cost of stress testing tools and live like
test infrastructures prohibitive.
It is the joining up of business strategy,
priorities and operational practices at the outset
that will define the success of performance
engineering activities as much as the skill with
which they are executed. More importantly there
are other ways to address performance challenges
than a purely technical approach, like demand
management. It is all about understanding the
full range of options to ensure maximum return
on investment.
This paper draws on industry best
practices such as the Information Technology
Infrastructure Library v.3 (ITIL

) and research
from Forrester

to help business clients navigate

their way through the various challenges that are
presented by service performance and business
expansion.
PERFORMANCE = CAPACITY
The rst step in understanding performance
engineering is to look at the problem rst from
a capacity, rather than traditional performance
engineering perspective. Assuming that a
service is built to specification, there is no
change in usage patterns and data is properly
archived, it is hard to imagine what performance
issues might arise in an operational context.
The point here is that it is the business that
changes and presents the challenge to service
performance.
Think of it like a bus service. If commuters
suddenly increase or change their scheduled
time of travel then the bus service might struggle
to accommodate all the passengers. This is a
capacity problem. The bus is just not big enough
however fast it goes. Providing more buses at
peak times is disproportionally expensive as the
overall utilization of the eet is likely to fall, the
same is true of IT systems.
This indicates that the first step in
performance engineering is to understand the
business requirements. The key to the ongoing
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success of managing performance rests on how
well changes, or planned changes, in the business
are monitored, understood and communicated.
This operational bit is something that is often
missed and can present the greatest challenge.
This paper will focus on how business can
articulate its capacity requirements and
how it can manage its needs on an ongoing
basis in order to achieve the best return on
investment.
ITIL VERSION 3 AS A STARTING POINT
ITIL version 3 can help provide a foundation to
address the challenges already outlined. First,
the new lifecycle model introduced as part of
version 3 of the best practice guide addresses
both the initial gathering of requirements at a
strategic business level as well as the on-going
work required to monitor the service strategy.
Supporting the direction set by the business
is then delivered by the well established ITIL
process of capacity management, as was already
present in version 2, although updated and
tted into the lifecycle model in version 3.
The goal of the capacity management
process is to ensure that cost-justifiable IT
capacity in all areas of IT always exists and is
matched to the current and future agreed needs
of the business, in a timely manner [1].
There are three sub-processes that are
worth mentioning that support the overall
capacity management process:
Business Capacity Management Takes
agreed business requirements and translates
them into IT service requirements
Servi ce Capaci t y Management
Focuses on the management, control and
forecasting of the end-to-end performance
and capacity of the operational service
Component Capacity Management
Looks at the performance and capacity of
individual technical components.
Figure 1 might help visualize where each
of these sub-processes t into the overall picture
in a reasonably typical IT environment. Figure 1
shows that business capacity management sits at
the top of the hierarchy. If the direction taken by
the business is not properly dened, understood
and communicated then all of the other aspects
of capacity management are made that much
more difcult or indeed defunct. Given the fact
that capacity management is perceived to be an
extremely technical, complex and demanding
process [1] there is little room for making
mistakes in understanding the requirements, as
they are likely to be costly.
From an ITIL version 3 perspective,
business capacity management derives its
requirements from service strategy and service
portfolio management, both being part of the rst
stage of the service management lifecycle. These
sections provide some excellent guidance in their
own rights and will indeed generate many capacity
requirements. The question is how much to invest
in an ITIL based capacity management process?
THE BUSINESS FILTER
The rst step is for the business to determine the
criticality of any planned or existing service. This
sounds simple, but ask any business manager
if their service is the most important and their
rst response is yes. How do you make sense
of all the yes responses that exist within the
organization? Application scoring mechanisms
give CIOs a rating mechanism that can help them
reallocate maintenance dollars to the highest-
priority applications while starving commodity
applications [2]. Such an approach can be
customized to the capacity management process.
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Application scoring is all about using a
objective method to prioritize and score service
in order to provide funding and resource to th
most critical and valuable IT services. There ar
four dimensions to the scoring system:
Business perspective
Application perspective
IT perspective
Vendor perspective
Score based questions in each of thes
categories in relation to capacity managemen
will help guide funding and effort levels allocate
to different services, particularly those that ar
already in operation.
The business perspective should assess th
criticality of the service to the business in factua
terms with queries like how much revenue is tie
to the service? Is it customer facing? How man
n
s
e
e
e
t
d
e
e
l
d
y
employees use the service? What is the impact
of delays or poor performance of the service on
business? A high score would mean that the service
is of critical importance to the business.
The application perspective looks at
some of the technical aspects of the service with
queries like how big is it? How easy is it to
scale? How complex is the service? How many
external dependencies does this application have
that affect performance or capacity? A high score
shows that the application or service is large,
technically complex and likely to be dependent
on a number of external services.
The IT perspective will capture concerns
like what is the availability of skills to work on
the service? Does the service align to the ongoing
IT strategy? Is the platform stable? How easily
are technical issues resolved? A high score would
indicate that there is little internal capability to
manage and develop the service.
Figure 1: Capacity Management Process Map in Relation
to IT Services
Source: Infosys Experience
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Finally, the vendor perspective should
focus on the roadmap for the service from the
suppliers perspective, particularly in the context
of off the shelf products. Vendor perspective will
address queries like is this a key service for
the vendor? Does the vendor provide a tried and
tested capacity roadmap? Do the future plans for
developing this product align with the business
needs? A high score would reect poor vendor
support and roadmap alignment.
It is worth noting that low scores in the IT
and vendor dimensions not only suggest additional
focus is required in terms of capacity management,
but the solution needs to be seriously reconsidered
for projects at the point of inception.
The scoring system should be kept simple
and should align to the business priorities and
key technical questions vis--vis performance
and scalability issues. Each of the questions can
be weighted in order to enable the business and
technical teams to rank the relative importance of the
various questions. A 3-2-1-0 scoring mechanism is
advisable as it is simple and does not have a neutral
score and therefore forces a particular judgment.
The outcome of such an exercise will result
in a score against each dimension. The scores are
then combined to enable a matrix to be created as
per Figure 2.
The next stage is to develop some bands
of service that can be matched to the position a
given service resides within the matrix.
Figure 2: Capacity Management Scoring Matrix
Source: Infosys Research
PROVIDING A BANDED CAPACITY
MAANGEMENT PROCESS
Here it is worth referring to a seminal paper by
George I. Thompson Six Levels of Sophistication
for Capacity Management [3]. The author looks at
a variety of activities and approaches of capacity
management within an enterprise environment
and identies different levels of maturity. This
paper also recognizes that business criteria is a key
factor in the most mature capacity management
processes.
For the purposes of this analysis it is best
to consider the application of just three of the six
levels proposed by George I. Thompson:
Level 1 Formally measure, trend and
forecast peak period utilization and
plan resource capacity with an on-going
periodic review program.
Level 3 Includes an automated workload
forecast system. Either looks at single
attributes or in an advanced form enables
forecasts by different categories.
Level 5 - Use business application criteria
with an application model to predict
service levels and forecast resource usage
requirements.
In line with Thompsons suggested levels it
is proposed that services that fall within quadrant
1 of the scoring matrix take the approach dened
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by level 5 to capacity management. Quadrants 2
and 3 should be managed using level 3 service.
Finally, quadrant 4 services should be managed
on the basis of level 1.
These levels should also be expanded in
two ways. The rst is to include the type of test
infrastructure required to support each of the
services where the highest level will surely need
the most live like test platform. The second should
be to dene the levels in terms of the ITIL version
3 capacity management process.
THE DEMAND SIDE OF CAPACITY
MANAGEMENT
So having looked predominantly at dening the
supply side of the capacity management equation
it is time to turn our attention to the demand side.
The supply-demand split is becoming a signicant
trend within the IT industry [4].
One aspect of demand management is to
understand the incoming business need. When
the business does decide that they want to grow
or extend a function they need to consider how
they might best do this. IT is not always the most
cost effective solution.
This is where incentives and penalties to
inuence consumption can assist in providing
economic capacity solutions. Figure 3 puts this
into context in relation to previous points.
Figure 3: The Service Demand Belt Source: ITIL version 3 Service Strategy
Crown copyright 2007 Reproduced under license from OGC
By introducing a nancial aspect to the
consumption of services that accurately reects
the additional cost of capacity, it creates a market
based system that makes sure that additional
capacity has equal or greater business value than
its cost. For example, the cost of capacity can be
varied according to the time of use and lower off-
peak charging can assist in utilizing an otherwise
unused capacity.
In addition, thresholds of capacity could
be determined so that capacity above a certain
level has a progressively higher marginal cost.
It is, however, critical that any such charging
model reects the real cost of provision and is
transparent and fair, or else the costs and benets
become distorted.
SOME WORDS OF CAUTION
It is important to understand the likely potholes
en route navigating your way along the capacity
management road, especially in terms of using
an application scoring approach as well as using
charging mechanisms to control demand. The
rst and most signicant issue is that an objective
approach to understanding and prioritizing
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applications and services can challenge the status
quo within an organization. This can lead to
strong political challenges and make designing
and deploying the framework a tricky affair as
it might disrupt traditional priorities and budget
structures.
Next is the challenge of implementing an
effective charging system. A full-edged nancial
management and chargeback system needs to be
in place for demand management to be effective.
As mentioned earlier, any charging system
needs to be perceived as fair. This is especially
troublesome where measuring the use of a service
or application by different business units or users
is difcult or impossible.
Finally, capacity management will need to
accurately predict the additional cost of capacity
and build this into the charging mechanism.
This in itself can be a signicant effort or yield
inaccurate results that will affect any cost/benet
analysis.
CONCLUSION
Understanding and managing how capacity
management is supplied and demanded is critical
to ensure the extraction of maximum value from
the process. This is not to distract from the highly
technical aspects of performance engineering,
but is to be seen as a crucial step to ensuring that
such activities are focused in the right areas and
for the right reasons.
Using ITIL version 3 as a foundation for
capacity management and bringing together
other frameworks to determine how it is to be
applied, offers organizations a powerful lens
to have a view of the landscape. This paper has
shown that performance engineering should
start as a business question and the subsequent
answers then lay the foundation for any technical
activity.
REFERENCES
1. ITIL version 3, Service Design, Ofce of
Government Commerce (OGC), UK, 2007.
Available at http://www.ogc.gov.uk/
guidance_itil_4899.asp
2. Phil Murphy, Laurie M Orlov and Lauren
Sessions, CIOs: Reduce Costs By Scoring
Applications Lower Maintenance Costs
And Change IT Demand Governance,
2007. Available on www.forrester.com
3. George I Thompson, Six Levels of
Sophistication for Capacity Management,
Computer Measurement Group, 2000.
Available on www.cmg.org.
4. Christopher Koch, Why IT Executives
Split Staffs to Create Supply, Handle
Demand for Technology Services, CIO,
2007. Available at http://www.cio.com/
article/print/121150.
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Author Profile
BRUNO CALVER
Bruno Calver is a Consultant with Infosys Infrastructure Management Services, specifically part of the Process
Consulting Group. He can be reached at bruno_calver@infosys.com.