Demand Management: Three-Dimensional Existence

As with any well-chiseled, multi-functional techno-commercial aspect, demand management has broader scope for various scenarios and audiences. Below are the three-dimensional comprehension of demand management from an organizational perspective.

Even in its varying avatars, demand management has highlighted roles of maintaining a strategically aligned portfolio, reducing the gap between operations and marketing efforts of an organization, and as a method of controlling and tracking business unit requirements and internal purchasing operations.

Strategically Aligned Portfolio

Demand management is an organization’s process of collecting new ideas, projects internally, and needs while creating a portfolio, which is done internally. However, consideration must be given to the external market situation and the organization’s general strategy. Demand Management is a critical evaluation of ongoing activities. Direct Management is successful when the final output helps prioritize and select a valuable, strategically aligned portfolio. The more the process can capture the real strategic commitment of the organization and merge it with the past, ongoing activities, the more demand is a success factor in building the correct portfolio. (Project Management Institute, Requirements Management, Portfolio Management, Organizational Project Management)

Planning Methodology

Demand management is a planning methodology. Companies use it to forecast and plan how to meet the demand for services and products. Demand management improves connections between operations and marketing. The result is tighter coordination of strategy, capacity, and customer needs. (Oracle, Netsuite, Inventory Management)

Consumption Management or Strategic Spend Management

Demand management is a unified method of controlling and tracking business unit requirements and internal purchasing operations. It helps organizations remain engaged in their supplier relationships and related advantages. Organizations use demand management systems to address external spending factors, arrange purchase orders and eradicate waste. Demand management focuses on the volume of products purchased from providers rather than individual product pricing, in contrast to conventional sourcing initiatives. (Technopedia, Risk Management, Demand Management)