However regrettable this tunnel vision may be, it is totally understandable, because that's how the traditional IT business model and its client/vendor relationship works. IT focuses on managing supply, because that's its mandate; managing demand is unclear, and in the absence of proper governance, it defaults to a business problem on the customer's side. Projects are therefore usually approved based more on business sponsor influence -- or putting it less charitably, decibel management, or catering to those executives who shout the loudest -- rather than on any rational decision-making process. This might appear to be a rather harsh indictment of the demand chain in the average IT department today, but unfortunately it corresponds to reality. Far from being the rational and structured process we would like it to be, demand management is usually a nebulous combination of decibel management and organizational politics, significantly amplified in international organizations when country politics and cultural differences are thrown into the mix.

Once projects have been delivered, the absence of rational demand management becomes even more acute. While you can usually count on business executives to obtain the funding to launch projects, the same is rarely true to fund the resulting applications after delivery. This is usually because the executive sponsor has either moved on (often as a result of the project's success -- or failure) or is far less motivated to go and bat for operational funding, which doesn't have the same visibility and organizational rewards as launching a new project -- especially when, as is usually the case, the magnitude of the ongoing funding was not part of the original business case.

For example, a marketing director at a pharmaceutical company had little problem obtaining significant funding for a sales force automation (SFA) project. A month after the implementation however, he moved on as part of a company reorganization. In the absence of a business sponsor, the maintenance budget for the following year was next to nothing, which seriously impacted usage because significant further enhancements remained to be done -- which, needless to say, was not part of the original business case.

So demand management is clearly the missing link in most IT departments. Yet any successful business model by definition has to be built on the effective management of demand as well as supply.

Using the fundamental premise that not all demand from the business will be approved -- because of business priorities on the one hand, and IT resource and scheduling constraints on the other -- the best way of representing demand would be via a funnel. Demand from the business enters at the top, follows one or more decision-making processes, and then either exits at the bottom as approved work to be executed, or remains in the pipeline pending further evaluation.