Management & Strategy

Managing Rising Demand

Find out how your businesses can prepare for unexpected demand without breaking the bank.

Seasonal peaks in trade such as Christmas and the January sales can upset even the most savvy predictions. You can either spend too much money to cope with exceptions and end up with systems that remain idle for the rest of the year, or you don’t spend enough and end up losing sales because your business can’t cope with the extra demand. In the past, businesses planned for exceptions by over-expanding their systems. They bought higher-capacity servers, set up additional telephone lines, and took on more staff. This often resulted in huge amounts of capital tied up in functionality that was needed only occasionally and goes to waste for the rest of the year. Until recently, the only way to reduce this over-capacity was to hire equipment and bring in seasonal and temporary workers. This solution can solve the problem, providing demand is predictable, but lacks flexibility when demand peaks quickly and unexpectedly. It's also expensive. Equipment rental costs are high, and bringing in trained experienced staff at short notice is prohibitively expensive.

Why do you need to scale quickly? 

One of the best examples of why you need to be able to scale quickly is the 2012 Olympics ticket re-sale site. When it went live in January, the re-sale site went down almost immediately as it failed to cope with the unexpected demand for tickets. It continued to suffer downtime throughout the year. While the site had no direct competition, the downtime still attracted negative headlines and affected the credibility of the organisers in the run-up to the event. While businesses can survive a temporary blip in performance, the impact of social networks like Twitter and Facebook can turn those temporary blips into damaging news stories. Would you visit a site if everyone was tweeting about how bad it was?

“Cloud services allow you to scale up and down without having to spend too much money on infrastructure and personnel that you may never use.”

One of the problems with unexpected growth is that it affects more than one system. Additional visits to your website will create more call centre enquiries, and social networking will quickly expose any poor service such as unanswered calls or slow responses. And by failing to keep up with the competition, you risk losing your current customers and frightening off any new ones visiting your site.

Cloud-based solutions

However, there are ways to deal with unexpected growth that enable businesses to scale up and down quickly and responsively, and to only pay for what they use. The answer is cloud. With cloud-based solutions, a business can add new call centre staff, telephone lines, and additional website capacity all with the click of a button.

Cloud services allow you to scale up and down without having to spend too much money on infrastructure and personnel that you may never use. Additionally, these services are available on demand and you don’t have to pay for the maintenance and service costs or worry about security. With cloud IT you only pay for what you use. If you need a new server for your website, you add the server as and when you want it.

It began with IT but the cloud service model is now expanding to encompass everything from HR to call centres. You can now add new staff to a virtual call centre to cope with additional demand in as long as it takes to write a call centre script. If you wanted to do this internally, you would use the internet to provide phone calls via unified communications. This way you can either add new telephone lines internally, or add additional remote staff with just a few clicks.

Turning demand into growth

Knowing you can cope with a spike in demand frees you to concentrate on growing your business. Just look at the example of mobile photo app business Instagram. When Facebook bought Instagram, in a deal eventually valued at around $735 million, they were a fast-growth business with a mere 13 employees. But Instagram’s growth skyrocketed following the announcement that Facebook were looking to buy. In the 10 days after the Facebook deal, Instagram welcomed 10 million new users. Without cloud, their systems would have crashed and burned; with cloud, they shrugged their shoulders and went on to add millions more users. While not every business can emulate such phenomenal success, it at least illustrates that should demand unexpectedly take flight, cloud systems can still keep your business running and help maintain your reputation.

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John Carroll - Helping businesses achieve International success. Head of Product Management & International Business, Santander UK