7.3. A Capacity Planning Situation
An online auto-buying service just launched its site and is seeing the number of requests to the site grow at a very fast rate. While this is good news, management is concerned that pretty soon performance may degrade and customers may move to other sites. In particular, management is considering several new initiatives, described below, and they want to know how these initiatives will impact the IT infrastructure. Answers to questions such as "Will the IT infrastructure support an increase in traffic?" "What kind of changes should be done in the IT infrastructure to support new services and new business models?" "Will there be very large delays?" "Will there be a need to upgrade the configuration?" "How? By adding more servers? Increasing the bandwidth?" need to be obtained.
A very expensive marketing campaign is about to be released. It will consist of TV ads as well as ads in the Sunday edition of the major newspapers around the country. The marketing department, based on conversations with its advertisement agency, has three estimates on the number of people reached by these ads: a pessimistic, a realistic, and an optimistic estimate.
Currently, the online dealer has four thousand affiliated dealers, less than one-fifth of the auto dealers in the US. Management wants to launch an aggressive plan to sign up ten thousand new dealers in the next year.
The dotcom auto dealer is considering changing the way it does business. Currently, customers only have access to vehicles available at one of their affiliated car dealers. If a sale takes place through the online service, the dealer pays a fee to the online service. The new model under consideration is an auction-based one. Customers would be able to configure the vehicle they want by selecting make, model, year, mileage range, options, color, and price range according to the Kelley Blue Book, a publication that keeps track of prices for new and used vehicles. Any of the affiliated dealers would then be able to bid on the request.
The board is also considering a proposal to extend the scope of the site to that of a portal for vehicle-related issues. New services would include brokering car insurance and car financing services, and providing links to car trade magazines and allowing customers to search for articles on cars by keywords as well as providing access to several types of vehicle rating and evaluation services.
Another proposal calls for extending the site's multimedia capabilities for luxury vehicles. Customers would be allowed to see video clips showing details of the car's interior, trunk, and engine compartment as well as a virtual test drive in different road conditions.
The various initiatives described above require that a capacity planning methodology for e-business be strictly followed. In the next section, we present an outline of the methodology and provide details of each step in the subsequent sections. We use the online auto-buying service example to illustrate how the various steps are carried out.