THE IMPORTANCE OF CAPACITY PLANNING
At the end of 1997, Oxford Health Plans posted a $120 million loss to its books. The company’s unexpected growth was its undoing because the system, which was originally planned to support the company’s 217,000 members, had to meet the needs of a membership that exceeded 1.5 million. System users found that processing a new-member sign-up took 15 minutes instead of the proposed 6 seconds. Also, the computer problems left Oxford unable to send out bills to many of its customer accounts and rendered it unable to track payments to hundreds of doctors and hospitals. In less than a year, uncollected payments from customers tripled to more than $400 million, and the payments owed to caregivers amounted to more than $650 million. Mistakes in infrastructure planning can cost far more than the cost of hardware, software, and network equipment alone.
If you had been in charge of the Oxford project, what things would you have considered when planning the system capacity?