TALKING

FinOps is a public cloud management approach that aims to control costs . It provides IT , DevOps , CloudOps , finance and business teams with continuous cost optimisation tools and accurate costings of cloud resource usage .

It should be noted , however , that FinOps isn ’ t only about reducing costs . The approach aims to support the best cloud spend that maximises the value of all necessary computing resources .

The key principles of FinOps

To ensure the best results are achieved , it ’ s important for an organisation to establish and adhere to a range of key FinOps principles . These include :

• Cross-team visibility : It ’ s important to ensure all teams within an organisation have granular visibility into cloud usage and spending in real time . Costs should also be mapped to business units for better reporting and budget allocation .

• Usage ownership : Continuous , automated policybased compliance should be established for all teams throughout all cloud platforms . This helps to prevent overprovisioning , underutilisation and hidden costs .

• A FinOps culture : Senior management should work to create optimisation strategies with realistic goals for each team across the organisation . Also , benchmarks should be included for stakeholders together with best practices that support the organisation ’ s anticipated growth .

Rising importance

Experience shows that the value of FinOps lies in its potential to help organisations achieve smart , costefficient cloud spending . Unfortunately , however , a recent study by from McKinsey & Company found that enterprises often don ’ t develop at-scale FinOps capabilities until their spending on cloud resources reaches $ US100 million a year . This clearly means that many are waiting far too long to adopt the strategy .

Indeed , taking a wait-and-see approach can actually end up being more costly . It involves a greater effort to transition teams from a datacenter approach to a costeffective cloud consumption mentality .

The McKinsey study also found many FinOps teams focus largely on operational tasks and contract management . High-impact strategic cloud initiatives , however , may add more value .

Such initiatives can include the introduction of the concept of cloud-unit economics . This involves assessing the cost of every transaction in the cloud on a per-unit basis to reveal the business value of the current cloud spend .

FinOps teams can also undertake consumption forecasting . This involves taking steps to evaluate and predict future cloud spend based on existing usage rates .

The teams can also undertake behavioural change management strategies . This involves establishing a FinOps culture that supports buy-in from all stakeholders , as well as metrics that all teams understand and use .

Achieving maximum benefits

As well as optimising cloud usage and reducing costs , an effective FinOps strategy can provide a range of other business benefits . These include Driving business innovation by freeing resources for new projects and enabling trust and increased collaboration among teams .

A FinOps strategy can also help to prevent cloud sprawl and overprovisioning of cloud resources while also improving financial responsibility of teams and the organisation as a whole . Increasingly important is its ability to support enterprise endeavours by optimising digital architectures as well as providing the insights to support reducing carbon footprint and contributing to ESG programs .

Overcoming challenges

While it delivers significant benefits , undertaking a FinOps strategy can also create some challenges .

Rafi Katanasho , APAC Chief Technology Officer , Dynatrace

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