There is no doubt that the cloud has become the go-to operating model for organizations in the digital age. Yet, the high costs associated with cloud spending and resources are often far more than most organizations planned for.
Recent studies have shown that IaaS (Infrastructure as a Service) spend is expected to reach $190 billion in 2025, and AI/ML costs are impacting 45 percent of organizations. For these reasons alone, it’s no surprise that many organizations are searching for ways to decrease spending and optimize cloud costs through FinOps consulting. Many have realized that growing expenditures on the cloud can be wasteful, prompting a need to reduce unwanted expenses without sacrificing performance.
But how are organizations planning to cut cloud costs while maintaining effectiveness?
The answer is clear: FinOps.
What is FinOps?
FinOps, short for Financial Operations, is a cloud financial management practice that combines the principles of DevOps and financial management to optimize cloud spending and maximize business value. The focus is on creating collaboration between engineering, finance, and business teams to develop a data-driven, cost-conscious culture around cloud usage.
What You Need to Know About FinOps Before Getting Started
FinOps is not just about cutting costs, but enhancing collaboration and value from existing teams that are not typically working together. There are several key points to consider before getting involved with FinOps. These include:
1. FinOps is a team sport.
In order to be successful with FinOps, you need collaboration across many stakeholder groups, not just the FinOps team. There are a variety of personas that need to be involved that represent organizational functions involved in using, tracking, managing, or directing cloud usage. These personas typically include the following groups:
2. Collaboration drives value.
Once you have identified the personas within your organization, it’s important to understand that all personas can benefit from working together under the FinOps framework as the shared operating model. This can scale by organization size. For instance, in large enterprises, one persona may represent multiple people or even entire departments. In small organizations, one person may fulfill multiple personas.
It’s important to note that core personas are always involved as these groups provide essential disciples needed for effective cloud usage. Each persona provides a unique perspective and is a vital part of the project. While the persona roles may differ in challenges, metrics, and desired outcomes, it’s essential to remember that all persona groups contribute equally to the organization’s FinOps maturity.
3. Using proven methods will help achieve the greatest outcome.
The “Crawl – Walk – Run” method is a phased approach to helping establish successful FinOps programs. This method involves breaking down larger tasks into smaller, more manageable stages to allow for better learning and adaptation as well as continuous improvement along the way. Here’s an example of what this might look like when implemented.
Stage 1: Crawl
Individual Understanding
- Separate data sources
- Frameworks
- Goals
Stage 2: Walk
Shared Understanding
- Cost Transparency
- Cost Optimization
- Cost Allocation
- Showback/Chargeback
Stage 3: Run
Common Taxonomy
- Standardized data sources
- Common language
Common Toolset
Consistent / Standardized Processes
4. Successful FinOps programs follow three proven phases.
FinOps progresses iteratively through three phases: Inform (visibility), Optimize (efficiency), and Operate (governance & culture). Your organization may work in different phases simultaneously, continuously seeking improvement and empowering change. Here’s a look at what occurs during each of the phases:
- Inform Phase
This phase focuses on collecting accurate cloud cost and usage data to enable budgeting, forecasting, and benchmarking.
- Optimize Phase
During this phase, the data collected is used to right size resources, eliminate waste, and maximize savings from discount programs.
- Operate Phase
This phase embeds FinOps into daily operations via governance, compliance, training, and cross-team collaboration.
The most successful programs have continuous cycles through each of these phases to refine strategies and workflows that result in a mature, accountable, and effective FinOps practice.
Financial Operations Runs More Efficiently With the Right Partner
When it comes to implementing FinOps, it’s not just about reducing your cloud spending costs— it’s about maximizing your cloud investment through collaboration, transparency and increased efficiency across historically siloed teams.
CleanSlate is a leading AWS Consulting Partner specializing in building modern applications and products that move businesses forward. With over 80 Certifications and over 100 Accreditations including AI/ML, Engineering, Architecture, Security and Data, CleanSlate is able to ensure that your FinOps approach to cloud optimization is proactive, not reactive and produces the results you are looking for.
Contact us to learn how we can help you establish a FinOps program with resiliency today.
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