The adoption of cloud computing is a key differentiator for businesses today. The cloud offers numerous benefits, including scalability, flexibility, reliability, and accessibility. There are, however, potential downsides of cloud adoption, one of which is the risk of overspending.  

According to a recent Forrester study, as much as 30% of cloud resources are wasted. This misdirection can be attributed to multiple factors, including overprovisioning and inefficient use of resources, opting for unnecessary services, and an overall lack of visibility into cloud usage.  

What is FinOps?

FinOps is a relatively new management practice that has been growing in recent years. Designed to help organizations get the most value from their cloud investments by optimizing their cloud costs, the core principles of FinOps include: 

• Collaboration: FinOps requires collaboration between finance, IT, and engineering teams. This is because cloud costs are often incurred across multiple teams, and it is important to have a shared understanding and collaboration in order to optimize them. 
• Data-driven decision making: FinOps relies on data to make decisions about cloud costs. This data can come from a variety of sources, such as cloud billing reports, usage data, and historical data. 
• Continuous improvement: FinOps is an ongoing process. As cloud costs change, it is important to consistently monitor and optimize them. 

By following the FinOps principles, organizations are finding true solutions for optimizing their cloud budgets. Some of the benefits of FinOps include: 

• Reduced cloud costs by identifying and eliminating waste and inefficiency 
• Improved cloud efficiency through optimization of cloud resources and usage 
• Cloud costs that are aligned with business goals by making sure that cloud spending is synced with business priorities 
• Agile cloud spending by enabling the ability to quickly adapt to changes in cloud costs and business needs 

The goal of FinOps is to create a common language for a shared understanding of cloud costs and to develop a collaborative approach to cloud cost management. FinOps participants can aid organizations in getting the most value from their cloud investments by helping to establish a culture of consciousness, awareness, and engagement.  

The shifting dynamic from traditional software and hardware procurement to cloud-provisioned services creates a need for engineers to have a deeper awareness of the cost and impact that their deployments have on the business. Engineers are no longer able to focus only on feature-related development without including the return on investment (ROI) and return on value (ROV) of that feature in the calculation. 

Who Participates in FinOps?

FinOps is a cross-functional discipline that brings together teams from finance, IT, and DevOps to collaborate on cloud cost management. The specific roles and responsibilities of FinOps participants will vary depending on the organization, and may include: 

• Finance: Cloud Financial Analysts, Budget Managers, Cost Accountants 
• IT: Cloud Architects, Cloud Engineers, Cloud Administrators 
• DevOps: Cloud Developers, Cloud Operations Engineers, Cloud Security Engineers 

In addition to these traditional roles, FinOps teams may also include representatives from other departments, such as procurement, legal, and marketing. The goal of FinOps is to create a shared understanding of cloud costs and to develop a collaborative approach to cloud cost management. From implementing a cloud cost management strategy to educating employees about cloud costs, FinOps helps organizations gain the most value from their cloud investments. 

How Do You Start the FinOps Journey?

As with most business initiatives, enlisting FinOps for your organization will require a plan. Some of the pivotal steps within the process include: 

• Gaining executive buy-in: FinOps is a cross-functional effort, so it's important to get support from leaders across multiple sectors. 
• Assembling a team: You will need a team of people with different skills and expertise to be successful with your FinOps initiative. This team requires inclusion of representatives from finance, IT, and engineering. 
• Starting small: Don't try to do too much too soon. Start with a small pilot project and learn from your successes and failures. 
• Defining your goals and objectives: What do you hope to achieve with your FinOps initiative? Do you want to reduce costs, improve efficiency, or both?
• Creating a plan: Your plan needs to outline your goals, objectives, and the steps you will take to achieve them. 
• Implementing the plan: This is where the real work begins. You will need to track your cloud costs, identify areas of waste, and implement changes to improve efficiency. 
• Being patient: FinOps is a long-term investment. It takes time to see results. Don't get discouraged if you aren’t seeing immediate savings. 
• Measuring your results: It is important to track your progress and measure the results of your FinOps initiative. This will help you to determine whether your efforts are successful and where to make necessary adjustments. 
• Celebrating your successes: It is important to celebrate the traction made along the way. This will help to keep your team motivated and on track. 
• Continuously improving: FinOps is an ongoing process that will continue to evolve to make sure that you are getting the most out of your cloud investment. 

Bringing It Together

FinOps is a cloud financial management discipline that can help organizations optimize their cloud investments. Through the collaboration of teams, focus on efficiency, and elimination of what is unnecessary, organizations avoid overspending, improve cloud governance, increase cloud agility, and improve cloud visibility.  

In today's economy, it is more important than ever to have control over company costs. FinOps is a valuable and effective partner in getting the most out of your cloud investments.