As enterprises have looked to the public cloud in recent years, they’ve encountered a double-edged sword. While they benefit from improved agility and more flexibility to innovate rapidly, they also must navigate the unfamiliar and monumental task of aligning cloud spend to business initiatives and ensuring that costs don’t spiral out of control. As cloud environments become more complex, collaboration across departments plays a vital role in introducing more accountability among business leaders. Organizations must define and agree on best practices and guiding principles, key stakeholders and collaborators, and roles and responsibilities.

As defined by the FinOps Foundation, “FinOps is an operational framework and cultural practice which maximizes the business value of cloud, enables timely data-driven decision making, and creates financial accountability through collaboration between engineering, finance, and business teams.” By nature, it is a cultural practice in that it involves ownership and buy-in from cross-functional teams, many of whom hold responsibilities beyond basic cloud operations and may not have previously considered how their actions impacted cloud cost and usage.

All of these teams must remain accountable for their own cloud usage and follow the best practices defined by their organization’s Cloud Center of Excellence or similar function. At the end of the day, FinOps is all about ensuring that investment in the cloud is continuously managed and optimized such that it aligns with strategic initiatives and helps achieve business goals.

There are many important considerations for teams as they begin their FinOps journey, including (but certainly not limited) to those described below). Every organization will have different needs, histories, cultures, and stakeholders, so there is no such thing as a “one size fits all” approach.

Buy-In and Participation

It’s critical to identify the core and allied personas who will be involved in your FinOps practice from an early stage, as well as define the roles and responsibilities each will have. Your core team may include dedicated FinOps and cloud operations, but also finance, procurement, product, and engineering. You should also consider the involvement of security, sustainability, and IT asset management teams, in addition to anyone else who might need to stay informed of your organization’s cloud investments. Of course, it’s essential to have leadership buy-in and an executive champion to push forward a FinOps mandate, ensuring that your FinOps practice is viewed as a critical part of your business and not simply a one-time project to assess and cut cloud costs.

 
https://www.finops.org/framework/personas/ 

Goals and Key Performance Indicators

There’s no way for a FinOps practice to be successful without a clear definition of the goals to which the collective team will march or the KPIs that will help track progress. Goals should always be tied to the business as a whole – after all, FinOps is all about optimizing the business value of cloud investments. Metrics should be measurable and can focus on several things, from cloud spend vs. budget to resource optimization to cost per unit.

Processes and Operations

With stakeholders identified and goals defined, it’s important to understand the day-to-day activities that will lead to success, using the FinOps Principles as a guide. These principles are: 
•    Teams need to collaborate
•    Decisions are driven by business value of cloud
•    Everyone takes ownership for their cloud usage
•    FinOps data should be accessible and timely
•    A centralized team drives FinOps
•    Take advantage of the variable cost model of the cloud

An important starting point is making sure you have identified all the data sources you plan to ingest into your FinOps activities. FinOps simply cannot be conducted effectively without a complete view of your cloud data. Generally, this begins with public cloud accounts, but as you grow can extend into software licenses and even into the data center. From there, your FinOps practice can begin to analyze and manipulate your data for use in budgeting, forecasting, chargeback/showback, and reporting. They can also examine the data to determine appropriate tagging schema, optimization and sustainability strategies, and governance and compliance requirements.

Tools and Services

It’s critical to equip your FinOps practice with the tooling that supports them across the FinOps Framework. The FinOps Framework provides the operating model for how to establish and excel in the practice of FinOps. It includes four domains that describe the fundamental business outcomes organizations should achieve:

1.    Understand cloud usage and cost
2.    Quantify business value
3.    Optimize cloud usage and cost
4.    Manage the FinOps practice

Your FinOps team needs the ability to get granular insight into cloud cost and usage data, quantify the business value returned from cloud investments, optimize cost and usage effectively across clouds and services, and provide governance structures and guardrails that help keep your FinOps practice running effectively with policy enforcement and automation. Some vendors offer technical account management and professional services beyond technical support, which can be critical to getting the most out of our chosen solution and even take some of the burden from your FinOps team with valuable consulting services.

 
https://www.finops.org/wp-content/uploads/2024/03/FinOps-Framework-Poster-v4.pdf 

Feedback and Continuous Improvement

A FinOps journey never really ends, but instead is a continuous cycle of planning, execution, and improvement. There are always ways to improve how your FinOps practice fosters effective communication and collaboration. Reporting and shared dashboards can continuously be refined and tailored to the various personas involved in your FinOps practice so that the most important trends or potential cost overruns. Many organizations also conduct benchmarking, comparing themselves to others in their industry or peers with similar profiles to understand where they have room for improvement. And of course, certifying and recertifying your teams with the FinOps Foundation ensures that they are always up to date on the latest best practices.

CloudHealth is the most trusted multi-cloud FinOps platform that drives awareness to action, helping organizations make sense of their cloud data, optimize and control cloud spend, and enhance their cloud management practice. More than 22,000 organizations globally rely on CloudHealth to optimize and govern over $24 billion in annual multi-cloud spend. Additionally, hundreds of partners globally depend on CloudHealth to power their cloud service delivery, accurately bill and invoice customers, and manage the health and profitability of their business at scale.

Known for offering the highest levels of data integrity and scalability, CloudHealth enables enterprises and managed service providers to deliver higher quality products and solutions faster while keeping costs under control across on-premises, public, hybrid, and multi-cloud environments. It powers FinOps teams and accelerates their practice by instilling confidence in every optimization activity and establishing a culture of accountability and collaboration.

CloudHealth is a full-cycle FinOps solution, in that it supports FinOps teams across all three FinOps phases:
•    Inform: gain granular visibility into your cloud usage and cost while allocating cloud spend to relevant teams based on relevant business groupings like CloudHealth Perspectives
•    Optimize: reduce waste and optimize existing spend and usage by taking advantage of CloudHealth’s multi-cloud and Kubernetes optimization recommendations
•    Operate: keep your environments in their ideal state with policy-based governance and automation, and take control of access and permissions across multiple levels of organizational hierarchy
With CloudHealth, your FinOps team will be empowered along their journey to deliver across the four FinOps domains of understanding cloud usage and cost, quantifying business value, optimizing cloud usage and cost, and managing the FinOps practice.

It’s important to remember that your organization’s FinOps practice will always be evolving, much in the same way that FinOps itself is constantly evolving. For example, new initiatives focused on “FinOps beyond public cloud” are being discussed more frequently, especially as organizations find their desired hybrid cloud balance. 

With CloudHealth, you can ensure that your FinOps practice evolves with the evolution of the practice of FinOps, empowered your team to deliver across the four FinOps domains of understanding cloud usage and cost, quantifying business value, optimizing cloud usage and cost, and managing the FinOps practice.

Learn more about building and powering a FinOps practice and cloud service delivery with CloudHealth. Contact us today.