Financial Management

Three Things I’ve Learned About FinOps (So Far!)

Need a refresher on what FinOps is?

FinOps is an evolving cloud financial management discipline and cultural practice. FinOps is a combination of “Finance” and “DevOps” stressing the communications and collaboration business and engineering teams.

For more details, read our blog “What is FinOps?” and check out our infographic below.

FinOps is the hot trending topic this year in cloud management.

Since its start in 2019, the FinOps community continues to grow in size and expertise – the foundation now entails more than 5,300 members and 1,500 represented companies coming together to share best practices in cloud financial management. This past June, the FinOps Foundation launched their first official event of FinOps X (CloudHealth was a proud sponsor and speaker – watch our session Creating a Culture Focused on Governance!) and continues to make an impact on the cloud community with best practices for cloud spend accountability and usage.

With the FinOps movement growing – the FinOps Foundation itself and FinOps practitioners – I think it’s important to share our own FinOps best practices and knowledge checks. After completing the FinOps Certified Practitioner course and continuously following what’s new with FinOps, I want share what I’ve learned (so far!) and hopefully add some discussion points to the FinOps conversation.

Three things I’ve learned about FinOps:

  1. Visibility leads to understanding
  2. Accountability is empowerment
  3. Culture matters

Visibility leads to understanding

Cloud spend can easily rack up and get out of control quickly; many find that the cause of this is limited visibility into their cloud.

The first step in gaining control of your cloud is seeing how much your spend is – by timeline, by team, by project, etc. – to understand where the costs are coming from. The next step would be to cross compare cloud spend and cloud usage. Are you utilizing your cloud to the fullest? Are you are wasting dollars to run instances that aren’t being used? Are there areas to optimize your cloud usage to limit cloud spend?

It sounds like a simple concept – have visibility into your cloud – but without the right tooling, it’s complicated and tedious manual work to look at rows and rows of cloud billing and data (and leaves too much room for error). This is where CloudHealth can help you.

The bottom line is that if you don’t have the visibility into your cloud, you will not fully understand the real cost of your cloud.

Accountability is empowerment

Everyone should care about cloud costs, not just the finance department and executives. Developers, engineering, business operations, and IT (and finance and executives!) need to know who is spending what in the cloud – especially when it so easy to buy with a click of a button. When cloud spend gets out of hand, the outcomes can be dire to the teams and the business with budgets slashed, projects put on hold, and sometimes personnel being cut.

I’m not suggesting finger pointing and playing the “blame game” is the reason accountability can empower teams. It’s easier and more productive to go from bottom up than top down when tracking cloud spend. For example, if finance reports to upper management that an engineering team is over budget, the response would most likely be “fix it fast” and could lead to projects abruptly being squashed. Versus, if engineering teams knew the cost of the resources they were using, they could keep it in check, or ask for more budget with a project proposal and continue helping the business with innovation.

Accountability of cloud spend to specific teams and individuals gives the power back to them. It allows them to pick and choose what projects are worth the cost without causing the business to overspend.

Culture Matters

Best said by the FinOps Foundation,

“At its core, FinOps is a cultural practice. It’s the way for teams to manage their cloud costs, where everyone takes ownership of their cloud usage supported by a central best-practices group. Cross-functional teams in Engineering, Finance, Product, etc work together to enable faster product delivery, while at the same time gaining more financial control and predictability.”

FinOps is about teamwork, accountability, and changing the culture to be an open environment. Your (successful) FinOps team is not going to be built with just finance and cloud admins. It needs to be a mixture of different teams and backgrounds to have a well rounded view.

CloudHealth and FinOps

Want to learn more about how CloudHealth and FinOps can help you build, manage and optimize your cloud financial management practice? Watch the replay of our latest webinar CloudHealth and ISG: Optimize Costs with Multi-Cloud FinOps Platforms.