Can FinOps help make your cloud budget go further?
Finding it hard to manage your cloud budget wisely? FinOps could be the answer. Find out more in our article.
Hang around the water cooler in any cloud tech company and you might hear people murmuring "FinOps… FinOps… FinOps".
Yes, FinOps is the talk of the cloud world, beguiling everyone from CIOs and business leaders to tech journalists. Leading technology research firm Gartner included it on its Hype Cycle for Emerging Technologies report 2023: an annual list of technologies that are likely to impact businesses in the near future.
On this list, FinOps rubbed shoulders with Web 3.0, artificial intelligence (AI) and machine learning. But whereas AI is now a household name, FinOps is… not. Most people haven't heard of it – and many of those who have couldn't tell you exactly what it is.
No sweat. In this article, we break down what FinOps is and how it can help make your cloud budget go that bit further.
What is FinOps?
Look FinOps up in the dictionary and you'll find… nothing. You'll have as much luck finding a plain definition for "frabjous" or "kakakakakaka".
Google defines it as "an operational framework and cultural shift that brings technology, finance and business together to drive financial accountability and accelerate business value realisation through cloud transformation".
Despite its inclusion on Gartner's list, then, it's not a technology. Rather, it's an approach to financial management that seeks to increase spend visibility and cross-department collaboration. This collaborative spirit is there in the term itself: a portmanteau of "Finance" and "DevOps".
FinOps was conceptualised to fill a hole left by pre-cloud, traditional IT. In those hazy days, IT costs were the responsibility of either the IT finance team or the procurement team.
Back then, the department responsible could easily track, predict and manage spend. Budgets set each cycle weren't quite clockwork – financial management never is – but they were pretty regular, all told.
Then the cloud arrived, casting a grey pall over these sheer blue skies. Why? Because cloud solutions can now be spun up and deployed without the knowledge of IT finance or procurement.
A proactive cloud engineer can do this before she's brushed her teeth – a situation that was inconceivable before the cloud existed. And overall, it's a net boon, meaning dynamism, creativity and flexibility.
But it also makes financial management much trickier. Managing cloud costs has become something of a gamble. The purpose of FinOps is to create a model of financial management where everyone is accountable for their role in cloud usage.
Yes, FinOps is about cost-effectiveness – but it's so much more than that. Don't be fooled by people who use it as a synonym for "cloud cost management" or "cloud cost optimisation". You might as well say that cloud computing is about backing up your holiday photos.
The five pillars of FinOps
Depending on who you ask, there are five, six or 72 core building blocks that make up FinOps – but as far as we're concerned, there are five aspects that sum up what it offers.
1. Accountability
FinOps is about establishing a team that crosses departments to manage the whole organisation's cloud costs. We're no longer in the world of The IT Crowd with the people responsible holed up in the basement. FinOps promotes collaboration across departments for spend visibility.
2. Measurement
Every business owner loves a good metric. FinOps gives you KPIs that help you precisely track your cloud progress.
3. Savings
If you can't see who's using what, you can't budget effectively. The greater visibility that FinOps brings puts you in a great position to optimise costs – because, as the saying goes, better data makes for better decisions.
4. Forecasting
No one leaves the house with snow boots, an umbrella and sunscreen just to be on the safe side. But too often, enterprise finance teams are unable to make informed forecasts and don't know how to allocate cloud costs. FinOps has the potential to make this a thing of the past.
5. Tools
While FinOps is a philosophy, not a piece of software, it needs the right cloud cost tools to allow for the wise allocation, tracking and management of cloud spend.
Is FinOps the best way to manage your cloud budget?
The world of cloud technology is constantly shifting. Solutions pop up and burst like bubbles on a breeze.
But FinOps is different for one main reason: it's not a solution that locks you into software, hardware or a specific vendor. It's more about changing your mindset and governance practice for the better.
The thing about the cloud is that its benefits can be huge – but they're not guaranteed. It's perfectly possible for you to roll out a cloud solution and then find that it's wasteful, chaotic and user-unfriendly. All you've done is take your millstone to the pawn shop, then go straight out and buy another one.
FinOps is a way to ensure that the right hand knows what the left hand is doing. It's a way of keeping on top of your cloud budget so you can save money and make better decisions. It's a way of increasing usage visibility, as well as cross-departmental collaboration.
But just as cloud migration isn't a silver bullet unless fired correctly, so FinOps needs to be implemented with care. When done well, it can accelerate digital transformation and provide much-needed clarity at a time of financial uncertainty.
So… can it help make your cloud budget go further?
The simple answer is "yes". Do it properly, and FinOps can bring cost visibility, optimisation and control to your enterprise by letting you accurately predict, track and manage your cloud spend.
This means better decisions that are driven by data. It means cross-departmental accountability and collaboration. And it means better financial management across the board.
The cloud is here to stay – and so is FinOps. Together, they can make the much-vaunted benefits of digital transformation felt in the very bones of your organisation.
At Ascend Cloud Solutions, we've managed over 400 cloud migrations and counting. If you're looking for a trusted cloud consultancy firm, please don't hesitate to get in touch.
