What is FinOps?

With relevant data in hand, the organization must next take action to reduce spend and rightsize capacity without reducing cloud effectiveness. Optimization means taking a cold, hard look at utilization and rates, and making necessary changes.

After trimming away the excess, organizations need to assess effectiveness. Measuring speed, cost, and quality of cloud capacities, they compare results to predefined goals. As improvements are made and tested, the business continuously restarts the cycle, for ongoing FinOps optimization.

It’s important to note that not only is this cycle self repeating, it’s also team-dependent. An organization may find itself in multiple different stages at the same time, across multiple departments.

Executives lead by example in embracing FinOps culture. They focus on accountability and transparency throughout the entire organization, and act as a safeguard against teams exceeding budgets.

Finance and procurement specialists rely on accurate financial reporting and historic billing data to improve accounting and forecasting. They also use their analytical insights to negotiate rates with cloud vendors.

Engineering and operations teams work within FinOps to establish cost as a performance metric, and are responsible for building and maintaining FinOps support services.

FinOps practitioners help forecast cloud spend, and work within teams to accurately budget and allocate resources.

As previously addressed, FinOps is a cultural shift that demands ongoing support and accountability throughout an entire organization. To help ensure FinOps success, here are several best practices that can be implemented across levels, teams, and departments.

Identify which applications, teams, and departments are using which resources. Visibility into current spending will provide a clear starting point for reducing costs without negatively impacting performance.

As unnecessary costs are identified, cut them out. FinOps businesses need to be able to run lean, without any room for extraneous cloud expenses.

When reserved instances become available, consider purchasing them for future use. Reserved instances are often available at cheaper rates, and can help reduce costs when compared to on-demand options.

When workloads are unpredictable, take advantage of autoscaling options to automatically adjust computational resources to match active services.

By working with multiple vendors, businesses improve their flexibility and allow for a better range of cloud options.

While it can be advantageous to work with a range of vendors, some vendors offer volume discounts, potentially offering significant savings on cloud services.