Getting the most out of FinOps

The mindset and business values that will take you to another level.

Crafting a culture of accountability and ownership that’s fit for the cloud world – and reaping all the benefits that go with it.

FinOps (financial operations) is an integrated approach to financial optimization that plays a critical role in getting the most out of your cloud transformation. With FinOps, cost optimization is seen as a recurring activity and an intrinsic part of the entire IT model that is embedded in the culture of IT organizations. In order to ensure that FinOps is successfully and sustainably implemented within a company – and guarantee that it delivers a positive impact throughout the entire organization – there are two key dimensions that need to be developed. These include creating a culture of accountability and optimization and establishing a clear capability to prove the business value derived from FinOps.

Creating a culture of accountability and optimization is the bedrock that ensures people and teams will utilize FinOps guidelines, processes, and tools. Establishing a clear capability to prove the business value attained from FinOps means explicitly showing the impact of FinOps initiatives and results relative to overall business performance. Central to achieving this is the ability to link IT, finance, and business – and to secure the involvement of business teams (i.e., business application domain owners). If this can’t be accomplished, FinOps will remain an IT topic – and there is a risk of under-investing and not reaching targeted efficiency levels.

Effectively acting on, adopting, and aligning FinOps are of the top challenges organizations are facing here, according to the most recent State of FinOps report. Successfully creating a culture of accountability and optimization – and establishing a clear capability to prove the business value derived from FinOps – will go hand in hand with achieving this.

3D FinOps: Processes, tools, and people – changing minds and creating a culture of accountability and optimization

FinOps comprises three dimensions – processes, tools, and people. The people aspect is frequently underestimated or only partially addressed. Organization, governance, and roles are often defined – but the cultural shift necessary to unlock the true potential of FinOps is difficult to implement.

Having FinOps activities written down in job descriptions is not enough – deep cultural change is the missing link. Overall, the components of a thriving FinOps culture include collaboration, transparency, individual and collective ownership and accountability, blamelessness, accuracy, and financial consideration by design.

Best practices that can help you successfully implement these components – and onboard and adapt stakeholders to your FinOps culture – include the following:

• Defining a common language and taxonomy
• Heightening communication with the right education
• Bringing teams together – architects, engineers, and finance – via ceremonies
• Easing access to cloud usage and cost data via dashboards and reports to increase transparency
• Creating active processes for FinOps knowledge sharing among teams
• Implementing gamification and rewards systems to improve buy-in

This cultural shift is a phased journey – not an instantaneous big bang. This is why it’s important to spend time building strong foundations – and then spread out in a structured manner. Implementing the best practices outlined above will enable you to develop business-oriented metrics to empower architects, developers, engineers, and application teams in a continuous value vs. cost trade-off journey. These best practices will help shape enhanced daily efficiency-driven behaviors around by-design optimization, including via automation of FinOps policies at code level. The end result is a deeply rooted culture of accountability and ownership, applied to application architecture and design, and fully adapted to the cloud world.

Establishing a clear capability to prove the business value derived from FinOps

FinOps provides a clear path to linking cloud usage (and costs) to business value creation. It enables you to engage business stakeholders, secure buy-in, and prove that your overall cloud transformation efforts are under control. To accomplish this, it’s essential to link FinOps activities to their impacts at the business level (individual projects and applications), along with connecting cloud usage and costs to benefits (revenue generation) with the right levers. This means using the right metrics and KPIs – and communicating and linking cloud costs with unit economics, along with aligning engineering decisions with cloud business outcomes. Mature organizations utilize FinOps to articulate cloud benefits beyond cost savings in order to empower developers and help the business adapt to an OpEx-based IT model.

FinOps going forward

As you embark on your FinOps journey, remember that creating a culture of accountability and ownership, as well as establishing a clear capability to prove business value, is essential to success. By following the best practices outlined here, you can build a strong foundation for a thriving FinOps culture, unlocking its true potential and driving meaningful change within your organization. With FinOps, you have the power to optimize your cloud usage, align engineering decisions with business outcomes, and drive innovation forward. So, embrace the challenge, lead the charge, and unlock the full potential of your cloud transformation with FinOps!

A leader in cloud and operational optimization, Capgemini is helping organizations around the world to optimize their cloud services, saving money and lowering their carbon footprint.   

   

Looking to go deeper into FinOps? Read more on FinOps here.