Where and how to start FinOps?

FinOps, once known as “cloud cost optimization” or “cloud economics”, used to be focused on a one-time “house cleaning” of cloud usage.  As FinOps practices evolved, it became more of a discipline or culture to be practiced continuously.
 

Nowadays, the extent of FinOps’ success depends heavily on how well it fits into the organization of your business. The challenges that businesses face along the way will also vary accordingly. Every cloud endeavor can benefit from FinOps; the question is, where should you focus your team’s energy?

FinOps in traditional organizations

In a traditional organization’s structure (one without a lean / agile management structure / DevOps), the primary challenge to implementing FinOps is the limitation on providing – and reacting to – real-time cost data. In this context, FinOps would aim to provide visibility on cloud costs on a regular basis (ideally weekly/ bi-weekly, but no less than monthly) as required by the organization as a starting point. The speed of change to enable cost-optimized and scalable cloud environments will be somewhat slower than what an agile organization might achieve, but significant nonetheless.

In traditionally structured organizations, FinOps practitioners work best when they’re able to collaborate across different departments while organized under a clear corporate identity. They might be a team under the finance department or, preferably, an IT or cloud center of excellence. The FinOps team thus provides a holistic view of cloud costs and plays the role of advocates, enabling better decisions by leaders on how to manage their cloud spending.

FinOps in agile organizations

By adopting contemporary IT management practices such as agile and DevOps, organizations can react faster to changes in business and technological demands. One of the key elements is to group the developers and engineers together with the operational people to develop, run, and enhance IT solutions faster. This is where FinOps should also participate in the DevOps teams to provide input to ensure that the cloud solutions deployed and operated can create the intended business value at the lowest possible costs.

Effective FinOps also comprises collaboration with operations teams – especially cloud operations teams. This is where FinOps plays its critical role of integrating with its counterparts, such as DevOps and SecOps, to ensure they can measure and create the intended business value from their applications and architectures. FinOps practitioners should work closely with cloud and IT security architects to define KPIs and accountability. Through this collaboration, FinOps experts can enable and advise on real-time cost visibility, thus building cost-effective architecture and solutions.

Centralized vs. decentralized FinOps

Another organizational discussion is on whether to centralize or decentralize FinOps-related activities. This too depends somehow on how flexible or agile the organization is. Take reservations purchases as an example. On one hand, decentralizing the reservations and savings plan purchases can ensure accountability of the application owners on their own cloud costs. On the other hand, these purchases (and their management) would preferably be centralized from a risk management perspective, in order to avoid generating idle reservations as a result of resource class or architectural changes.

The central role of centers of excellence

No matter what organizational structure a company has, the existence of a FinOps expert team is crucial. Your FinOps team, which might evolve into a center of excellence, maintains the holistic cloud spend picture while enabling cost accountability down to the lowest organization level possible.

Individual organizations will always face different challenges. The strength of a well-run FinOps team is its ability to adapt to the terrain and provide consistent visibility and savings. Hence, it is time to start building up your FinOps team and move your way through the journey of realizing the values of cloud.

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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 in our new white paper here.