An explanation of industry terms that is a quick read, and knowledge base.
What is FinOps?
FinOps is a cultural shift within an organization where accountability is established over cloud management to optimize value. FinOps incorporates teams across finance, technology, engineering, and business to collaborate on ways to balance speed, cost, and quality of cloud-based operations and cloud cost. Everyone within the organization takes ownership of mutual cloud usage and pursuits best practices to establish financial control and predictability.
How does FinOps work?
FinOps is an organizational cultural practice that is constantly iterating and maturing. A general “crawl, walk, run” approach to FinOps helps organizations empower teams to have ongoing conversations about where to best invest and at what time. The “crawl” portion is initially reactive, starting with quick actions at a small scale and scope. The FinOps team can assess their progress and expand to faster and broader iterations, eventually reaching a “run” stage that is more proactive cost factoring to inform future network design choices or workflow shifts.
To start, an organization must get complete visibility into all cloud spend and determine its goals compared to industry norms. Next, superfluous services and tools must be shed while automation is implemented to streamline resources. Lastly, operations are constantly evaluated moving forward to see where further costs can be cut while increasing efficiency.
How is FinOps important?
Organizations often pay for cloud usage and network resources or operational tools they don’t actually need. FinOps helps organizations start saving with cloud and optimize cloud costs to achieve maximum value with minimal spend
Benefits of FinOps
Through FinOps, organizations can establish financial visibility and accountability while accelerating value realization and innovation. Cost efficiency is another significant benefit as cloud spend sprawl becomes preventable, and cloud cost is optimized. The FinOps culture also engenders cross-department trust and collaboration. When implemented well, it can enhance operational resiliency and let teams focus on service quality, security posture, and operational stability.
Common use cases for FinOps
One primary use for FinOps is cloud cost optimization, keeping cloud spend under control by constantly examining and managing available resources. Alongside this, cost allocation is another central area where organizations determine where the cloud budget is distributed across departments and divisions.
FinOps can also head up an organization’s cloud consumption forecasting, establishing control over procurement and deployment to provide insight into and governance over current cloud spend and future requirements.
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