The range of cloud services used by organisations is increasing, and with the democratisation of cloud services to a wide range of teams, it is easy to see cloud costs spiral.
A new approach is needed to ensure you take advantage of the cloud, but managed costs, this is where cloud FinOps come in. When looking to implement cloud FinOps it is important to apply the 6 principles of cloud FinOps.
An introduction to cloud FinOps
Cloud FinOps is shorthand for Cloud Financial Management. It is the practice of bringing financial accountability to the variable spend model of cloud, enabling distributed teams to make business trade-offs between speed, cost, and quality.
At its core, FinOps is a cultural practice. It’s the most efficient way for teams to manage their cloud costs, where everyone takes ownership of their cloud usage supported by a central best-practices group. Cross-functional teams work together to enable faster delivery, while at the same time gaining more financial and operational control.
6 principles of cloud FinOps
- Teams need to collaborate
Collaboration is at the heart of cloud FinOps. Different areas of the business coming together to discuss requirements, the approach and the benefits, is the best way to ensure efficiencies. For example, if your data team need a new service and have selected one, it is important they discuss this with the cloud infrastructure team to ensure the new service fits within the wider cloud strategy and to ensure it’s efficient.
- Decisions are driven by the business value of cloud.
A key part of the process is to ensure the value of the cloud is clearly articulated as part of each initiative. This allows you to see the cost benefit and clearly assess the value its offering. As in some cases a response to rising cloud costs can be to refuse requests for new cloud services.
- Everyone takes ownership of their cloud usage.
A common battle within organisations can be owners of cloud services not taking cloud usage into account. A common battle between development teams and IT operations is driven by this.
- Cloud FinOps reports should be accessible and timely.
To support timely decision-making cloud FinOps reports should always be available to all stakeholders. There are a wide range of cloud monitoring ones available, but you could also use reporting tools like Power BI to build custom reports to monitor key metrics.
- A centralised team drives FinOps.
For bigger organisations a specific role or team focused on FinOps is key. These teams should have senior sponsorship and be leading all cloud FinOps activity. Setting up review boards, guidelines and approval processes to keep this focused.
- Take advantage of the variable cost model of the cloud.
This is an area where most organisations could save a significant amounts of costs. For example, most applications or data is only needed Monday to Friday 9 – 5 which represents only 23% of the hours in a week.
Using automation tools and scripting, it’s possible to spin up and down resources at key times. Another way of looking it is to measure the actual performance/resources needed vs the resource you are paying for. Many people overestimate the resources they need to meet their worst-case scenario, when you would be better to look at the average figures and auto scale the resources if more is needed.
The nature of cloud FinOps is to apply a collaborative, common sense and business focused approach to the cloud. It is everyone’s responsibility to manage cloud costs and with a concerted effort it is possible to significantly reduce your cloud costs and maintain the right level of service.
Would you like to embrace cloud FinOps in your organisation? contact us today to find out more or download our Azure cost management guide for practical tips on applying cloud FinOps in Azure.
