Quoting Sid Nag, Vice President Analyst at Gartner*, “Cloud migration is not stopping.” On the contrary, he says, “IaaS will naturally continue to grow as businesses accelerate IT modernization initiatives to minimize risk and optimize costs.
But, what if your move to the cloud isn’t helping you optimize costs at all?
Cloud resources are flexible and scalable, but they can also be complex and challenging to manage. That’s where FinOps comes in. A new approach to cloud financial management that aims to give businesses greater visibility and control over their cloud spending.
What Is FinOps?
FinOps, short for Financial Operations, is a set of practices, processes, and tools designed to help businesses optimize cloud spending. By bringing together finance, IT, and business teams, FinOps aims to increase transparency, introduce (more) employee accountability and facilitate cost optimization.
Unlike on-prem tech, you can’t just turn cloud resources on and let them run. Because you pay per use, use needs to be managed. At the beginning of one’s journey, the environment is often well-organized. However, as companies deploy more and more resources, keeping track of costs and optimizing spending becomes increasingly tricky.
Traditional financial management practices are not designed for the cloud. They are too focused on the cost aspect, whereas in the cloud, behavior, awareness, and accountability are just as important. Companies, therefore, need a new, more comprehensive approach to effectively manage their cloud finances, namely FinOps.
The Key Components of FinOps
The FinOps approach comprises three key components: people, processes, and technology.
People: the main objective is to bring people from different departments, like finance and IT, together to encourage collaboration. Each team is responsible for managing cloud costs, but by working together, they can really take optimizing cloud spending to the next level.
Process: the FinOps process always follows four key steps: inform, optimize, allocate, and control. The goal of the process is to gain insight, optimize resources, allocate costs to the right teams, and control expenses.
Technology: technology forms an essential part of FinOps. Firstly, because cloud cost management platforms, automation, and monitoring tools are critical to saving money. But, in addition, increased tech awareness can lead to smarter tech choices, which can help you save even more!
4 Reasons to Implement FinOps
Implementing FinOps can provide numerous benefits, like:
- Cost optimization: the number one reason to start with FinOps! By embracing a new way of working across the organization, you really can reap the benefits of the cloud — at the right price!
- Transparency: FinOps provides companies with insight into cloud spending, making it easier, for example, to figure out which teams are using what resources and calculate ROI.
- Accountability: not only is it easier to hold teams accountable for their cloud spending, but FinOps also makes people more aware of how the cloud works, making them feel more responsible for their spending.
- Collaboration: FinOps makes optimizing cloud spending a team effort. By bringing finance, IT, and business teams together, FinOps fosters collaboration.
A lot of organizations have already been quite successful at implementing FinOps, and cost reductions between 20 and 50% are definitely not uncommon!
Effective financial management becomes increasingly important as businesses move to the cloud. FinOps provides a unique approach to cloud financial management that helps companies to gain greater visibility and control over cloud spend. By implementing FinOps, you can increase transparency and accountability, foster team collaboration, and ultimately optimize your cloud spend!
If you’re using Azure and want to save money, give FinOps a try. We can help you generate savings and boost your profitability. By implementing FinOps, organizations have been known to save at least 20% on their cloud costs! We are excited to work with you every step of the way and ensure you’re getting the most out of your cloud investments. Contact us today to see how we can help you optimize your cloud spending with FinOps.
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