What Does a FinOps Program Need to Do to be Successful?
If your answer is “save money in the cloud,” you’re not wrong. Reducing cloud spending is a primary focus of FinOps.
However, a truly successful FinOps program needs to do more than just reduce cloud spending. It should also deliver other capabilities that help businesses maximize the value of each dollar they spend in the cloud.
Here’s a look at which capabilities distinguish “average” FinOps programs from top-tier initiatives, and why having advanced FinOps features and benefits is so important.
Hands On Engagement from FinOps Partners
Partly due to the complex customization needs of a successful FinOps program, the ability to engage in a hands-on way with FinOps partners is often critical for getting the very most value out of FinOps.
Most FinOps vendors offer at least basic support services, such as ticketing portals where their customers can request technical support. But some vendors go further by actively engaging with their customers’ engineering and business teams to help plan an optimal FinOps strategy, as well as implementing the platform customizations necessary to support it.
When you design a FinOps program around this type of engagement, your FinOps tool vendor becomes more like a strategic business partner than a vendor. This is a critical advantage given the complexity of cloud spending trends and the fact that no one knows how to optimize FinOps platforms based on the unique requirements of a given organization better than the platform partners.
Flexibility and Customization
Every organization’s FinOps needs are unique, and its FinOps program must be flexible enough to address unique requirements.
For example, imagine that your finance team is asking whether it can classify an application as “COGS” or “R&D” while also telling you that cost centers increased from last month’s invoice. Meanwhile, your app team owners are screaming about maintaining performance above all else, and therefore cannot take the rightsizing recommendation the CIO thinks will save the 12% cloud reduction they promised. And your engineers are wondering why DevOps is creating tickets to change their environments for containerized resources already covered by the savings instruments that both finance and their manager buys. With so many different stakeholders pursuing competing goal and speaking different languages, you need a FinOps program that is flexible enough to accommodate them all.
Likewise, a company may face special compliance or risk management mandates that it needs to factor into its cloud cost optimization plans. In that case, the ability to collect data related to risk management and correlate it with spending data is critical.
An ideal FinOps program provides the customizability to support unique needs like these. Otherwise, organizations that can’t customize their approach to FinOps end up with limited insights and cost optimization opportunities.
Predictable FinOps Spending
Knowing how much your FinOps tools and processes cost you is important for ensuring that you achieve the best possible ROI between what you invest in FinOps and what it saves you on cloud bills.
Too often, however, companies launch FinOps programs without knowing what the programs will cost. That’s because the traditional billing models used by FinOps tool providers charge customers either a percent of their cloud consumption or a shared savings model based on how much money they save in the cloud.
Correlating FinOps pricing with the amount you are spending in the cloud effectively equates to a cloud tax. Additionally, the idea of a shared savings model may sound great at first, but this model requires a burdensome level of analysis from both internal teams and from the FinOps partner. They must agree on, report and track which savings count towards the monthly fee. It also may not deliver much savings beyond what you can get from free using insights generated by cloud service providers themselves.
In addition, this approach to billing makes long-term FinOps costs unpredictable. Since you can’t predict exactly how much money FinOps will save you, you won’t know which portion of your tool budget you’ll have to devote to FinOps a year or two or five down the road.
A better approach is flat-fee pricing. This makes long-term FinOps costs – and, by extension, FinOps ROI – easy to predict. It also just makes more sense, given that most FinOps tools are SaaS solutions whose operating cost for their vendors is more or less fixed regardless of how much customers save.
Cross-Cloud, Customizable FinOps Automations
There are plenty of ways to set up automations to help reduce cloud spending. For example, you could use a cloud service providers’ native tools to turn off unused cloud servers automatically.
But highly effective FinOps programs don’t rely on automations that are linked to individual cloud providers. They instead leverage automations baked in FinOps platforms that work across all clouds, simplifying the process of reducing spending.
In addition, highly successful FinOps requires more than the ability to automate basic routines. You should also be able to build automations that enable custom capabilities, such as importing unique types of data. As I mentioned above, customization and flexibility are a crucial pillar of FinOps, and it’s easier to operationalize a custom cloud cost optimization strategy when you can automate it in ways tailored to your business.
Note, too, that some automations are trickier than others to build – but your FinOps program should be sophisticated enough to enable whichever automations you need. For instance, yur FinOps team might find it easy to create basic automations that turn some things off on nights or weekends. But can they also leverage automation to factor in changing drivers and software license types when updating EC2 instances from M5s to M7s, for example? Can they automate the creation of policies for cross-region data transfers? Can they create automations that delineate your RDS failover strategy for apps at different life cycles? These are the types of advanced, custom optimizations that set highly successful FinOps programs apart.
Optimizing Optimizations
The bottom line: Don’t settle for a FinOps program that delivers some value, but is difficult to execute or optimize. Nor should you adopt a tool that provides some dashboards when what you really need is a FinOps program to hold many stakeholders accountable for an organizational culture shift.
After all, the ultimate goal of any FinOps program should be not just to reduce cloud spending and improve overall business value of each $ invested in the cloud, but to do so in the most effective ways. That becomes possible when you have FinOps platforms and processes that you can easily adapt and automate based on your unique business requirements. Hands-on help from vendors and predictable FinOps costs help, too.
