How to become Chuck Norris of FinOps and grow your cloud practice
FinOps - You’re probably hearing the buzzword thrown around startups right now in discussions about cloud operations and their spending. But what is it? And what do you need to know if you want to implement a FinOps practice in your digital endeavor?
What is FinOps?
FinOps is short for cloud financial operations (or sometimes cloud financial management) and combines data, organization, and cultural practice to help companies manage their cloud spending. FinOps doesn’t mean spending less in the cloud. You - startups, SMBs and corporates - should want to spend more, as it means you're growing and selling more. Yes, it sounds very simple, but same as with DevOps - it is complex and mastering it takes some time. Otherwise, you are Chuck Norris and we need to talk, mate, just pop us a message.
FinOps is the evolution of traditional cloud cost management and cloud cost optimization practices. You’re not just tracking cloud spend, trends and trying to charge back or show back costs to departments. You’re measuring the effectiveness of cloud and relating it to the business’s goals using metrics - you are actually proving to your financial boss, business board or investor that cloud is worth it and makes sense. And sure it does! You should aim for a unit price to drop (optimisation) while the overall price goes up (growth). To effectively optimize cloud cost, a FinOps practice aligns advanced cost management metrics with business metrics, such as revenue and profit; development schedules, requirements, and costs; business units and operations; growth projections; and other long-term analysis. Our FinOps masters in Revolgy (and Chuck Norris) often say: “FinOps is an important part of the culture within the organization you need to grow and harness”.
The Six Principles of FinOps from the FinOps Foundation
- Teams across the company need to collaborate, define governance and monitoring for cloud usage to continuously improve operations to see cloud cost as an efficiency metric. Yes, we are talking about cooperation between finance and engineering. Sounds impossible? You better start today.
- Everyone takes ownership of their cloud usage. FinOps leaders need to empower teams to manage their own cloud use against their own budget, no more closed doors and non-transparent budgets. With visibility into their cloud spend, they should track team-level KPIs to drive accountability.
- A centralized team drives the FinOps approach. This cross-team of your people centrally governs cloud costs and discount buying to control committed use discounts, reserved instances, and other volume or custom discounts with cloud providers and allocate costs to the teams and cost centres responsible for them. We know a lot about cloud spend, we have hundreds of more and less successful stories from our business.
- Decisions are driven by the real business value of the cloud. Teams in charge of cloud financials should benchmark their cloud performance against company performance and drive best practices throughout the organization.
- FinOps reports should be accessible and timely. With visibility into the cloud environment, teams can determine if resources are over- or under-provisioned. The continuous reporting, monitoring, and automation available in a cloud management platform result in a fast feedback loop to promote more efficient cloud spending.
- Take advantage of the variable cost model of the cloud
One of the biggest advantages of the cloud is that you pay for what you use. Not everyone is an expert, so very often companies pay for what they order. FinOps practitioners should take advantage of rightsizing to optimize resources.
Who benefits from FinOps and how to start with it?
Literally every department, we promise. Cloud managers and architects, DevOps folks, Finance department, Product managers and owners, Leadership, Members of the C-suite, and others.
We understand that one of the biggest challenges in starting a FinOps practice is getting broad executive buy-in to dedicate the time and resources needed for the cultural change. We work with companies like yours every day to enable this change, to help you in this very long marathon in which you must persevere. FinOps is the key to unlocking the promise of cloud computing and to a world where sustainable and cost-effective technology is made possible by the collaboration of engineering, finance, and executive leadership through the FinOps Framework.
Do you want to know more? Explore our dedicated page.