FinOps

What is FinOps?

FinOps stands for financial operations. FinOps is also referred to as Finance Ops, Cloud FinOps, or Cloud Financial Management.

FinOps is a management practice that promotes shared financial accountability, measuring, monitoring, and optimizing cloud costs across cross-functional teams.

What is the role of FinOps?

FinOps drives enterprises to build a framework that connects technology, business, and finance to drive accountability. FinOps lets each team member account for their cloud usage to determine overall costs. By accounting for cloud costs, cross-functional teams can work together to gain stronger financial control that is often overlooked.

What is FinOps in Cloud?

FinOps gives visibility into an organization’s cloud costs and investments. Cloud FinOps allows businesses to maximize their value of investment in cloud. Integrating the cloud FinOps principles helps business with financial accountability by following these pillars:

• Accountability: establishing cross-functional teams to manage cloud spending and set standards
• Measurement: creating KPIs to measure transformation efforts
• Cost-Optimization: identifying these primary cost-optimization factors
  • Resource optimization
  • Architecture optimization
  • Pricing optimization
• Planning: allocating spend and understand cost-drivers
• Tools: developing and implementing proper tools to track and manage cloud costs

What is Cloud Operations Management?

Cloud Operations Management is the practice of managing the processes of IT services that run in a cloud environment. The processes that are managed are:

• Delivery;
• Tuning;
• Optimization; and
• Performance of Workloads.

Cloud Operations gives an organization maximum visibility into its cloud environment that allows services to run cost-effectively and efficiently.

Phases of FinOps

There are three phases in the FinOps journey that organizations continuously cycle through to advance their practices:

• Phase 1, Inform: Organizations asses their current allocation, budgeting, forecasting, and benchmarks for cloud resources. This information provides organizations to determine the costs associated with cloud resources to identify opportunities to improve and avoid unnecessary costs.
• Phase 2, Optimize: FinOps teams use their information gathered from phase 1 to optimize cloud consumption. The team can use reserved instances or committed-usage discounts to get rid of unnecessary resources and downsizing their environment.
• Phase 3, Operate: FinOps teams continuously evaluate their objectives and metrics. The teams analyze their cloud operations to ensure alignment with business needs.

Common FinOps Features

Each FinOps feature has a key capability that allows organizations to have visibility into their cloud costs:

• Reporting;
• Performance metrics;
• Budgeting;
• Detailing insight into cloud usage; and
• Granular tags.

Benefits of FinOps

Cloud FinOps provides insights into your organization’s cloud costs with benefits such as:

• Cost optimization;
• Better cost allocation;
• Accurate data monitoring;
• Decision traceability; and
• Improved cross-team collaboration.