Maximize business value with FinOps Cloud

Understand how FinOps enables organizations to extract maximum business value by fostering collaboration between engineering, finance, technology and business teams on data-driven spending decisions.

The term FinOps combines “finance” and “DevOps,” both tailored to the cloud realm. However, it’s more than just a terminological merger – it signifies a cultural shift required in teams dealing with the cloud, ranging from engineers to financial managers.
From a global perspective, organizations are increasingly betting on the widespread adoption of Cloud Services. According to Gartner, by 2027, cloud computing will not merely be a technological strategy but the primary driver of innovation.

The implementation:

Implementing FinOps goes beyond technically managing a Cloud infrastructure, whether centralized or multicloud. It’s a practice that transcends technical boundaries, reaching strategic levels within companies.

Traditional infrastructure methods need to evolve and scale so businesses can innovate and achieve significant returns. In 2023, the FinOps Foundation defined FinOps as: “An evolving cloud financial discipline and cultural practice, enabling organizations to extract the utmost business value, fostering collaboration among engineering, finance, technology, and business teams on data-driven spending decisions.”

The cultural approach

The essence of FinOps is cultural. I’m not diminishing other areas, such as engineering or products. It’s about ensuring everyone moves forward in harmony, supported by solid practices and shared values.

Let’s consider an example prevalent in many companies today. In a traditional IT environment with virtualized servers, cost forecasting is crucial. However, we often underestimate our needs to dodge future financial surprises. In the FinOps era, utilizing Cloud resources (be it public, private, or local data centers) properly planned, infrastructure cost can be linked to the cost of the delivered product.

With efficient FinOps practices, it’s possible to realize the value invested in each client, transforming the “fixed IT cost” into “cost per client,” enhancing number efficiency and adding value to the business.

FinOps and Data-Driven Profit Maximization

Data-driven decision-making is another critical facet. Accurate indicators, coupled with a robust FinOps practice, provide clarity and drive for business decisions. If you perceive FinOps merely as a way to save money, it’s time to rethink. FinOps is about making money.

The “Prius Effect” serves as an apt analogy. Just as a hybrid car utilizes energy efficiently, adapting instantaneously to speed demands, companies must be able to scale resources in line with demand, optimizing costs and seizing opportunities.

In summary, the pillars of FinOps are:

• Cross-departmental collaboration: Everyone, from finance to technology, must be on the same page.
• Decisions driven by the business value of the cloud: The cloud is a lever for innovation.
• Shared ownership of the cloud: Each team co-owns the responsibility.
• FinOps Reports: Must be clear, accurate, and tailored to the target audience.
• Centralization: Information and practices should be centralized, but not necessarily within a specific department.
• Advantages of the Cloud cost model: Viewing cloud costs as opportunities, not risks.

I hope this article provides clarity and inspires those aiming to maximize their companies’ value through FinOps.