FinOps Answers Those Difficult Cloud Questions

Image credit: iStockphoto/maurusone

Is it worth implementing FinOps right from the start of your cloud journey? 

According to a webinar organized by CDOTrends and Apptio, the answer is a resounding yes. Implementing FinOps from the very beginning has been shown to address scalability and shadow IT costs later down the line while helping companies to move from battling cost waste to optimizing budgets for cloud-driven innovation that helps the bottom line. 

In the lively webinar that drew digital, IT, and finance leaders, the panelists discussed other benefits beyond cost optimization. They noted that companies could also avoid common mistakes made during a cloud journey, such as over-provisioning, underestimating demand, and failing to optimize resources.

Start today, not tomorrow

According to Nathan Besh, senior director for product management and technical evangelism at Apptio, companies should not overthink how they can get started with FinOps. Instead, it’s critical to start the journey now and make progress. He added that working with curious minds, and getting people on board who understand numbers and appreciate technology helps.

However, the essential benefit of FinOps is that companies can ask the right questions about cloud-related costs and value right from the beginning. It allows companies to go beyond cloud cost control, help them see the bigger picture rather than getting mired in dollar details, and focus on projects with better ROI. 

Besh said that a common question when executing FinOps is “what is the ‘cost’ of something.” However, he suggested companies must replace any mention of cost with efficiency. Many companies are also thinking more about innovation and how the cloud could help them do things they couldn't before.

For Liam Bailey, platform engineering lead at Iress, FinOps broke down the silos that have traditionally existed between the finance, ops, and development teams. From making costs visible to encouraging knowledge sharing and involving everyone in the process, FinOps helped his company to create a more collaborative, value-aware and cost-conscious culture.

Keeping the conversation going

Once teams agree that FinOps is the way forward, it's essential to keep the conversation going and continue learning and evolving. This means being open to new ideas and technologies and always looking for ways to improve processes.

The panelists agreed that implementing FinOps required understanding the different viewpoints of everyone involved in the cloud journey. This included not just those in IT and finance but also the business stakeholders.

Marissa Law, commercial lead for technology at Iress, said that collaboration and communication were two of the most important things that her team prioritized with FinOps.

Bailey agreed and said that empathy was vital to having productive conversations and that it was essential to understand the triggers that led to the need for FinOps in the first place.

Throughout interactions, teams at Iress avoided finance and IT jargon and used language everyone could understand. In addition, Law said it was essential to keep an open mind and remember that every conversation and interaction is a learning opportunity.

Creating a winning FinOps strategy

Having a clear vision from the outset is essential, as this would help keep everyone aligned and on the same page, Besh said. According to him, not only should companies ask the right questions, but also the tough ones. When removing waste, questions like "Why did it get here?" "How long has it been here?" and "What are we doing to make sure it doesn't happen again?" were necessary for getting to the root of the problem, he shared. 

For Law, the approach to FinOps cannot be static but needs to evolve. She worked with a group of “cost warriors” across IT and finance, focused on establishing tagging standards. They also selected tools, built dashboards, and had basic conversations with teams to build capability on optimization.

Iress is planning to expand their FinOps capability to product management by introducing TCO and unit cost analysis. Law said that this was important to increase visibility on costs and value and understand better whether they are achieving cost efficiency at scale.

Getting engineers to become advocates for cost is also a common challenge, but it is essential for the success of FinOps. To overcome this, Law said companies could begin communicating the benefits of FinOps and how it could help engineers with their day-to-day work.

Dealing with the shared cost is perhaps one of the most difficult challenges that companies face. Analysts recommended looking at the total cost of ownership (TCO) for services and considering both direct and indirect costs.

In some cases, discussing whether certain services are needed may also be necessary. According to Bailey, framing a model is a good way to start. Companies can get teams to add a percentage to their costs as anticipated shared usage. Micro-account patterns that include VPC sharing are becoming more common and can help reduce costs.

In the end, Bailey said the most important thing was for companies to do what makes sense.

Conclusion

FinOps is a journey that requires a lot of effort from everyone involved. Companies need to be prepared to face challenges, such as getting engineers on board and be willing to invest time in understanding the people and culture within their organization.

Besh summarized it by saying that companies simply need to get started. "As long as you're starting to take those steps, you'll make some errors; you'll need to change course, and you'll shift priorities depending upon what happens within your business. Just get started to start reaping the significant rewards from FinOps," he said.

Image credit: iStockphoto/maurusone