Key takeaway
FinOps, short for Financial Operations, is a methodology that focuses on optimizing cloud costs and maximizing the value of cloud investments within an organization. This article details the importance of aligning financial management practices with cloud operations to achieve cost efficiency, transparency, and accountability.
Introduction
Cloud adoption has skyrocketed, and with it, so have complexities around cloud cost management. This is where FinOps comes into play. FinOps (short for “Financial Operations”) is a practice that combines financial management and cloud operations to optimize the costs of cloud services. It empowers organizations to maximize the business value from their cloud investments.
The main objective of FinOps is to enable organizations to make informed decisions about their cloud spending by providing visibility, accountability, and optimization strategies. It’s about moving beyond reactive cost-cutting to a proactive, strategic approach that aligns cloud spending with business objectives.
Key FinOps Principles
The key to building a culture of cloud financial responsibility is a strong foundation of guiding principles. These principles will help teams foster collaboration, transparency, and ultimately maximize value from cloud investments. Let’s explore them in more detail.
Collaboration
FinOps requires collaboration between teams in order to effectively optimize an organization's cloud spend. It’s essential for all cross-functional stakeholders to work together towards a shared goal. This transparency will help break down silos, eliminate “shadow IT” spending, and empower everyone to make informed decisions.
Accountability
The goal of FinOps is that everyone takes ownership of their cloud usage. Each team is accountable for optimizing their own cloud usage and controlling costs within their domain. This shared responsibility ensures that every stakeholder understands the cost implications of their choices and is a collaborative effort in driving efficiency and eliminating waste.
Governance
Cloud freedom shouldn’t come at the cost of chaos. Governance in FinOps establishes clear guardrails for cloud usage – such as setting policies, budgets, and approval processes that guide responsible spending while aligning with business goals.
Continuous improvement
Just like the cloud itself, your FinOps practice should be dynamic and adaptable. Regularly review cloud resources, identify and eliminate waste, and implement cost-saving strategies like reserved instances or autoscaling. Continuously monitor, analyze, and refine your approach to ensure you’re getting the most value from your cloud operations.
The FinOps Lifecycle
The FinOps lifecycle is a structured framework for organizations to effectively manage their cloud spend from start to finish. It outlines three distinct phases, each crucial for establishing control and maximizing value:
pic taken from FinOps Foundation
Inform
Demystify the cloud bill and establish financial transparency. Data is king, and this initial phase focuses on gathering detailed insights into cloud usage and costs. This involves establishing cost allocation models, identifying cost drivers, and empowering all stakeholders with clear visibility through dashboards and reports.
Optimize
Realize the full potential of your cloud resources. This phase is all about strategic cost reduction and improving efficiency. Identify opportunities for optimizing cloud spend across resources and reduce wasteful spending. Collaboration is key here, with finance and technology teams working together to implement cost-effective solutions aligned with business goals.
Operate
Embrace continuous improvement as your guiding principle. This last phase is all about continuous monitoring and refinement. Implement organizational changes such as automated cloud governance policies to enforce best practices and prevent cost overruns. Conduct periodic reviews to identify new optimization opportunities and adapt to evolving cloud usage patterns.
How does Harness CCM integrate with the FinOps Lifecycle?
FinOps practitioners use cloud cost management solutions to improve their efficiency and control cloud costs. As the most comprehensive cloud cost management tool, Harness CCM enables teams to take control of their cloud costs efficiently and effectively. With granular visibility into cloud spend, teams can identify and drill down into areas of increased or inefficient costs.
With Harness CCM, teams get:
- Cost Reporting: Attribute and manage costs across your organization with the most granular visibility.
- Cost Optimization: Automatically shut down idle cloud resources when inactive, and bring them back when activity is detected.
- Cost Governance: Automate governance-as-code with cost, security, and compliance policies.
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