What does a financial operations program need to do to be successful? If your answer is save money in the cloud, you’re not wrong. Reducing cloud spending is a primary focus of FinOps.
A truly successful FinOps program, however, needs to do more than just reduce cloud spending. It should also deliver other capabilities that help businesses maximize the value of each dollar they spend in the cloud.
Here’s a look at which capabilities distinguish average FinOps programs from top-tier initiatives, and why having advanced FinOps features and benefits is so important.
What Makes a FinOps Program Highly Effective?
- Extra support from FinOps vendors
- The ability to accommodate teams across an organization
- Flat-fee pricing
- Customization and automation
1. Hands-on Engagement From FinOps Partners
Due to the complex needs of a successful FinOps program, the ability to engage hands-on with FinOps partners is critical for getting the very most value out of FinOps.
Most FinOps vendors offer at least basic support services, such as ticketing portals where their customers can request technical support.
But some vendors go further by actively engaging with their customers’ engineering and business teams to help plan an optimal FinOps strategy, as well as implementing the platform customizations necessary to support it.
When you design a FinOps program around this type of engagement, your FinOps tool vendor becomes more like a strategic business partner than a vendor. After all, no one knows how to optimize FinOps platforms based on the requirements of an organization better than the platform partners.
2. Flexibility to Accommodate All Teams
A FinOps program must be flexible enough to address requirements across an entire organization.
For example, imagine your finance team is asking engineers whether they can classify an application as COGS, meaning cost of goods sold, or R&D, meaning research and development, while also telling you that cost centers increased from last month’s invoice. This distinction is not always obvious, especially to engineers who lack expertise in finance and accounting practices.
Meanwhile, your app team owners are screaming about maintaining performance above all else, and therefore refuse to take the chief information officer’s recommendation to cut costs, which she thinks will save the 12 percent cloud reduction promised.
And your engineers are wondering why DevOps is creating tickets to change their environments for containerized resources already covered by the savings instruments that both finance and their manager buys.
With so many different stakeholders pursuing competing goals and speaking different languages, you need a FinOps program that is flexible enough to accommodate them all.
An ideal FinOps program provides the customizability to support unique needs like these.
3. Predictable FinOps Spending
Knowing how much your FinOps tools and processes cost you is important for ensuring that you achieve the best possible return on investment between what you invest in FinOps and what it saves you on cloud bills.
The best approach is flat-fee pricing. This makes long-term FinOps costs — and by extension, FinOps ROI — easy to predict.
It also just makes more sense than traditional billing models FinOps tool providers use, given that most FinOps tools are Software-as-a-Service solutions whose operating cost for their vendors is fixed regardless of how much customers save.
Too often, however, companies launch FinOps programs without knowing what the programs will cost. Traditionally, FinOps tool providers charge customers either a percent of their cloud consumption or a shared savings model based on how much money the customer saves in the cloud.
Correlating FinOps pricing with the amount you’re spending in the cloud effectively equates to a cloud tax. And while the idea of a shared savings model may sound great at first, this model requires a burdensome level of analysis from both internal teams and from the FinOps partner.
They must agree on, report and track which savings count towards the monthly fee. It also may not deliver much savings beyond what you can get for free using insights generated by cloud service providers themselves.
This traditional approach to billing makes long-term FinOps costs unpredictable. Since you can’t predict exactly how much money FinOps will save you, you won’t know which portion of your tool budget you'll have to devote to FinOps a year or two or five down the road.
This is why flat-free pricing is the way to go.
4. Customizable FinOps Automations
There are plenty of ways to set up automations to help reduce cloud spending.
For example, you could use a cloud service providers’ native tools to turn off unused cloud servers automatically. But highly effective FinOps programs use automations baked into FinOps platforms that work across all clouds, simplifying the process of reducing spending.
Successful FinOps requires more than the ability to automate basic routines. You should also be able to build automations that enable custom capabilities, such as importing unique types of data.
Or a company may face special compliance or risk management mandates that it needs to factor into its cloud cost optimization plans. In that case, the ability to collect data related to risk management and correlate it with spending data is critical.
It’s easier to operationalize a custom cloud cost optimization strategy when you can automate it in ways tailored to your business. Some automations are trickier than others to build, but your FinOps program should be sophisticated enough to enable whichever automations you need.
For instance, your FinOps team might find it easy to create basic automations that turn some things off on nights or weekends. But can they also use automation to factor in changing drivers and software license types when updating elastic compute cloudEC2 instances from M5s (an older type of cloud server) to M7s (a newer server instance type based on more modern hardware), for example?
Can they automate the creation of policies for cross-region data transfers? Can they create automations that delineate your strategy to switch to standby servers for RDS, meaning cloud-based databases, across apps at different life cycles?
These are the types of advanced, custom optimizations that set highly successful FinOps programs apart. An ideal FinOps program provides the customizability to support unique needs like these.
Organizations that can’t customize their approach to FinOps end up with limited insights and cost optimization opportunities.
The Best FinOps Solution Is Out There for You
The bottom line: Don’t settle for a FinOps program that delivers some value but is difficult to execute or optimize.
The ultimate goal of any FinOps program should be to reduce cloud spending and improve the business value of each dollar invested in the cloud in the most effective way possible.
You can achieve this with FinOps platforms and processes that you can easily adapt and automate based on your unique business requirements. Hands-on help from vendors and predictable FinOps costs help, too.
