You may have heard the term FinOps a lot – it’s a buzzword that’s been flying around the industry for a little while now. But what actually is FinOps? In this blog we answer that question, explain why FinOps is important, and tell you how to embed FinOps principles into your business.
As we explored in recent blog posts on optimising cloud spend and making the most of your cloud investment, many businesses are looking to bring their cloud costs under control and achieve visibility, predictability, and efficiency. This can be challenging – a 2022 Statista report noted some of the cloud financial management challenges businesses face, including forecasting, automation, and reporting amongst others. FinOps principles are a great way to overcome these challenges and create a sustainable framework for cloud optimisation.
In this blog we explain what FinOps is, why it’s important, and how you can embed it into your business.
Let’s jump in.
What is FinOps?
FinOps – a blend of ‘Finance’ and ‘DevOps’ – is a cultural practice that enables organisations to manage their cloud costs. FinOps requires ownership and collaboration between cross-functional teams, including engineering, finance, technology, and business. By working together in alignment with FinOps practices, these teams can achieve financial visibility, control, and predictability – enabling them to gain control over cloud consumption, while also making informed decisions to deliver services better and faster.
Why is FinOps Important?
Organisations that implement FinOps can realise a number of benefits:
- Improve visibility. FinOps provides greater visibility into your organisation’s cloud spend, offering transparency around what is being spent – and where.
- Make better decisions. With increased visibility comes empirical evidence that enables your organisation to make better decisions around how it allocates cloud spend.
- Optimise cloud spend. FinOps enables your organisation to identify and address inefficiencies, optimising cloud spend by ensuring it is focused where it is needed.
How to Embed FinOps Principles
FinOps involves defining a strategy that includes both proactive and reactive activities. Your organisation can implement FinOps principles by following an iterative process:
- Discover. Audit cloud costs and allocate to achieve visibility into what is being spent – and where.
- Inform. By establishing your FinOps maturity level, you can prioritise maturing the capabilities that provide the highest business value.
- Plan. Create a cloud spend forecast and learn from cloud spend trends and best practices.
- Monitor. Configure the native FinOps tools available through your public cloud platform.
- Optimise. Identify remediation items and create a roadmap to address them.
- Operate. Apply optimisation techniques to reduce the total cost of cloud ownership.
- Repeat. FinOps is an iterative process – you should return to the discover phase regularly.
Leverage FinOps to Control Your Cloud Costs
FinOps will enable your business to improve visibility, make better decisions, and optimise your cloud spend. With budgets stretched and a challenging operating environment to contend with in 2023, all businesses should consider implementing FinOps best practice principles.
Six Degrees enables organisations to introduce FinOps principles that can lead to savings of between 18 and 40% of monthly Azure spend, if acted upon. Find out more about our FinOps High Level Report and Workshop.
You can learn about cloud best practices through our Cloud Masterclass education series. The Cloud Masterclass series will enable you to gain confidence in your skills, grow your knowledge, and experience real world discussions on the latest cloud technologies and issues with peers and industry experts. Register your interest.