FinOps as the name suggest isn't just limited to financial management practices rather it's a cultural shift that promotes collaboration across traditionally siloed teams. By fostering a shared responsibility for cloud costs, FinOps encourages all stakeholders to work together towards efficient and effective cloud utilization. This collaborative approach is crucial in the cloud era, where costs can spiral out of control without proper oversight and management.
FinOps advance the people who manage their application or resources on cloud and thus it's importance focuses on technologies, infrastructure and even the people who operate within the space.
What are the Problems focused by FinOps
Cloud present some of unique problem to technology and investments:
- Decentralized
So the traditional technical usage and resources planning forecasts aren't working nowdays anymore, the moment a devops engineer or any developer deploys a change or part of application, the billing starts the stopwatch reading every second or milli-second, which makes up the point for our second problem.
- Variable Cloud Spending
Cloud is being built per second or even per milli-second in some cases which is highly variable in some cases which is highly variable thus it brings massive functionalities in demands whether it's from external source or customer to effectively predict/forecast the capital that would be spent by the organization based on which they can bring the future plans by selling subscriptions, licenses or service to dilute the expenses.
- Massively Scalable
Cloud is massively scalable to increase the efficiency which can bring overprovisioning due to higher expectations by the developers and by the investors which brings even more unpredictable forecast of technological capital investments.
Gartner estimated the spending at stake from shift to cloud with a figure of about $ 1.5 Trillion.
Cloud FinOps is an evolving cloud finance management discipline and cultural practice that:
Enable organizations to get maximum business value.
By helping engineering, finance and business teams.
To collaborate on data-driven spending decision.
FinOps is involved in a lot of collaborations with the developers and folks who can contribute by writing documentations and organize forms to express the importance and behavior we need to build in this increasing cloud shifting.
It defines/set the behavior for taking accountability for what we do with technology. It enable organizations to get maximum business value by helping engineering, finance and business teams by collaborating them together using data as the decision currency for all the actions. Making it really important to use this insane amount of data, survey and review results in order to build a better business interface and directions through valuable directions.
FinOps Foundation program
FinOps Foundation have been making constant efforts to get people involved in the advocacy, spreading awareness with solutions and problems amongst the different organizations and groups by supporting separate individuals by helping them acquire skills and knowledge which can help them in their profession.
FinOps Foundation helps individuals by:
Building the Communities: To increase the network and credibility of people in the domain.
Advancing their carriers: Through talent development, training and certifications.
Defining Best practices: Through Open Source collaborations, working groups like SIGs.
FinOps also helps by:
Holding a job portal for the board
An active Sustainability team to look look out for the sustainability and take the required steps accordingly in order to reduce carbon footprints and emissions.
Focusing on Green and clean energy by challenging developers to stay informed and accurate to their carbon footprints.
By trying to build a standard billing template to resist any repetitive efforts in case of more than one organization/person got same number of resources.
FinOps frameworks
FinOps is an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, business and financial teams to collaborate on data-driven spending decision.
Principles:
Teams need to collaborate
Everyone takes ownership for their cloud usage
A centralized team drives FinOps
Reports should be accessible and timely
Decision are driven by business value of cloud
Take advantage of variable cost model of cloud
Domains:
Understanding Cloud usage and costs
Performance Tracking and Benchmarking
Real-time decision making
Cloud rate optimization
Cloud usage optimizations
Organizations alignment
Thus there has to be mutual collaboration between different personas relating to the different field of development team, finance and business.
It is also responsible for accountability and responsibility for the organization to resist any extra computational running or wasted by our application while running resources which is now the work of the centralized team made up of staff from different departments and personas like FinOps practitioners, Executives, Business/product owner, Finance/procurement Engineering operations to share their experiences and learn together.
FinOps Domain and Capability
Understanding Cloud Usage and Cost
Cost Allocation
Data Analysis and Showback
Managing shared costs
Data Ingestion and Normalizations
Performance tracking and benchmarking
Measuring Unit Costs
Forecasting
Budget Management
Real-Time Decision Making
Managing Anomalies
Establishing a FinOps and Accountability Structure
Cloud rate optimization
- Managing Commitment Based Discounts
Cloud Usage Optimization
Onboarding Workloads
Resources Utilization and Efficiency
Workloads Management and Automation
Organizational Alignment
Establishing FinOps Culture
Chargeback & IT Financial integrations
FinOps Educational and enablement
Cloud policy and Governance
IT Asset Management integration
Benefits of FinOps
There are multiple organizations who are recognizing the importance of FinOps and providing their contribution by becoming a part of this community which are mainly due to the following benefits they expect:
Cross organizational trust and goodwill
Breaking down of dept. silos
Accountability and auditability
Reduction in cloud waste = lower cost
More predictable cloud spending
Acceleration in innovation, lower cost of failure.
More resources to learn about FinOps
The Linux Foundation organizes a Finance Forum in Open Source where like minded people gather to discuss about the Finance forums and decisions every year at Open Source Finance Forums(OSFF), Fintech Open Source Foundation(FINOS) summits and many other conferences and meetings. So in case you want to enjoy some more topics related to finance in open source and cloud then here is the playlist for you:
Open Source in Finance Forum (2022): https://www.youtube.com/playlist?list=PLbzoR-pLrL6rr72M1w7pTYw-X8FduLz1v
Here is the learning website of FinOps Foundation: https://learn.finops.org/
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