First and foremost, FinOps is about cultural change, breaking down the silos between teams that, historically, haven’t worked closely together. When this is done right, the finance team uses language and reporting that moves at the speed and granularity of IT, while engineering teams consider cost as a new efficiency metric. At the same time, the FinOps team works to continuously improve agreed-upon metrics for efficiency. They help define governance and parameters for cloud usage that provide some control, but ensure innovation and speed still flourish.
Think first about the business value of cloud spend, not the cost. It’s easy to think of cloud as a cost center, especially when the spend reaches material levels. In actuality, cloud is a value creator, and the more you use it, the more cost it will incur. The role of FinOps is to help maximize the value created by the spend. Instead of focusing on the cost per month, focus on the cost per business metric, and always make decisions with the business value in sight.
Cloud costs are based on cloud use, which comes with a straightforward correlation: if you’re using the cloud, you’re incurring costs, and, thus, accountable for cloud spending. Embrace this fact by pushing cloud spend accountability to the edges of your organization, all the way to individual engineers and their teams.
In the world of per-second compute resources and automated deployments, monthly or quarterly reporting isn’t good enough. Real-time decision making is about getting data, such as spend changes or anomaly alerts, quickly to the people who deploy cloud resources. Real-time decisions enable these people to create a fast feedback loop where they can continuously improve their spending patterns, make intelligent decisions, and improve efficiency.
Cultural change works best with a flag bearer. A central FinOps function drives best practices into the organization through education, standardization, and cheerleading. Maximize the results from rate optimization efforts by centralizing them, which gives your teams on the edge the freedom to maximize the results from usage optimization. The most successful companies decentralize using less, and centralize paying less.
In the decentralized world of the cloud, planning for capacity moves from a forward-looking, “What are you going to need to cover demand?” perspective to a backward-looking, “How can you ensure you stay within your budget given what you’re already using?” perspective. Instead of basing capacity purchases on possible future demand, base your rightsizing, volume discounts, and RI/CUD purchases on your actual usage data. Since you can always purchase more capacity to fit demand, the emphasis becomes making the most out of the services and resources you’re currently using.