Cloud FinOps benefits

The Cloud FinOps Guide: mastering cloud finances

date: 1 February 2024
reading time: 5 min

You might have heard about FinOps and you may be wondering whether it's a solution that can help you streamline your cloud resources. To help you get as much useful information as possible, we've prepared this Cloud FinOps Guide – do dive in to find answers to all your Cloud Financial Operations related questions!

What is Cloud FinOps?

Cloud FinOps (or Cloud Financial Operations) is an operational framework and a cultural practice that brings together finance, operations, and engineering teams to optimise the costs of cloud computing within an organisation.

Its goal is to maximise business value, ensure that cloud spending is aligned with business objectives, and resources are used efficiently without compromising performance.

For more on the subject have a look at our Cloud FinOps Guide: mastering cloud finances.

Transform your spending with the Cloud FinOps approach

One of the most important factors of Cloud FinOps approach is that it allows organisations to transform their spending in the cloud, allowing them to be more efficient, transparent and aligned with their business objectives.

Key to success in optimising cloud computing costs and maximising the value of cloud services is the continuous improvement and collaboration between the finance, operations and engineering teams.

Key principles of cloud financial management

Cloud FinOps approach is often associated with cloud financial management, which involves a set of principles and best practices for optimising and managing cloud costs.

Key principles of cloud financial management include cross-functional collaboration between finance, operations, and engineering teams, visibility and transparency to enable informed decision-making and help teams understand the financial implications of their actions, accountability and ownership, automation that provides real-time insights and allows for proactive cost management, and continuous optimisation of costs and performance.

Cloud FinOps benefits and advantages

Cloud FinOps brings several important benefits and advantages.

Some of the most significant ones include:

  • better cost optimisation: Cloud FinOps helps organisations optimise their cloud spend, eliminate unnecessary cloud costs and cloud waste, and ensure that resources are used efficiently;
  • improved cross-functional collaboration: Cloud FinOps encourages collaboration between finance, operations, and engineering teams, fostering a holistic approach to cloud financial management;
  • improved resiliency: Cloud FinOps allows to focus on service quality, security posture, and operational stability;
  • increased speed and efficiency: Cloud FinOps allows for better time to market and accelerates fluidity in product and service delivery, making the organisation more competitive.

How to measure Cloud FinOps impact on organisation?

We now know Cloud FinOps brings great benefits, but how to measure its actual impact on an organisation? To do it, it’s crucial to define key performance indicators and success metrics related to cost optimisation, operational efficiency, and alignment with business goals.

To measure cost savings and optimisation calculate the percentage of cost savings achieved through Cloud FinOps practices:

(Initial Cost – Current Cost)/Initial Cost x 100%

To check resource utilisation and rightsizing measure the percentage improvement in resource utilisation:

(Rightsized Instances/Total Instances) x 100%

To check operational efficiency calculate:

(Time Spent Before – Time Spent After)/Time Spend Before x 100%

Remember it’s important to customise these metrics based on your organisation’s specific goals, objectives, and context.

By regularly tracking and analysing these metrics you will gain insights into the ongoing impact of Cloud FinOps practices and you will be able to identify areas for further improvement.

Future trends in Cloud FinOps: what’s next for cloud finance?

With the ongoing evolution of the cloud computing landscape, the field of Cloud FinOps is expected to adapt to new technologies, challenges, and opportunities.

Trends likely to shape the future of Cloud FinOps include:

  • Advanced sutomation and AI/ML integration:
    The integration of advanced automation, artificial intelligence (AI), and machine learning (ML) into Cloud FinOps practices will become more prevalent. Automated tools will play a crucial role in real-time cost monitoring, anomaly detection, and predictive analytics for more effective cost optimisation.
  • Increased focus on multi-cloud and hybrid environments:
    With organisations leveraging multiple cloud providers and adopting hybrid cloud architectures, Cloud FinOps will increasingly address the challenges of managing costs across diverse environments. This includes optimising spending and governance in both on-premises and various cloud platforms.
  • Focus on sustainability and green computing:
    Given the ever growing emphasis on environmental sustainability, Cloud FinOps will increasingly consider the environmental impact of cloud operations. Organisations may factor in green computing principles when optimising costs and selecting cloud services.

Prepare yourself for a Cloud FinOps audit

Cloud FinOps audit means you need to ensure your organisation’s financial operations related to cloud usage are well-documented, compliant with policies, and aligned with best practices.

Some key steps to remember here are:

  1. Take care of your Cloud FinOps practices, such as policies, procedures and workflows. Have them ready and in order, remember they should cover things like cost allocation, budgeting, governance.
  2. Be sure you can demonstrate visibility and transparency as to how your cloud resources are allocated and used.
  3. Check all your governance policies, including compliance with industry regulations, security standards and internal guidelines.
  4. Keep in order all your documents regarding the collaboration with external partners (namely cloud service providers).
  5. Think about your budget and all financial documentation – be sure you can demonstrate that your organisation has a structured approach to budgeting and forecasting for cloud costs.
  6. Get ready all documents and evidence regarding all security measures implemented to protect your cloud resources and data.
  7. Think also about showing your efforts to consider environmental sustainability, continuous improvement initiatives, cross-department collaboration and educational initiatives.

Crafting a cost-effective Cloud FinOps roadmap with Future Processing

Developing a cost-effective Cloud FinOps roadmap is not an easy task, especially if you’ve never done it before or if you don’t have specialists that could deal with it.

When thinking about crafting it, a good idea is to look for an external partner that could do it for you or help you in the process. At Future Processing we have a wealth of experience in providing cloud services at the highest level and in creating Cloud FinOps roadmaps, and we will be happy to share it with you and make it work to your success. Just get in touch and let’s start working on it together!

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