What is FinOps?

Financial operations (FinOps) is a framework that helps organisations manage their cloud costs and optimise their cloud usage. FinOps is based on the principles of transparency, accountability, and governance. By taking into account functions within the cloud and effectively operationalising cost control and response, organisations now have a framework to help drive their journey into the cloud. 

As a cloud architect leading the FinOps practice at Netpremacy, I have seen firsthand its benefits. My clients have been able to gain efficiency in their cloud operations by implementing Netpremacy’s three building blocks of FinOps. We have developed a continuous improvement process that can be implemented at any point in the customer cloud journey. 

Inform

Our approach starts with meeting the customer where they are in their journey. Some customers are relatively new to the cloud and require further education to enlighten their path in the cloud. Others have already made great strides in the cloud and are now looking for the best route to scale their operations efficiently. 

No matter where customers are in their cloud journey, one thing remains the same. The importance of understanding metrics and the cost drivers in the cloud can’t be overlooked. Most cloud providers offer robust resources to help accomplish this task, so ensuring that our customers are aware of and using the tools that give insight into their cloud cost is typically the first step. Once comfortable with the tools, we now have a window to explore where cost inefficiency might lie. 

This leads us into the next phase.

 Optimise

This phase focuses on identifying and implementing ways to improve the efficiency and cost-effectiveness of a customer's cloud environment. Here, we offer advice and services to customers on processes that they could undertake to improve their rate of consumption in the cloud. We take a logical approach to identify and rank the most costly cloud operations being performed by the customer based on our previous ‘inform’ exercise. 

There are a number of different ways to optimise cost efficiency in a cloud environment. Some common examples we have helped customers with include: 

• Usage discounts: Many cloud providers offer usage discounts for customers who exceed a certain level of usage. By identifying and optimising for these discounts, customers can save money on their cloud costs.

• Rightsizing: Rightsizing refers to the process of ensuring that the right amount of resources are allocated to each workload. By rightsizing, customers can reduce their cloud costs without sacrificing performance.

• Licence or resource reservation: In some instances, cloud providers offer discounts for customers who reserve licences or resources in advance. By reserving resources, customers can ensure that they have the resources they need when they need them and avoid paying for resources that they don't use.

• Moving to serverless or SaaS products: Serverless and SaaS products are often more cost-effective than traditional on-premises solutions or online hosted domains (e.g. AWS). By moving to these types of products, customers can reduce their cloud costs.

Embed

The last phase, Embed, is the overall aim of FinOps.

The focus of this phase is ensuring that the operations, practices and solutions in the cloud are based on business drivers. 

FinOps enables businesses to not only gain control of their cloud consumption but also integrate performance metrics from other internal partners such as finance, product owners, and engineering teams. The key to this is communication. To ensure success, a dialogue around cloud operations across the business will need to be established. A large part of this exercise is bringing to light wasteful spending, so it is important to build an environment of trust between stakeholders and operators where consistent action on inefficiencies can be taken. Helping establish this forum is the end goal of our FinOps practice.

Finops, at its core, is a data-driven discipline. By helping our customers build dashboards and reports which provide a holistic overview of cloud consumption in a digestible format, we can create conversations around metrics and operations where stakeholders are able to build key performance indicators (KPIs) that better inform their future cloud endeavours. 

To learn more about our FinOps offering at Netpremacy, please contact your dedicated Account Manager or our team below: