Turn Into A Cloud Finops Hero: 3 Successful Finops Journeys Show How

This common fear of "getting it right" prevents many organizations from successfully planning, quickly moving, and gaining the most business value out of their public cloud. And that fear is real.

How’s a successful FinOps program measured?

The quality or success of a FinOps program is too often measured in terms of "maturity." That is defined by the achievement of certain KPIs, which are inherently finance focused and leave no room for business value trade-offs.

FinOps, Cloud Optimization, Cloud Cost Management — whatever you want to call it — is less about stringent methods and measures. It’s more a philosophy an organization applies to its specific situation and needs in its effort to drive the most business value possible out of the cloud.

To support that last statement, here are a few examples of strikingly different, but successful, enterprise FinOps journeys.

Use case: global FinOps program

The first example is a global enterprise with federated lines of business (LOB) that wanted to move its IT costs from a CAPEX model to OPEX. To do so, there was an effort to release cash from IT investments and reinvest in the actual business. And the CIO preferred to shift business value accountability and ownership of cloud service usage from central IT operations to LOB application owners.

But this organization’s CIO also recognized the need to accommodate LOB idiosyncrasies along its journey to FinOps maturity. That journey was a massive, multi-year organizational change effort, requiring significant communication and education of the business users of its cloud services.

In this use case, because of the cultural diversity and sheer size of the enterprise, common KPIs helped create a mutual understanding and language around FinOps. Furthermore, using the concept of "maturity" helped create a roadmap with milestones that were easy to understand for an enterprise new to cloud concepts.

The result was a global FinOps program that distributed 100% of its cloud costs directly to the federated LOB. Those LOB were then able to achieve, on average, a less than 8% overall forecast to actual spend variance. That’s quite a feat for a global enterprise.

Use case: financial services FinOps program

In this example, the enterprise was less concerned with building a cloud-savvy business and more concerned with common cloud usage standards. The organization supported multiple LOB, which started developing new e-products in the cloud and were already managing the business value of cloud services they consumed.

The situation, however, left the organization’s vice president of the centralized IT services team worrying about proper levels of governance. But this IT leader didn’t want to become an obstacle to the LOB’s need for agility, yet recognized the vital need for enterprise standards, covering security, privacy, and cost.

So, the vice president of IT needed a FinOps program less focused on financial KPIs and teaching the LOB about cloud usage. Instead, the program was tailored to be more focused on creating alignment and consensus of proper cloud usage. This approach, in turn, affected service costs, which, typically, are much more when encrypted.

In this case, the concept of FinOps "maturity," at least as it stands as of this writing, had no value.

By implementing a common set of solution design patterns and cloud service configuration standards, this organization reduced its technical debt, increased reusability, and decreased audit findings from a security perspective. It was also able to get spend variance under 10% after 90 days.

Use case: cost optimization for software vendor

Finally, here’s a use-case example if you’re solely concerned about reducing cloud costs.

An independent software vendor recently completed a cloud migration and was converting its business model to SaaS, and simply needed help reducing costs. And fast.

Why? Because of its software product’s architecture, the software vendor’s CEO faced four times previous operating costs after moving to the cloud.

There was no need to educate this organization about cloud usage concepts. And there wasn’t even a need for a formal FinOps program. The owner of the cloud services already understood the costs and reasons for those costs. So, the business value was simply cost reduction. KPIs essentially had no meaning, unless the KPI was monthly spend.

FinOps, in this case, was no more than an exercise in cost optimization, resulting in annual savings of nearly $2 million.

Conclusion

Each of these use cases shows a notably distinct, real-world example of how contextual FinOps really is.

As a global recession looms, you’re looking for ways to reduce costs and maximize the business value of your public cloud use. Remember that your journey is as unique as your business because no model fits every situation.

If you’re responsible for managing cloud spend, consider that organizations have saved between 50% and 72% off on-demand cloud spend through well-managed resources and spend-based commitment planning.

Specifically, if you’re the vice president of IT Ops, be aware that organizations have saved thousands of person-hours and reduced cloud costs by hundreds of thousands of dollars each year by implementing effective cloud automation.

So, whether you’re implementing a full cloud operating model, or just managing down your cloud cost, it helps immensely to collaborate with a trusted Cloud FinOps partner like SoftServe who understands the nuances of supplying a FinOps program that leads you to the right place for your organization.