Three ways Cloud FinOps can maximize investments

By:  Amod Bhise

Organizations are moving workloads and applications to the cloud in an effort to modernize and improve agility. However, ongoing and often ad hoc cloud migration can undermine the predictability of spending patterns for cloud. Without a holistic picture of the enterprise cloud footprint, organizations can get trapped in a nonproductive cycle of overspending and underutilizing resources, creating a delta between their actual cloud budget and what’s achieved in terms of intended business goals.

FinOps best practices can counter the complexity of cloud migration, helping organizations rein in out-of-control cloud spend, optimize resources and maximize the business value of their cloud investments. In this article, I’ll explore how companies can maximize hybrid cloud investments with FinOps and discuss use cases in healthcare, energy and transportation.

How cloud FinOps can bring accountability to hybrid multicloud

A FinOps approach can help bring financial accountability to the hybrid multicloud model through a combination of technology, best practices and reimagined business teams. Through the FinOps financial lens, organizations can enable adaptable financial controls and achieve more consistent predictability in their cloud spend.

Companies can drive a culture of fiduciary responsibility and successfully run FinOps by following seven practices:

1. Change management: Facilitate culture change management, including a focus on business outcomes
2. Financial accountability and visibility: Drive financial accountability and visibility across the organization through showback and chargeback mechanisms
3. Optimization: Continuously optimize, taking proactive steps to identify avoidable expenses
4. Collaboration: Break down silos to ensure widespread team collaboration toward achieving joint key performance indicators
5. Automation: Leverage automation to boost productivity and focus on higher-value activities
6. KPIs: Ensure that shared costs are distributed appropriately to cost centers, budget owners and business units
7. Governance: Facilitate daily, weekly and monthly reviews to optimize usage, cost efficiency and the FinOps framework

While many providers opt for a platform or consulting approach to cloud FinOps, I recommend an emphasis on end-to-end engagement. Organizations will see stronger results when they map cloud FinOps solutions to specific needs, implement the FinOps framework and technologies, and using managed services if required.

How FinOps maximizes cloud investments in healthcare

Situation

A large North American healthcare provider struggled to upsize and downsize servers and properly identify underutilized resources. This led to increased costs and operational inefficiencies.

Approach

With FinOps-managed services, the provider was able to continuously optimize servers and storage quarterly to match business objectives. The provider established regular cadence reviews with stakeholders to facilitate actions, such as changing configurations or shutting down resources.

Outcome

With full visibility into the cost and use of services, the company reduced its software and server licenses, resulting in significant cost savings. Weekly performance assessments ensure that KPIs such as CPU and memory usage are maintained and optimized.

How FinOps creates savings on cloud investments in energy

Situation

Ausgrid is the largest distributor of electricity in New South Wales (NSW), Australia, providing power to 1.8 million customers and powering 60% of NSW’s GDP. As it moved forward on a cloud-first journey, the organization was experiencing soaring and unpredictable cloud spending.

Approach

Ausgrid assessed and matured its FinOps expertise while orchestrating FinOps practices through a team of certified practitioners charged with cost and resource optimization, tagging recommendations, and high-level technical and operational support.

Outcome

Thanks to deep optimization analysis, the team identified 1,264 potential cloud optimization savings opportunities across compute, storage, database, network and application services in just six weeks. They were also able to build the business case for FinOps, identifying areas of need and initial savings as well as preparing change management strategies aimed at getting the broader enterprise on board.

How cloud FinOps delivers optimization in transportation and logistics

Situation

A trucking and logistics organization wanted to create a standard cost structure as it expanded its cloud footprint and use of Microsoft Azure.

Approach

Along with creating a Cloud Adoption Office for FinOps, more comprehensive showback mechanisms, and robust governance frameworks, the company did an initial FinOps diagnostic assessment. This included an evaluation of financial operations, tagging recommendations, and optimization recommendation reports.

Outcome

Three of the 20-plus applications were assessed for optimization, with savings greater than USD 36,000. As the next steps, they are considering cost governance strategies and more regular optimization reviews.

The promise of FinOps for cloud investments

FinOps promises accountability and governance for soaring cloud costs, but it’s not a one-off cost exercise; rather, it’s a cultural and organizational shift that requires continuous optimization and change management leadership to deliver lasting business value. Adopting an end-to-end platform and service partner approach is an effective way to embed FinOps practices into organizational culture, execute continuous optimization and achieve maximum business value from your IT investments.

Amod Bhise, is Director, Offering Management at Kyndryl