3. 3
Questions like:
With “company leaders looking for ways to achieve higher business resiliency, CIOs and CTOs can expect
uncomfortable questions about the costs of their cloud programs.”
— McKinsey
Probably not. More than 30% of cloud
spend in 2021 was wasted or inefficient.
Why are our cloud costs three times higher than anticipated?
Why are we 40% over our cloud budget?
Is our cloud spend being used wisely?
By the way, the answer
to that last one is:
6. 6
What is FinOps?
Cloud Financial Operations — FinOps for short — is the practice of bringing finance and operations
together to achieve better control and accountability over cloud costs.
It works like this:
Then the cycle begins again.
Teams gain visibility into
their cloud costs.
They work together to
achieve those goals.
They take strategic measures to
optimize their cloud footprint and
develop aligned goals.
Credit: FinOps Framework by FinOps Foundation
7. 7
So instead of this:
Finance person Engineer
This project is
over budget.
I have no idea what it
should cost. But you want a
great product, right?
8. 8
You get this:
Finance person Engineer
Looks like the cost of
[X feature] seems high.
We’ll see what we can do.
Is there anything you can do to
help increase our ROI on this
product?
9. 9
With FinOps:
Everyone owns costs and has
financial accountability
Everyone has the same business-
driven priorities
Everyone collaborates to
maximize the cloud investment
10. 10
Most importantly, your smarter
spend strategy gives you control
over cloud costs and increases
the organization’s profitability.
11. 11
How do you make this kind of
cultural change?
To ready your organization for this new way of
thinking, start by making changes in support of
the six main principles of FinOps.
12. 12
Use incentives, reminders, and positive
encouragement when your employees make
smarter cost decisions.
1. Encourage teams to
collaborate on cost
decisions
That looks like this
12
Cost anomaly alerts detect unusual spending
patterns and notify engineers, helping prevent
budget overruns before they happen.
13. 13
Start analyzing the unit economics of your
business. Use the data to inform future
decisions about where to grow and where to
cut costs.
2. Make decisions based
on the business value of
the cloud
That looks like this
13
If you know that a specific customer segment
costs your business more, you can adjust your
pricing to accommodate for different usage
across these segments.
14. 14
To encourage ownership of usage and costs,
create KPIs around cloud financial management
3. Give individuals
ownership over their
cloud expenditures
That looks like this
14
Keep orphaned resources to around 5% or
less of your used resources (engineering
team)
Tag at least 90% of taggable resources
(product team)
Stay within xx% of budgeted cloud spend
(finance team)
15. 15
Platforms like CloudZero break costs down into
individual, granular parts so engineers can see
how their decisions affect costs in real time.
4. Give everyone access
to granular, timely, and
easy-to-understand
financial information.
That looks like this
15
If your engineers have cloud spend data at a
level of hourly granularity, they can see if your
costs tend to spike at a particular time of day
and get clues about how best to optimize.
16. 16
This internal task force helps stakeholders
understand their cloud footprint in a way that’s
important to them.
5. Create a Cloud Center
of Excellence to drive the
FinOps effort
That looks like this
16
Create a team in charge of establishing best
practices and guiding individuals on how to
allocate costs, tag resources, and check
spending results — all with an eye toward
connecting business outcomes with technical
activities.
17. 17
That looks like this
6. Pull the right levers to take advantage of
the cloud’s variable cost model
Think of cloud costs as a series of levers that can be pulled to varying degrees and fine-tuned until
the perfect balance appears, producing significant cost savings.
You discover you’re spending $10,000
per week on a single S3 bucket.
You investigate and find the resource
isn’t being used for anything critical.
You pull a lever by switching off that
resource. Savings: $520,000 per year
18. 18
These practices form the foundation of FinOps, but how do you
actually change the culture of your organization so you can get
from Point A to Point B?
First, learn about the FinOps Foundation’s suggested adoption process …
Do your research
Seek out stakeholders
You will need senior level sponsorship &
supporters to build momentum.
Talk with Sponsor & key Advocates
Have one-on-one conversations with
each of them to determine adoption
strategy 1
Clearly articulate pain points
During your conversations, write down
the problems being experienced by the
organization (e.g. cloud costs breaking
business cases; lack of cost visibility by
cloud consumers, etc.)
Research impacted groups
Identify the teams and individuals, during
your conversations, who are affected by
the pain points.
Create a plan
Paint the future-state.
This should appeal to the business
(valuation of technology like cloud,
unit economics, etc.)
Identify an organizational “home”
for the FinOps function. This may be
in a CCoE, in finance, or in IT.
Identify candidate early-adopter
teams
Identify KPIs that will be used to
measure the FinOps function as well
as ways to measure engagement
and performance of stakeholders
like business units and application
teams.
Bring supporters together
Highlight current state, pain points,
other issues
Demonstrate what Crawl, Walk, Run
would look like for the organization.
Present the roadmap
Get feedback from the executive
sponsor and adjust as needed
Including initial team size, budget,
timeline for initialization
Value proposition (e.g. ROI such as the
cost of having a FinOps function vs. an
ongoing reasonable cloud overspend)
Perform initial resourcing
Request support from Sponsor
to recruit other executive
leaders as sponsors
Form a change coalition (true
org. Influencers & stakeholders)
Get budget approval, headcount
Procure new tool (if appropriate
at this stage of the roadmap)
Credit: Adopting FinOps by The FinOps
Foundation
19. 19
Second, develop a roadmap for your own organization.
Credit: Dean Oliver & Mike
Eisenstein (Accenture,
LLP); Adopting FinOps by
The FinOps Foundation
21. 21
CloudZero supports FinOps practices by giving you the data required to
implement the six principles and maximize your cloud ROI.
One company that uses CloudZero as part of its
FinOps effort has saved nearly $3 million on
cloud costs.
They’ve also reduced the cost of their top
product feature by 80% and have more
strategic conversations about cloud spending.
22. Schedule a demo today to see how
Interested in implementing FinOps at
your organization? CloudZero can help.