In the most recent FinOps Foundation state of FinOps report, the smallest percentage of FinOps survey respondents were those in finance (4%) and procurement (1%). The overwhelming majority of contributors came from IT, engineering, DevOps, consultant, product/project management, and executive roles.
This lack of collaboration with ITAM is a missed opportunity, especially when one considers that the first phase of FinOps is to inform.
How can everyone on the team be informed and contribute to data and decision-making if the ITAM team is not integral to the conversation?
Clearly, the core principles of FinOps require everyone to be on the same page for the process to be successful. FinOps must be inclusive company wide.
To fully appreciate why ITAM inclusion is critical to the success of FinOps, we must examine the principles that lie at the heart of FinOps.
The FinOps Foundation outlines several guiding principles to help your organization ensure that you’re maximizing business value through cloud financial management. These principles include:
Rather than each team working in its own isolated silo, FinOps promotes collaboration between teams. Through collaboration and shared objectives, an organization can better create a culture of accountability and continuity to achieve collective goals.
Each team should be responsible for managing its own cloud usage within its budget. In this way, there is accountability for cloud spend at all levels of the organization. Showback and chargeback are two methods designed to assist organizations in establishing this accountability.
A centralized FinOps team forms an organization’s cloud cost center of excellence (CCoE). This group engages with the rest of the company to manage cloud strategy, governance, and best practices.
Reports help determine if resources are under- or over-provisioned. Efficient, open reporting from every team results in transparency and drives continuous improvement.
In addition to tracking cloud costs, a FinOps framework will drive decisions with the objective of increasing the cloud’s business value.
By monitoring resource spend, an organization is assured optimal use of resources that align with financial forecasts.
As these guidelines show, equal participation from all teams, including the ITAM team, is essential to the success of an organization’s FinOps framework.
Effectively implementing the FinOps principles requires that an organization continuously operate through the FinOps lifecycle:
A centralized FinOps team consists of a representative from each team. This cloud center of excellence (CCoE) examines and analyzes cloud spend and helps the team create budgets and forecasts for each unit. Utilizing a company-created dashboard, the CCoE informs all units of costs and cloud spend.
Once the CCoE has determined cloud spend, they look for ways to optimize costs and usage while eliminating waste. This could include comparing third-party resources to ensure cost efficiency and value or developing a long-term cost savings plan.
In this phase, the FinOps team examines ways to achieve goals. Once these initiatives are established, they ensure the entire organization is aware of them and is given the resources needed to reach these objectives.
The FinOps principles and FinOps lifecycle clearly support the need for enterprise-wide participation to ensure success. But the necessity of including ITAM in the process goes even further.
Each team—procurement, ITAM, finance, IT, DevOps, or security—has a unique perspective on cloud computing. But at its core, ITAM has always leveraged data to make business and financial decisions.
What’s more, ITAM is an expert at solving challenges many organizations struggle with, including how to effectively utilize chargeback and showback to create a culture of accountability, acquire clean, consistent data, and analyze it to drive optimization.
ITAM is vital to an organization because it diminishes risk, ensuring compliance with software licenses and subscriptions to avoid severe penalties. Additionally, ITAM helps companies optimize IT investments by redistributing or eliminating underutilized assets while guiding making well-informed future IT investment decisions. Finally, by establishing asset standardization company-wide, ITAM provides consistency, saving time and optimizing productivity.
ITAM possesses the skill set and expertise FinOps requires to perform its crucial tasks. The two share many similarities regarding objectives, principles, and approaches. Working together gives an organization the visibility and control needed to mitigate increasing IT complexity and cost.
However, if ITAM and FinOps do not unite and continue to operate as separate entities, opportunities to ensure maximized value from IT asset investments could be lost. With a focus on technology assets and limited visibility into the cloud, ITAM could be missing crucial data related to cost optimization. Similarly, developers or engineers may overlook software costs, creating a gap in fully factoring cloud spend.
By bringing these units' strengths, skills, and perspectives together, enterprises are assured of a comprehensive overview of IT assets, cloud utilization, and spending that will drive optimal return on IT asset investments. Ultimately, FinOps is about organizational change, transformation, control, and governance. The inclusion of ITAM at the table ensures this holistic process is a success.
Bring accountability to your cloud spend to realize maximized value from your investments. Download our ebook:
Bring accountability to your cloud spend to realize maximized value from your investments. Download our ebook:
