How to Build a Solid FinOps Team Structure

How to Build a Solid FinOps Team Structure

FinOps teams are often cobbled together by whoever receives the monthly cloud spending bill, often with tens of thousands of lines of expenditures on it. The goal of these teams is simple: Resolve all these line items, then move onto their actual job duties.

To be effective, however, FinOps teams need to be built in an intentional manner. The team must be cross-functional and include members from executive chairs, to engineers, to finance and procurement. They shouldn’t focus on reactively managing payments - rather, they should work together to proactively analyze and optimize cloud spend.

Overall, this will require a larger shift in company culture, and the creation of dedicated processes to ensure FinOps teams work smoothly. Keep reading to learn what a FinOps team consists of, the importance of the FinOps team structure, and the roles within it.

The Goals of FinOps

The term FinOps is short for Financial Operations, and refers to the task of Cloud Financial Management. Those new to the term or to FinOps methodology often mistakenly assume the goal of FinOps is to save money in the cloud. However, the actual goal of FinOps is to get the most value out of every dollar spent in the cloud.

Achieving this goal often does include the deployment of cost-saving measures such as right-sizing and reducing waste. But it also includes finding ways to leverage cloud capabilities to add value and drive business outcomes. In order to reach your cloud spend goals with FinOps, your organization will need a strong team in place to carry out the necessary day-to-day processes. Without an effective FinOps team, you’re more likely to run into detrimental roadblocks along your journey.

The Goals of FinOps

Successful implementation of FinOps methodology requires more than utilizing software and tools that provide better visibility into cloud spend. It requires a complete culture shift. All individuals who are either charged with using the cloud to perform their work, involved in determining business outcomes, or managing the organization’s finances must work together to support the practice.

Teams are better able to manage cloud costs when all members take ownership of their usage and practices. Cross-functional teams made up of individuals in IT, Engineering, Finance, and more are encouraged to work together to achieve common goals, leading to improved visibility and control all while enabling more optimized production cycles.

A company culture shift will help you break down silos between Finance, Procurement, Engineering, and Executives. Best practices can be established across departments and teams, leading to intelligent decision-making and the ability to balance cloud spend against performance and productivity.

FinOps Team Roles

There are four primary team roles in FinOps, each with different jobs in the FinOps framework (in alignment with the FinOps Foundation).

  • Executives: This includes VPs, C-suite members, and anyone involved in a high-level leadership or decision-making role. Executives are tasked with driving accountability, building transparency into spending practices, and keeping a close eye on the overall budget.
  • Cloud Spend or FinOps Practitioners: This includes individuals with titles such as FinOps Analyst, Director of Cloud Optimization, Or Cost Optimization Data Analyst. They may be direct employees at an organization who have been specially trained, or they may be third-party practitioners brought in for their expertise. Team members in this role are generally in charge of forecasting cloud spend and budget allocation.
  • DevOps Teams: This includes Engineers and Operations team members or anyone whose primary role at an organization involves activities such as software development or IT operations. The DevOps team focuses on building and supporting services. They must track and monitor cost along with other performance metrics and look for ways to increase efficiency and identify spending anomalies.
  • Finance and Procurement: As the name implies, this role includes anyone involved in Finance or Procurement, such as a Technology Procurement Manager or a Financial Business Advisor. These individuals make use of FinOps reports for accounting and forecasting, as well as historical data in order to build more accurate cost models and engage in rate negotiations with cloud service providers.

Including stakeholders across the entire path through which cloud spend flows puts FinOps teams in the perfect position to both gain better insight and control, and optimize processes and work toward the goal of getting the most out of every dollar spent in the cloud.

The Importance of FinOps Teams

A survey of attendees at the recent IT Asset Management (ITAM) Virtual Summit shines some insight into just how important a well-structured FinOps team can be to an organization. For example, the survey respondents indicated the most challenging ITAM issues in 2021 are best practices (26.2%), cost reduction (25.4%), and accelerating program value (19.7%)… all areas that FinOps teams are well-positioned to address.

When asked how concerned they are with cloud control, 92% of respondents indicated that they were concerned at least to some degree, with over 50% being very concerned. This further validates that cloud spend, cloud control, and financial management are on the top of everyone's mind.

Survey respondents also indicated that governance (34.2%) and process design (28.9%) were the most problematic areas of their asset management efforts. Moreover, two-thirds of respondents indicated that asset management did not have a seat at the IT decision-making table.

This is unsurprising when you consider that many survey respondents are not yet implementing FinOps methodology in their workplaces. When an organization’s data layers, communications, and collaboration are not far enough along, they can’t properly measure how much they're spending in the cloud or the value it returns.

Final Thoughts

You can deploy best-in-class tools, but if they aren’t deployed or managed correctly by a strong FinOps team, then they will fail. SoftwareONE’s Managed FinOps Service  has been successful not just because of the tools we use, but the fact that we have the right knowledge in place to deploy and implement those tools correctly. This enables the customers cross functional FinOps team achieve actionable insights that they can leverage for their collaborative decision making. Having access to this quality data and the ability to interpret that data accurately makes it possible to gain the visibility and control needed for FinOps.

SoftwareONE’s PyraCloud platform is FinOps certified, and SoftwareONE itself is a FinOps certified service provider and we have a number of FinOps Certified Practitioners. This means we have the tools and the expertise to help you take back control of your cloud spend and we can guide you on how to successfully optimize your cloud portfolio.

Let SoftwareONE be Part of Your FinOps Team

SoftwareONE has the tools and experience to help you reach your FinOps goals, no matter where you are in terms of cloud maturity. Get in touch with our experts today.

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Tony Mackelworth, Head of Microsoft Advisory

Tony Mackelworth

Head of Microsoft Advisory

Cloud, Digital Transformation, Licensing, Software Procurement Services

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