Going the Distance with FinOps

Cloud Financial Management

Preparing to Go the Distance with FinOps

Are You Prepared to Go the Distance with FinOps?

Organizations around the world are undergoing a paradigm shift in how they manage their IT estate. Years ago, the IT team focused on acquiring and managing products to help their teams work smarter – but with the advent of the cloud, IT is quickly becoming more service-oriented. Due to the service-based nature of cloud applications, IT teams are now able to deliver benefits like increased flexibility, agile methodologies, and instant scalability, helping them gain an advantage in a competitive marketplace.

However, those same benefits have a dark side: They disrupt the standard Software Asset Management (SAM) processes that organizations have spent years developing, resulting in challenges with governance, spending, and corporate culture. processes that organizations have spent years developing, resulting in challenges with governance, spending, and corporate culture.

Enter Cloud Financial Management. Also known as FinOps, this is the financial operating model for the cloud, designed to increase accountability for cloud spend and encourage financial and operational control in your organization’s corporate culture. This ensures that your cloud costs are optimized on an ongoing basis, and further helps you use data-driven decision making to fulfill business demands.

With more organizations seeking to start their FinOps initiative each day, SoftwareONE teamed up with the FinOps Foundation to discuss why businesses need FinOps and how to address the most common challenges they encounter on their journey to cost optimization. Let’s cover a few of the most impactful points from the discussion.

Why FinOps?

The cloud shouldn’t be thought of as another data center under IT’s control. While data centers were the sole responsibility of IT, the cloud spans across your entire organization – and anyone that uses the cloud must share responsibility for their portion of spending. Consequently, your existing software asset management processes designed for on-premises technology simply won’t account for the disparate nature of the cloud. A new strategy will be required to ensure all users are accountable for cloud spend.

While creating a mature FinOps strategy requires plenty of time, effort, and collaboration, it will pay dividends in the future. A mature strategy will help you maximize each dollar you spend in the cloud by creating transparent accountability processes while employees navigate a cloud transformation. For this reason, the value of a mature FinOps strategy is only limited by your team’s capability for innovation.

Resolving Common Challenges with FinOps

The cloud comes with unique considerations around governance and spending that simply are not present for on-premises solutions. However, with a little guidance, these challenges are by no means insurmountable. Let’s dive in.

1. Empowering IT to Take Ownership of the FinOps Initiative

FinOps is a crucial part of Software Lifecycle Management, which centers on IT taking ownership of the software lifecycle. This is easier said than done since many employees outside of IT use the agility and flexibility of the cloud to circumvent traditional procurement processes. Software Lifecycle Management, which centers on IT taking ownership of the software lifecycle. This is easier said than done since many employees outside of IT use the agility and flexibility of the cloud to circumvent traditional procurement processes.

Under a FinOps model, IT teams must take initiative to become well-versed on the rules and processes necessary to rein in extraneous software and resource consumption. They can start by examining what their current organizational structure looks like, how much budget each team has for cloud expenditures, and how to communicate with stakeholders across departments to ensure everyone understands the value of following FinOps processes.

For many IT teams, this is a tall order – don’t be afraid to phone in an expert if your team finds it difficult to get a firm grasp on all the moving parts.

2. Creating a Collaborative FinOps Strategy Across Business Units

Today, 94 percent of organizations use the cloud. If you’re part of that majority, it’s fair to say almost every individual in your organization is using the cloud in some capacity. So, while IT has ownership over your FinOps strategy, a smooth adoption strategy and ongoing collaboration with the rest of the organization will be key.

IT teams should start by becoming familiar with the responsibilities and budgets of each department in your organization. Then, identify the user champions that will help them kick-start your FinOps strategy – try to get at least one from each department. Once your IT team has found key stakeholders and understands how their team impacts cloud spend, it’s time to get those stakeholders up-to-speed on what FinOps is, and basic steps they must take to start the initiative.

For example, the IT team needs to educate stakeholders on how to use standardized tagging, tracking, and reporting processes to ensure all cloud spend is properly accounted for without undue delay. Then, those stakeholders need to ensure the concepts are well-understood and adhered to by every member of their team. However, this is not a solely top-down process – every employee in the organization should have a say in how the FinOps strategy develops.

3. Enabling the Culture Change Required to Continue Supporting FinOps

Getting teams to stay accountable for cloud spend can be a hard topic to breach. After all, employees will immediately see a short-term benefit to implementing new cloud services without prior authorization – they’re much less likely to realize how staying accountable ultimately benefits the entire business. While teams may initially commit to agreed-upon processes, ensuring they continue to follow through requires a dedicated, prolonged culture change.

Cultivating a culture that values FinOps is essential to achieving a balance of accountability and agility. IT teams need to drive forward a culture that enables communication and breaks down silos between teams that scarcely collaborate. Further, you must ensure they acquire FinOps-certified tools that make it easy for teams – even those without technological proficiency – to stay accountable. Finally, your team should follow up with relevant metrics and provide constructive feedback to help every team understand the impact of cloud financial management.

When every team feels they have an equitable impact on creating and optimizing your FinOps strategy, they’re much more likely to commit to following the protocols they helped put in place.

Want to Learn More about FinOps?

Watch this collaborative webinar from SoftwareONE and the FinOps Foundation to learn the most important considerations for your FinOps journey.

Request Your Webinar

Reaching the Finish Line

FinOps is a marathon – not a sprint. Going the distance requires the IT team to spearhead initiatives to foster organization, dedication and perseverance from multiple parties across your organization. Unfortunately, many IT teams are unsure if they have the skills required to follow through on the entire breadth of the initiative.

Partnering with a knowledgeable set of experts who have helped others complete a similar goal will put you in a much better position than going it alone. SoftwareONE is prepared to help your team’s FinOps initiative deliver compelling results with unbiased performance assessments, best practices, and continued support in your culture change initiative. With a little help from our experts, we’ll ensure your team crosses the finish line.

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Author

Jonas Lazar

Jonas Lazar

Principal Business Consultant & Senior Project Manager, Services

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