Driving Business Success with FinOps: Unlocking the Full Potential of Cloud Technology

Transitioning from traditional IT to the Cloud is a process that, when successfully implemented, generates significant benefits to organizations. However, 80% of the top managers (McKinsey Study: Unlocking business acceleration in a hybrid cloud world, July 2019)?admit they did not get the desired benefit from migrating to the Cloud, considering the risk of financial waste related to inadequate cost control.?

Implementing the cultural practice of #finops allows mitigation of this belief and the risks mentioned above, promoting the optimization of costs while using Public Cloud architectures.

What is FinOps ?

#finops is a cultural practice that allows cost management efficiency, with defined accountability regarding Cloud usage, targeting Cloud’s flexibility advantages, thus ensuring maximisation of the value created by spending. More than an engineering challenge, #finops is a business transformation process where traditional practices within the organisation need to evolve and adapt. For example, in the traditional IT governance model, the financial and purchasing cycle have a certain dynamic, where IT services are purchased over a long period of time with centralised cost accountability; while in an organisation that has its processes Cloud based, consumption management need to be adapted through detailed forecast models to capture its effectiveness with full accountability of whom has used the services.

Thus, the #finops value proposition focuses on cost per business metric, so that decisions always consider business value instead of the traditional cost per month. #finops also allows better Cloud costs’ visibility and, consequently, more informed decisions regarding allocation of resources, saving in needless usage and redirecting it to high return expenditure.??

What are the main steps for appropriate implementation of FinOps ?

1.?????INFORM

Firstly, management information is developed on cost allocation, identifying accountability, to make teams aware of what they are spending and why, providing them with tools to assess the efficiency of future measures. At this stage it is essential to define the governance model and standardize all information supporting decision-making and its corresponding budget management in a systematic way.

2.?????OPTIMIZE

This second phase enables teams to identify and measure value creation, in real time, by capturing cost efficiency, knowing that the cost consists of multiplying Usage and Rates. Thus, architecture design plays a fundamental role in guaranteeing Cloud’s usage optimization.?

Efficiency objectives must also be defined, namely through metrics related to efficient usage patterns, such as frequency of storage access, improving coverage of reserved instances or the creation of appropriate queries.?

Ensuring that unused resources are detected and eliminated, as well as defining practices for Cloud Services usage control, are imperative best practices at this stage.

3.?????OPERATE

During this phase, the processes that make IT, financial and business goals achievable are defined and implemented. Where the Optimization phase defines improvement goals, the Operation phase sets up the processes to carry out actions. Automation should be implemented to allow these processes to run reliably and repeatably.

Finally, it should be noted that for the effectiveness of the implementation of #finops lifecycle, regular collaboration between product managers, finance and engineering is essential, as well as keeping each process small and quick allowing an adequate measurement of the efficiency captured.

How can Ten Twenty One collaborate in implementing FinOps in your company?

At Ten Twenty One we have a multidisciplinary consulting team, with all around specialists, to ensure capturing value when implementing #finops practice.

Our team customizes this implementation with business’ tailored metrics and real time reporting, assisting in the definition of processes and promoting collaboration between the IT, Operations, Business and Finance teams.?

I'm Ana Fernandes , and I'm looking forward to share a more detailed perspective on value creation in your specific business.