Rising demand of Hybrid Cloud and FinOps Journey
Anil Patil, MBA
Executive Architect | Solution Leader for Hybrid Cloud & Generative AI
Introduction:
?Today, more and more companies and enterprise businesses are preferred hybrid cloud platform approach instead of choosing single public cloud or only public cloud options, as these organizations are realizing Hybrid cloud is the only way they are going to achieve better ROI and benefits through adopting cloud platform.
Fin ops are helping to reduce these gaps while these business and applications are on cloud platform, how it will reduce further operation cost or managing better financial operations in the cloud platform or how it will help to reduce billing of storage, compute, and network operations cost.
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What is FinOps?
?Fin Ops is the practice of bringing together Finance, Technology, and Business to manage the enterprise Cloud Operational expenses for Cloud Cost Management. Fin Ops is also known as the operating model for efficient cloud usage. By understanding Fin Ops enterprise, can look at the opportunity to bring cost savings identified through potential reductions and to make smart informed decisions to improve the value obtained from your cloud deployment by reducing TCO.
Fin Ops leverages the pricing through consolidated reporting and metrics, which are validated by each of the business units within the enterprise. Fin Ops brings financial accountability within the organizations over hyperscale’s spending through a framework of best practices, and culture within the enterprise.
IT leaders are facing unprecedented challenges in last 2–3 years when percentage of business channels are replaced in Digital transformation by 2X.
?FinOps Framework:
Fin Ops is an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance & business teams to collaborate on data-driven spending decision.
Fin Ops has different domain which aligned with 3 phases: Inform, Optimize and Operate
Current Challenges for Enterprise Business on Cloud platform:
1. Resources provisioning :
Enterprise needs to keep a check on the resources that are deployed and used by the developers. If the development teams provision resource which are unused or when you reserve instances could impact directly on the resource wastage that leads to raising up cost.
2. Resource tagging :
As the DevOps teams deploy cloud services, it is advised to follow proper resource tagging practices within the enterprise. If the development teams deploy numerous resources, it would be difficult to identify the cost of each resource.
3. Resource Monitoring:
Monitoring of every resource deployed with in the enterprise mandate would allow the teams to validate underutilization or over utilization of resources.
4. Shared resources:
When the cloud services or resources are used by multiple departments and the development done across the department would build multiples or duplicate resources or common services which would drive the cloud cost.
5. Accountability:
When the department within the enterprise does not has ownership within the teams. Lack of governance to validate cloud services and resources deployed as a part of the software development life cycle.
6. Accurate sizing of the cloud resources:
If the enterprise fails to validate the cloud resources without proper sizing might impact on the Cloud usage cost.
7. Resource Auto-scaling:
Cloud demand-based scaling needs to be validated depending on the business requirements, which drives unnecessary cost for cloud usage.
8. Cloud resource commitment : Reservation of resources and committed for long term usage without the enterprise needs other factor which might lead into cost bust.
?Fin Ops goes hand in hand with DevOps and can be a radical transformation for some organizations. This requires a revised approach to cost and value management impacting the organizations to think beyond the Comfort zone, they tend to adopt over a period to constantly innovate. For this to happen, the development teams, product owners, finance, and commercial need to collectively re-think and re-imagine how they work and collaborate.
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Key Business Value and KPIs by adopting of Fin Ops in your organization.
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It is important to have a clear journey path laid out with the points mentioned so far by defining the current state, establishing the future state, and then coming up with the transition on how you are going to evolve from the current to the future state while having a clear execution plan. To make it a repeatable process for different organizations / business units within your organization, it is important to have well laid out design principles to help you along with consistency of adoption and KPIs on what you would be monitoring.
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?Key design principles you need to think about around adoption of Fin Ops. Organization wide support is paramount across business and IT equally.
Cloud decisions should be driven by business scenarios rather than IT owned initiatives.
·?????? Equal responsibility for the cloud compute and services usage
·?????? Fin Ops reports should be up accessible and timely.
·?????? A centralized ownership for the KPIs put forward.
·?????? Actively manage the ongoing drift in the usage and spend.
?Along with the design principles, it is also important to be aware of the different phases for Fin Ops and capabilities expected across those phases, FinOps has three phases called out as Inform, Optimize and Operate
Provides cost insight allowing for proper allocation of resources, smart decision-making and promotes cross-functional accountability. Define metrics, KPI, tagging strategy, define account and OU structure and Fin Ops roles.
Report, allocate and monitor cost usage. Measure efficiency value KPI using best in class tools. Implement account and tagging strategy.
2. Optimize phase:
Encourages cost efficiencies by empowering teams to make the best and effective use of cloud services and the right balance between performance and billing cost. Analyze and engineer dynamic budgeting and forecasting. Evolve new cloud offering and engineer right size, scale rationalize and decommission.
3. Operate phase:
Continuous improvements of operations and governance to ensure alignment with ever-evolving business goals and scale and run services in a way that lowers the overall cloud TCO and delivers most value. Implement the cloud, automation and Gen AI tools.
Fin Ops can achieve using different automation tools, monitoring resources, assets on hybrid cloud platform.
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Conclusion:
?Fin Ops help to reduce and optimize the cloud platform cost and maximize the productivity. Hybrid cloud solution is the key answer for enterprise business that help to adopt and build enterprise business model instead of using only public cloud enable hybrid cloud approach by infuse of AI and automation across public and private cloud which bring Hybrid cloud platform solution to solve complex customer problems and enable their business as world-class example in today’s digital transformation journey.
About the Author :
Anil Patil has 25 years of IT experience as a distinguished architect and solutions thought leader. He has worked in the banking, financial, insurance and telecom industries. Anil has developed and innovated different solution patterns, AI use cases, and prototypes using different tools and technologies. He has also published several books, blogs and publications. He holds a bachelor’s degree in electronics engineering and a master’s degree in finance and strategy from Rutgers Business School in New Jersey. For more information, email [email protected]
If any questions or more information related to Hybrid cloud solutions, Gen AI tools and implementation please reach out to me Anil Patil, MBA