A robust FinOps strategy is key to gaining better oversight and accountability of all aspects of cloud
Businesses’ adoption of the cloud has been accelerated by the Covid-19 pandemic. As working remotely has become the new normal, the need for digital transformation has never been greater.
Despite the benefits the cloud can offer IT in terms of flexibility, performance and innovation, it also presents a host of new challenges. One of the biggest is managing related spend and business value, mainly due to a lack of a clear cloud migration strategy, usage and financial oversight.
That’s evidenced by the fact that organisations on average waste more than 30% of their cloud spend, according to the Flexera 2022 State of the Cloud report. Potentially anyone across an organisation can subscribe to new cloud services, often leading to a large, unplanned overspend – a problem which is exacerbated by the use of a multi-cloud strategy.
That visibility allows a FinOps team, including stakeholders from across an organisation, to manage and maximise the value of their future cloud spend.
“FinOps provides a complete overview of all cloud workloads through a single pane of glass, what is actually being utilised or is available, and what is actually being spent and importantly by whom,” says Darryl Sackett, global managing director at SoftwareONE. “This allows decision-makers to identify optimisation opportunities and make real cost savings. These can then be reinvested in driving innovation that supports an organisation’s strategic goals. I like to call this ‘self-funded innovation’.”
By encouraging stakeholders to take ownership of their cloud usage, through applying best practices and working collaboratively to align IT, finance and procurement to business outcomes, FinOps ensures businesses get the most out of their cloud spend. This holistic approach and set of best practices also ensures shareholders get the best possible return on their investment.
So, why do companies need the cloud? How can they develop a robust FinOps strategy? How can they ensure that their culture is ready for the cloud? How can they harness cloud technology’s power and maximise their spend? What are the key barriers to adoption? And how can they be overcome?
In today’s increasingly digitally-enabled world, being in the cloud is a non-negotiable for almost all organisations. It enables them to operate more efficiently, cost-effectively and at scale, thus making them more competitive.
When choosing a cloud platform, it is critical to take into account the application it’s going to be used for, the technology required and associated costs. A further consideration is how it fits within a company’s overall environmental, social and corporate governance strategy, and in terms of achieving its sustainability goals.
To achieve this, firms need to have an effective FinOps strategy that is delivered in three clear phases. The first is ‘inform’, which includes gathering the relevant cloud data, which is then analysed to understand where the money is being spent, by whom and what value it’s generating.
In the ‘optimise’ phase, unnecessary cloud resources are identified and then removed in order to realise cost savings of up to 40%, while maintaining the same high level of speed of delivery and performance in services delivered to end users.
The final FinOps phase is ‘operate’, during which the organisation will measure how it is tracking against defined key performance indicators (KPIs) and business objectives to drive continuous improvements in performance. An organisation needs to develop a cloud centre of excellence with clearly defined governance policies and operating models, while a FinOps team must focus on building a culture across the organisation that drives change.
“The best way to achieve cultural change is through training and education, but also by getting all the various stakeholders in the same room,” says Sackett. “That includes the relevant decision-makers from procurement, finance, IT, engineering, security, operations, development and the executive, and get them talking about what the move to the cloud means to them, why they are doing it, how it will be used and then measuring that against the business’ agreed set of key performance indicators.”
FinOps is not a one-off process, it is a journey. It’s ever-evolving and needs to be developed over time to ensure it continues to deliver improvements and benefits to the business.
By adopting this smart approach to cloud selection, usage and governance through data-driven decision-making, businesses can significantly improve their performance and results. Not only will it help them reduce their costs, but also optimise the value from their cloud investments.
The two biggest barriers to FinOps adoption are a lack of skills and budget. Given the surge in demand for IT professionals with the right expertise and the shortfall caused by the great resignation of 2021, there’s a huge war for talent right now.
Organisations are increasingly turning to partners like SoftwareONE with certified FinOps practitioners, services and platforms to deliver the significant cost savings and business value that FinOps promises.
For more information about how SoftwareONE can help you with your FinOps needs visit softwareone.com/finops
Promoted by SoftwareONE