Digitalization is everywhere. Many digital solutions that can benefit the growth of your organization are popping up. You don’t buy these solutions anymore. You use them and pay-per-use. The digital solutions that you build consist often out of multi-SAAS/-PAAS/-Cloud solutions from different companies. This is how you bring the best solutions of these different companies together in the best solution to add the most value for your company.
Sounds like a plan!
Bringing all these best solutions of these different companies together is sometimes easier said than done. Different contracts, a different way of working, different SLA’s, different service windows, different change calendars, different portals, and different (cost)reports etcetera.
So then you have the solution up and running. How do improve quality and lower costs? And in the context of scaling digital initiatives, the challenge is even bigger.
FinOps can help you in this context with managing your costs in a multi-cloud environment to add the most business value.
After reading this article you will know:
- What is FinOps?
- What are the principles of FinOps?
- Which tools can you use for FinOps?
- The need for third party FinOps tools
- Why do your teams need a third-party FinOps solution as well?
What is FinOps?
With FinOps you bring financial accountability to the variable spend model of cloud, enabling distributed teams to make business trade-offs between speed, cost, and quality. The teams are cross-functional with; IT, Finance, Product to shorten the time-to-market and gaining more financial control and predictability. FinOps is a practice, a cultural practice.
FinOps is needed to change the mindset and behavior of cloud cost management to achieve the full benefits of cloud. FinOps is a cultural practice.
The below principles are honed through experience by the FinOps Foundation Members:
- Collaboration by teams – cloud solutions drive innovation and digitalization. Cross-functional teams need to collaborate to get the right costs insights to make the best decisions for the most added value.
- Ownership for your own cloud usage – the easiness of using pay-per-use resources in the cloud makes it very important that teams also take ownership of their usage. Teams need to be facilitated by tooling and coaching to take ownership of their cloud usage.
- FinOps is driven by a centralized team – centrally govern and control the buying process with cloud providers for volume/custom discounts, reserved instances etcetera.
- Accessible and timely reporting – facilitate your teams to have a single pane of glass of their (multi-)cloud usage and related costs.
- Decisions based on added value for your business – help your teams manage their costs based on the business value these costs add for your business. Manage on added value, not only on the costs.
- Variable costs model of cloud can bring advantages – make sure you only use what is needed and scale if needed. Compare pricing between different services and/or cloud providers.
How to implement FinOps?
The implementation of FinOps is not very different than the implementation of other mindset and behavioral improvements. Like with many implementations:
- Start at the beginning of your cloud transformation and make FinOps part of your growth in the maturity of managing your cloud costs. The longer you wait, the harder it will be to change your existing mindset and behavior.
- Use the best practices described by the FinOps foundation or like an organization like Goole describe, see the below GCP FinOps.
- Start small, learn and improve.
To add the most business value to your FinOps teams need to have the best FinOps tools to do their job. There are native cloud cost management tools and third-party tools that integrate multi-cloud data and simplify the cost management reports. See below the native cloud costs management tools.
MS Azure has its own native solution for cost management. With the Azure cost management solution you can; monitor cloud spending, increase organizational accountability, optimize your cloud efficiency and also manage your AWS spend. Azure Cost Management and Billing are available at no additional cost.
With AWS Billing and Cost Management, you can gather information related to your cost and usage, analyze your cost drivers and usage trends, and take action to budget your spending.
Google has a specific, more technical, whitepaper about FinOps on GCP (Google Cloud Platform). You can download it here. The aim of the whitepaper is to provide an actionable set of steps to help your organization implement FinOps and maximize its cloud investment on GCP. The more basic information about cost management on GCP can be found here.
Third-party FinOps tools
The above native FinOps tools are not sufficient for the teams to add the most business value for your cloud usage.
Research shows that major cloud providers such as Amazon Web Services (AWS) and Microsoft Azure offer native tools to manage costs, but with basic functionality. Third-party tools continue to advance their cost management functionality with a multi-cloud approach.
Give your teams not only the native cloud tools but also a multi-cloud “single pane of glass” FinOps solution.
FinOps is about ownership. Without the right solutions, your FinOps teams can’t take that ownership. And yes, there are many FinOps solutions. Some are integrated into a bigger, more expensive, IT/automation solution and some are specifically, cloud-native, designed for multi-cloud cost management.
Distributed cloud systems are complex with all their own way of reporting costs. Choose the right FinOps software so your teams have a quick and accurate overview of their multi-cloud costs.
Research shows that the following factor makes it complex to manage the public cloud costs: Lack of standardization between cloud platforms: Major cloud platforms such as AWS, Google Cloud Platform (GCP), and Microsoft Azure do not provide any standardization of billing models, billing formats, APIs or services.
Please read as well our blog “the top 3 reasons why companies struggle to make their (public) cloud transparent”
The right FinOps solution should have:
- Integration of multi (public) cloud.
- User management with different roles.
- Sharing of reports.
- (Partially) Allocation of costs to the entities that you need.
- Quick overview of your unassigned costs.
- Add margin and discounts if you deliver the cloud services to external parties.
- A Cloud-native architecture itself so the solution breathes cloud.
Want to know how C-Facts Management Control Center can help you with a multi-cloud FinOps solution to get the most business value from your cloud spend?