What’s FinOps?
FinOps is the practice of bringing financial accountability to the variable spend model of cloud, enabling distributed teams to make business trade-offs between speed, cost, and quality. (Cloud FinOps O’Reilly Book)
FinOps designs a set of best practices and tools orientated toward the management of software and infrastructure costs by constant monitoring and optimisation. FinOps defines an organized way to develop technical project while keeping a clear understanding and overview of the cost of each components.
The information presented about FinOps on this page specifically target architecture and projects deployed and running on public cloud providers and on-premise systems.
Why FinOps?
At its core, FinOps is a set of cultural practices oriented toward the most efficient way for teams and companies to manage their cloud costs. In order for FinOps to work, everyone need to take ownership of their cloud usage while being supported by a central best-practices group.
Cross-functional teams work together to enable faster delivery, while at the same time gaining more financial and operational control over their projects.
Therefore, the concept of FinOps is directly in opposition with the historical approach of many companies that create siloed procurement team responsible for monitoring and identifying costs.
With FinOps, each operational team (engineering teams, product owner, security manager) can access the (near) real-time data they need in order to better choose where to spend and help them make sharp decisions that result in efficient cloud costs, balanced against the performance and quality of the services.
FinOps core principles
Even if there is no exact definition of the concept of FinOps, the leaders in the movement such as FinOps.org or FinOps.world defines it through a set of principles necessary in order for it to work:
- Teams need to collaborate: teams work together to continuously improve their efficiency and innovation whilst having a clear understanding of the associated costs
- Decisions are driven by the business value of the Cloud: value-based metrics demonstrate business impact instead of only aggregating spending
- Everyone takes ownership of their cloud usage: feature and product teams are empowered to manage their own usage of tools and services against their budget. The decision making about resource usage and optimization is decentralized at them teams level
- FinOps reports should be both accessible and studied on a timely basis: create, monitor, and improve real-time financial forecasting, monitoring and alerting
- A centralized team drives FinOps: the goal of the central team is to ensure that every feature and product teams has a consistent use of the FinOps tool while taking away topics such as rate negotiations
- Take advantage of the variable cost model of the cloud: optimize cloud cost and usage through continuous small adjustments integrated in the teams production planning
Therefore, FinOps is not just a technology solution or a checklist of best practices to apply, but a shift in the approach of costs and their management.
The Role of Each Team in FinOps
As stated before, FinOps is organized around a central team that share best-practices and recommendations and also ensure that processes are understood and but in application by the other team.
Executives
Executives (e.g., VP/Head of Infrastructure, Head of Cloud Center ofExcellence, CTO, or CIO) focus on driving accountability and building transparency, ensuring teams are being efficient and not exceeding budgets.
They are also drivers of the cultural shift that helps engineers begin considering cost as an efficiency metric.
FinOps practitioners
FinOps practitioners are at the heart of FinOps practice. They understand different perspectives and have cross-functional awareness and expertise.They’re the central team that drives best practices into the organization, provides cloud spend reporting at all the needed levels, and acts as an interface between various areas of the business. They have a good understanding of the technical challenges of the infrastructures.
Engineering and operations
Engineers and ops team members (such as lead engineers, cloud architect, service delivery manager,, etc) focus on building and supporting services for the organization. Cost is introduced as a metric in the same way other performance metrics are tracked and monitored. Teams consider the efficient design and use of resources via activities such as rightsizing (the process of resizing cloud resources to better match the workload requirements), allocating container costs, finding unused storage and compute, and identifying whether spending anomalies are expected.
