Looking Beyond Technology In FinOps - How organisations need to address the People Side
Organisations adopting FinOps often focus on purely the technology element wether it's procuring a tool or implementing automation. In the blog, we dive into the people side of implementing FinOps and why it's critical to FinOps Success
FinOps, or Cloud Financial Management, has grown significantly over the past few years, with more and more organisations prioritising it to reap critical benefits, mainly focusing on saving money. However, they need to include additional benefits of FinOps, including accountability, visibility and a proper understanding of their cloud spend. To meet demand or to focus on quick wins early and fast ROI, organisations have steered towards the technology or tooling side first without adopting the people or process element. Not focusing on culture can cause long-term problems and hinder the long-term success of FinOps.
Before focusing on culture, organisations have instead geared towards training to counteract a lack of FinOps culture. However, the aim is to see the best of both worlds, and there are some excellent examples of combined training, culture and technical effort. At FinOps X this year, we saw a significant focus on training, certification and development of FinOps practitioners and supporting personas. JP Morgan & Co, which won FinOps team of the year and is also considered one of the largest FinOps organisations globally, has over 225 certified practitioners and training programs for the broader organisation, driving culture and adopting technical elements.
This blog focuses on the people side, including establishing a FinOps team, adopting a framework, and driving a FinOps-centric culture. Every organisation will have different team sizes, preferences, spending and organisational buy-in. Whilst this blog showcases what you could do, please implement what works best. For more information, please visit the FinOps Foundation Framework.
An established and knowledgeable FinOps team is the cornerstone of a successful FinOps Implementation across an entire organisation and its IT estate. However, lacking organisational buy-in, budget or resources to cross-train individuals can often limit the team's capabilities. As an organisation, you must decide what works best for you regarding team size, skillset and background. There is no one-size-fits-all solution. An established team comprises individuals with diverse skills and experiences, including technical, finance, or a business focus via methods of external hiring or upskilling and cross-training within the organisation. Here are some reasons why people matter in FinOps:
Skillsets and Experience: FinOps professionals possess the expertise to understand complex cloud pricing models, identify cost optimisation opportunities, and make informed decisions in addition to much more. Their ability to interpret data and trends is invaluable in reducing costs effectively.
Cross-functional Collaboration: Effective FinOps adoption requires collaboration across departments. FinOps professionals bridge the gap between finance, IT, and operations, ensuring everyone speaks the same language regarding cloud costs.
Continuous Learning: The cloud and FinOps landscape is constantly evolving. A dedicated FinOps team stays updated with the latest trends, best practices, and tools, ensuring the organisation's cost management strategies remain relevant and practical.
Establishing robust processes is essential for implementing FinOps effectively. These processes define how the financial and operational aspects of cloud management intersect. As mentioned above, depending on your organisational need, your framework may look different compared to other organisations. Examples of focus areas which require surrounding frameworks include:
- Budgeting and Forecasting: Enabling organisations to set realistic financial goals and track progress. These processes involve regular reviews and adjustments to adapt to changing circumstances.
- Resource Allocation: Efficient allocation of cloud resources, such as virtual machines and storage, requires well-defined processes. FinOps processes help allocate resources based on actual needs, reducing wastage.
- Cost Allocation: FinOps processes enable organisations to accurately allocate cloud costs to specific teams, projects, or departments. This transparency is crucial for accountability and optimising resource utilisation.
Culture is pivotal in how organisations approach FinOps and can often make or break your organisational implementation. A FinOps-friendly culture encourages innovation and cost-consciousness at all levels of the organisation. Here's why a FinOps culture is vital:
- Ownership and Accountability: A culture of FinOps instils a sense of ownership and accountability for cloud costs. When individuals across the organisation feel responsible for their cloud spending, it becomes easier to control costs.
- Innovation: A FinOps culture encourages teams to find creative ways to optimise costs while maintaining performance and functionality. It fosters an environment where cost-saving ideas are welcomed and rewarded.
- Continuous Improvement: Teams should regularly evaluate their processes and look for opportunities to reduce costs without compromising quality
Building a FinOps culture requires many factors to drive its success, including organisational buy-in with a commitment to the following principles:
- Education and Training: Invest in training and educational resources to ensure that all employees understand the importance of FinOps and their role. Regular workshops and webinars can help build a shared knowledge base in addition to FinOps Training
- Transparency: Make cloud costs and financial data transparent throughout the organisation. Use dashboards and reports to provide real-time visibility into spending and progress toward budget goals.
- Incentives: Consider implementing incentive programs that reward teams and individuals for cost-saving ideas and practices. Recognise and celebrate achievements in cost optimisation. There is a working group within the foundation focused on gamification FinOps. Recent examples include donating savings to charities, including the Ukraine cloud wastage challenge
- Leadership Support: Leadership must lead by example. When executives and managers prioritise cost-consciousness and actively participate in FinOps initiatives, it sends a clear message throughout the organisation.
- Feedback Loop: Establish a feedback mechanism that allows employees to share their insights and suggestions for cost optimisation. Act on this feedback to demonstrate that their input is valued.
Despite the importance of people, processes, and culture in FinOps, organisations often face challenges when embracing these aspects fully. While each organisational journey will be different, here are some common hurdles and strategies to overcome them:
- Challenge: Employees may resist changes in processes and culture, especially if they perceive them as disruptive.
- Strategy: Communicate the benefits of FinOps clearly, provide adequate training and support during the transition, and address concerns proactively.
- Challenge: Limited visibility into cloud costs can hinder FinOps efforts.
- Strategy: Implement cost tracking and reporting tools that provide real-time data and make this data easily accessible to relevant teams.
- Challenge: Organisations may prioritise short-term cost savings over long-term optimisation.
- Strategy: Educate teams about the benefits of long-term cost optimisation and incentivise practices that lead to sustainable cost management.
While technology undoubtedly plays a significant role in FinOps, it's essential to remember that the true potential of FinOps lies in its human elements: people, processes, and culture. A well-trained FinOps team, efficient processes, and a culture that values cost-consciousness are the driving forces behind successful cost management in the cloud.
By prioritising these aspects, organisations can unlock the full benefits of FinOps and achieve sustainable cost optimisation in the cloud. Ultimately, it's not just about managing costs; it's about fostering a culture of continuous improvement and innovation.
So what can you do? I recommend checking out the FinOps foundation, its incredible resources and getting involved in the community. If you are at the start of your journey, I would put together a business case and start adoption across your organisation. But please remember that technology is a tool as you embark on your FinOps journey. Still, the people, processes, and culture surrounding it determine your success in managing cloud costs effectively.
List of resources:
- FinOps Certification and Training
- FinOps Framework Overview
- Adopting FinOps – Getting Started
- AWS Blogs on FinOps
- Video: The Contino Podcast: How FinOps Is Helping Enterprises Make Better Financial Decisions
Alternatively, please send a message on Linkedin - Ethan S.