Preparing for a Successful FinOps Engagement

Preparing for a Successful FinOps engagement

FinOps is an activity that is often discussed, but too frequently put off or dismissed entirely due to the significant undertaking it can require. Like doing laundry or mowing the lawn, it’s something that we must address – even if we aren’t exactly thrilled about it. There is a familiar feeling of dread associated with sitting down to look at endless .csv exports and trying to decide between pivot tables or Power BI. But as markets fluctuate and budgets tighten, money needs to be saved and the cost of resources needs to be justified.

The potential for saving money, time, resources, or any combination of the three is being touted everywhere with respect to leveraging cloud services. Many of us have invested in cloud to some extent — from productivity suites like Microsoft365 to whole datacenter migrations and workloads. In either case, most organizations have committed to a particular cloud path and now struggle to understand how the cloud is being used, who is using it, and to what end(s). In summary, it is far too common for enterprises to have no idea what their workloads are for and why it costs that much — that’s where FinOps can help.

Evaluating the Need for FinOps

A quick perusal of your organization’s cloud account will show cost management tools and reports—a logical place to start while looking for baseline insights. Next, a quick internet search on cloud cost savings comes back with pages (upon pages) of point solutions and services that all claim to save money on cloud spend. Many will show impressive savings out of the gate, but the truly impactful savings that entice enterprises in the first place tend to diminish over time.

There are a seemingly infinite number of articles touting this or that ‘cost-savings magic bullet,’ but the truth is that no such magic bullet exists. There is no shortcut; the appropriate groundwork must be done to attain the true value of FinOps. And while most decision-makers certainly do see the value in these activities, many don’t understand the process itself or the effort required to do it with confidence. Below, we’ll explore some of the early steps businesses can take to set themselves up for a fruitful FinOps engagement.

Step One: Tagging

So, what is everyone doing? How can organizations make sure the juice is worth the squeeze with respect to FinOps? The first step is to review your tagging (or the lack thereof).

Ask yourself:

  • Is there a policy and process for what the tags are and how they are applied?
  • Is there any consistency to their use across departments and business units?
  • How granular do we need to be with our approach to tagging?

Tagging is the foundation to a successful FinOps practice. And like building the foundation for a home, it is a cumbersome and labor-intensive activity. Additionally, it is something that really will never be completed. As new workloads come online or are migrated to cloud resources, that tagging activity needs to happen. Every time.

Step Two: Budgeting

The second step is more practical – budgets.

Budgets need to be set, and every application and workload must be addressed. There should be a consensus on the expected cost per day/month/year as well as what percentage of growth is expected.

Ask yourself:

  • Do we budget on dollars or percentage of growth?
  • What happens when there is an overage?
  • Who should be notified when it goes over?

Budget allocation and the requisite alerting is a critical step that directly impacts the reporting process. These budgets become the groundwork for expected cloud growth and future cloud spend requirements.

Step Three: Reporting

The third step is a little more straightforward – reporting.

Ask yourself:

  • How do we validate our efforts?
  • What is the pertinent information that we should report on?
  • How do we make this useful?
  • Who does this report go to and what information are we sharing with them?
  • Should we have more than one report?

This particular step is purely administrative work, but it is vital to know how the organization is going to handle reporting from both a logistical and resource management standpoint. Teams should have a firm understanding of where reports need to go and how much time will be spent generating them. Lastly, there needs to be an established cadence for recreating these reports (monthly, quarterly, etc.).

Step Four: Rinse & Repeat

Here is the last step, and the part that may be a bit disheartening – repeat steps one through three.

Let’s return to our laundry and lawnmowing analogy for a moment. You might have a closet full of pressed shirts and a perfectly manicured yard, but clothes get dirty, grass grows, and the steps need to be repeated. This is also the case for FinOps. The effort required will wax and wane as time goes by, but it will not go away.

The tasks of reviewing reports, finding cost saving opportunities, executing on changes to realize those savings, and updating processes and policies around cloud governance all need to be done continually.

All of this is not to discourage you from starting your FinOps journey. You need to take that leap, but you don’t have to take it alone. Finding the right partner who will understand your organizational structure, identify the big-ticket savings, and know where to place guardrails on cloud spend goes a long way in ensuring a successful FinOps endeavor.

To learn more about AHEAD’s FinOps for Enterprise IT offerings, reach out to our team today.

Author: Brandon Bischoff

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