• Wed. Apr 24th, 2024

Webinar: FinOps – bridging the gap between IT, finance and business

In today’s rapidly evolving business landscape, where every expense is crucial, the convergence of technology, finance and overall business strategy is more important than ever. That’s where FinOps, or financial operations, comes in – a groundbreaking approach that aims to bridge the gap between IT, finance and business, aligning technology operations with financial accountability and fostering collaboration, transparency and efficiency.

With that in mind, TechCentral recently hosted a webinar – sponsored by Obsidian Systems and Amazon Web Services – to talk about FinOps, focusing on cloud economics and effective scaling using AWS. The webinar aimed to answer critical questions about cloud expenditure and management, offering insights into how businesses can optimise their cloud investments for better financial and operational outcomes.

Watch the webinar below…

FinOps, short for financial operations, is an emerging discipline that aligns technology operations with financial accountability. It aims to break down silos between IT, finance and business teams by providing a framework for communication and collaboration. At its core, FinOps is about optimising the costs associated with cloud computing, but its principles extend beyond the realm of technology expenses, influencing overall financial management.

FinOps is anchored in key principles that reshape cloud financial management. Collaboration takes centre stage, breaking down silos between IT, finance and business teams. Visibility and transparency provide a clear understanding of cloud costs, fostering informed decision-making. Accountability permeates the methodology, ensuring shared responsibility for cost management.

The commitment to continuous optimisation is intrinsic, encouraging regular assessment and adjustment of cloud spending based on evolving requirements. Together, these principles create a FinOps mindset that combines financial acumen with technological efficiency for effective, collaborative and continually optimised cloud operations.

Watch the webinar

In addition to these principles, FinOps offers several key benefits for companies navigating the complexities of cloud computing. The methodology ensures predictable budgets by employing dynamic forecasting tools, facilitating improved financial planning. With a focus on informed decision-making, FinOps aligns technology operations with business objectives, fostering agility and innovation. This holistic framework not only establishes financial accountability but also empowers companies to navigate the dynamic landscape of cloud computing with precision and adaptability.

A framework for effective cloud financial management on AWS

Establishing robust processes is essential for implementing FinOps effectively. These processes define how the financial and operational aspects of cloud management intersect. Depending on your organisational need, your framework may look different compared to other businesses. Key components of a framework for effective cloud financial management include the following:

  1. Measurement and accountability: This component of the FinOps framework establishes a structured approach to financial transparency and responsibility. Through the implementation of a well-defined account and tagging strategy, companies ensure clarity in resource identification, facilitating precise cost allocation. Robust reporting and monitoring tools, such as AWS Cost Explorer, provide real-time insights into cost and usage trends, enabling proactive decision-making. The allocation of costs to specific business units or projects enhances accountability, fostering a culture of financial responsibility. Moreover, the measurement aspect introduces efficiency and key performance indicators (KPIs), allowing businesses to quantitatively assess resource utilisation, optimise efficiency and measure the broader business value derived from AWS services. This component forms the foundation for informed decision-making, accountability and continual optimisation within the FinOps framework.
  2. Cost optimisation: This component of the framework is pivotal for achieving efficiency and value. Building and designing for value involves aligning infrastructure decisions to ensure that systems are not only high-performing and secure but also cost-efficient. Identifying and eliminating cloud waste is a continuous process, involving regular audits and the use of tools to identify and decommission underutilised resources. Selecting the best purchase option, whether on-demand, reserved instances, or spot instances, based on usage patterns and organisational needs, is crucial for maximising cost savings. The component also encourages businesses to evolve with new cloud offerings, staying abreast of technological advancements to leverage the latest features and continuously optimise their cloud environment for efficiency and cost-effectiveness. This holistic approach ensures that AWS resources are not only well-architected but also optimised to deliver maximum value.
  3. Planning and forecasting: This component of the framework is geared towards aligning financial planning with the dynamic nature of cloud resources. Through the adoption of dynamic budgeting and forecasting tools, entities can adapt their budgets in real-time to accommodate fluctuations in workloads and business priorities. This component emphasises the development of models for estimating workload costs. Beyond mere cost considerations, entities are encouraged to quantify the broader business value derived from AWS services, taking into account factors such as increased agility, innovation and scalability. Additionally, the integration of cloud financial management into the broader IT financial management framework ensures consistency and alignment with the business’s overarching financial strategy. This comprehensive approach ensures that financial planning not only accommodates the elastic nature of cloud resources but also considers the strategic impact of cloud adoption on the overall business.
  4. Cloud FinOps: This component of the framework establishes the organisational foundation for effective cloud financial management on AWS. Securing executive sponsorship is paramount to champion the importance of the cloud financial management function, ensuring top-level support and commitment to FinOps initiatives. This component places significant emphasis on aligning stakeholder understanding of costs through regular training and communication efforts, fostering a culture of financial literacy and shared responsibility. Implementing cloud guardrails establishes governance policies to enforce compliance, prevent unintended spending and maintain adherence to cost optimisation strategies. The component also encourages the continual evolution of processes through lessons learned, adapting to changing business needs. Furthermore, investments in automation tools streamline tasks, enhance efficiency and support scalability in cloud financial operations, ensuring a robust and adaptable approach to managing AWS cost and usage effectively.

Closing thoughts

While technology undoubtedly plays a significant role in FinOps, it is critical to recognise that the real power of FinOps lies in its human elements: people, processes and culture. Successful cost management in the cloud is reliant on a proficiently trained FinOps team, streamlined processes and a culture that prioritises cost-consciousness. Entities can realise the full benefits of FinOps and achieve sustainable cost optimisation in the cloud by focusing on these elements. The intersection of technology and finance has never been more critical, presenting an opportunity to transcend cost management and foster a culture of continuous improvement and innovation.

TechCentral, Obsidian Systems and AWS thank all of those who attended the webinar discussion.

  • This promoted content was paid for by the party or parties concerned

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