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FinOps - an integral part of successful cloud strategy

FinOps – an integral part of successful cloud strategy

One of the USP of cloud platforms is cost efficiency but do all the businesses which migrate to cloud really find cloud solutions economically viable in the long run? To your surprise answer is “No” for many of them. Detailed analysis of such cases points the finger towards lack of planning for cloud optimization by enterprises before or in early stage of their cloud journey. Successful Cloud journey is not simply shifting IT expenditure from a CAPEX (capital expenditure) to OPEX (elastic operating expenses) model, but it needs a cultural shift as well.  The major factors which prohibit an organization from enjoying the full benefits of its cloud platform are-

  • Lift and shift approach during cloud migration.
  • Missing cloud optimization capabilities
  • Limited visibility and accountability
  • Isolated review of multi-hybrid cloud costs
  • Inadequate cloud native service consumption

That gives birth to – “FinOps”.


FinOps –  as the name suggests is the financial management of operations in the cloud. This model practices an evolving culture which lays emphasis on best practices, processes, tools and productive collaboration between engineering, finance, technology and business teams so that effective data driven spending decisions can be taken.

FinOps promotes responsible spending and financial accountability in the cloud which empowers stakeholders and business teams to take informed decisions.  The engineers can build and iterate faster while the management gets better picture of where to invest and reel in unnecessary spending. In short FinOps closes the cloud value gap for an organization by making it proactive rather than reactive in its approach. It establishes a self-governing and cost-conscious culture with in a organization which promotes accountability and agility in business to better optimize costs while maintain the velocity and innovation benefits of cloud.

An effective FinOps team should comprise of people with financial orientation, technical expertise, business analytical and governance skills.

FinOps Model Lifecycle is a continuous process comprising of three iterative stages:

Inform – Visibly informed decisions for cloud spending and benchmarking by using necessary metrics and KPI’s for measuring performance to drive ROI while staying with in budgeting spend are key factors in it.

Optimize – This stage involves taking actions to identify and measure efficiency efforts such as unused or underutilized or overprovisioned resources for right sizing, storage access frequency and eliminating resource wastage. Improvement in reserved instances for discounts, utilization, rate optimization and automation are major factors in it.

Operate – This stage deals with adaption of governance and usage controls for cloud resources. It compares business objectives against the metrics and KPIs for accessing effectiveness and continuous improvement to achieve enterprise goals.