FinOps Framework Overview (2024)

FAQs

What are the main three areas of work performed by the FinOps team? ›

FinOps is performed by working iteratively on the Framework Capabilities through three phases: Inform, Optimize and Operate.

The FinOps journey consists of three iterative phases: Inform, Optimize and Operate.

The FinOps Framework includes capabilities that cover everything from cost analysis and monitoring to optimization and organizational alignment, grouped into a set of related domains. Each capability defines a functional area of activity and a set of tasks to support your FinOps practice.

Similar to DevOps, which dismantled silos and enhanced agility, FinOps has emerged as a cultural transformation uniting Finance, Engineering, and Business professionals along the three FinOps Phases: Information, Optimization, and Operation.

FinOps data should be accessible and timely

Process and share cost data as soon as it becomes available. Real-time visibility autonomously drives better cloud utilization. Fast feedback loops result in more efficient behavior. Consistent visibility into cloud spend is provided to all levels of the organization.

Adopting FinOps: Common Challenges

Complexity of cloud pricing models. Cross-departmental collaboration. Lack of clear ownership and accountability. Data overload and visibility issues.

The RACI matrix categorizes team members based on their involvement in a task or decision as Responsible, Accountable, Consulted, or Informed. To implement this model: Identify all the tasks and decisions involved in FinOps management within your organization.

One of the key concepts in FinOps is the "Iron Triangle" of cost management, which illustrates the trade-offs between quality, cost, and time in cloud services. Quality refers to the performance, reliability, security, and availability of the cloud service. Cost refers to the amount of money spent on the cloud service.

Named after the Italian economist Vilfredo Pareto, this principle suggests that roughly 80% of effects come from 20% of causes. In the realm of financial operations within an FMCG (Fast-Moving Consumer Goods) company, understanding and applying the Pareto Principle can be a game-changer.

FinOps is a public cloud management discipline that enables organizations to get maximum business value from cloud by helping technology, finance, and business teams to collaborate on data-driven spending decisions.”

What are the FinOps tools? ›

FinOps Tools Matrix

There are tools and reports available that can help FinOps practitioners and companies plan their potential cost in advance of consumption, understand invoices, complete billing analysis, govern cost and optimize cost.

The five key building blocks of cloud FinOps

Oftentimes, we see customers start with a set of cost-optimization metrics and eventually shift to unit economics / business value metrics such as cost per transaction or cost per customer serve.

The FinOps Lifecycle is a framework designed for managing cloud costs in a dynamic and scalable manner based on DevOps' core principles. It consists of three phases: Inform, Optimize, and Operate. But while the process is iterative, it's not linear.

Its main objective is to maximize the company's value both in hybrid and multicloud environments. This innovative approach merges finance and DevOps areas, emphasizing the importance of teamwork between IT, finance, and business.

Measuring FinOps team success

A baseline measure of success is the FinOps team's ability to manage and control cloud expenses without adversely affecting the performance of cloud operations.

FinOps requires collaboration to make timely, data-driven decisions to drive cloud value. Understanding decision-making and accountability structures help cross-functional teams work out the processes and decision trees they'll need to tackle challenges and resolve conflicts.

What Are the 3 Main Areas of Corporate Finance? The main areas of corporate finance are capital budgeting (e.g., for investing in company projects), capital financing (deciding how to fund projects/operations), and working capital management (managing assets and liabilities to operate efficiently).

Financial managers interpret financial data, manage investments and mitigate risks by crafting strategies that align with organizational goals and foster long-term growth. They also help maintain compliance with regulatory standards and optimize resource allocation.