FinOps, or cloud financial management, isn’t just an engineering practice or something that only finance teams need to focus on. FinOps is the processes, the mindset, and the company culture that brings groups — engineering, finance, and business teams — together to make decisions to get the most out of your company’s cloud spend.
The FinOps Foundation has released its annual State of FinOps Report, a community-based survey designed to understand how the FinOps community is growing, maturing their practices, and the challenges they are struggling with. In a recent Apptio-hosted webinar, now available on-demand (“The State of FinOps 2022: Insights in Action”), a panel of practitioners and FinOps experts discussed some of the key findings from the report, providing insights that you can put into action at your organization to advance your practice.
Here are some of the top takeaways:
1. Adoption of the FinOps discipline is swiftly advancing
FinOps has expanded into all industries. Most survey respondents came from financial services and information technology, but the remainder spanned multiple industries: consumer packaging, energy, health care, media, retail and wholesale, telecom, and transportation. Wherever you are in your FinOps journey, the report validates the challenges you face (and offers advice on how to handle them) and previews the challenges you haven’t yet met. Most survey respondents were from large enterprises spread across North America, EMEA, and APAC.
The report shows the cross-functional impact of FinOps. FinOps Lead is the #1 title for people who took the survey, but other respondents are noticeably not just from one team. There are architects, cloud operations personnel, product managers, and DevOps engineers. This diversity powers the success of FinOps. Some companies have a specialized FinOps group with a dedicated team; others have decentralized FinOps organizations where individuals roll on and roll off. The report shows there are many paths to the same FinOps goals; there isn’t a one-size-fits-all approach to FinOps.
2. Your FinOps capabilities can mature at different rates
The “Crawl, Walk, Run” approach to FinOps lends itself to starting small and expanding out. The State of FinOps Report reflects the spectrum of FinOps maturity. 5% of respondents identified as being in the run phase, 20% in the pre-crawl phase, and everyone else was fairly evenly split between the crawl and the walk phases. In short, 95% of State of FinOps respondents hadn’t reached peak maturity yet.
FinOps teams grow as they become responsible for increased amounts of cloud spend. However, growth isn’t linear. Increased spend under management (SUM) may be handled by better automation processes than increased headcount. Also, some organizations are crawling in some areas (e.g., forecast variance analysis) and running in others (e.g., coverage of resource-based commitments).
One of the biggest challenges more mature FinOps practices face is getting engineers to act. During The State of FinOps 2022: Insights in Action webinar, Stacey Han, lead product manager at PayPal, identified accountability with a chargeback process as the key to driving action. “Accountability for cloud spending only comes from ownership,” said Han. “Get measurable metrics that tell a story to engineers, managers, and portfolio leaders.”
3. Adopt FinOps capabilities that address your pain points
PayPal’s FinOps journey started with finance monitoring and owning the cloud budget. As the workloads and spending increased, finance, business, and technology groups worked together — three in a box — to get more value from the cloud. “With public cloud, everyone wants to know the cost, and everyone wants to control spend in real time,” said Han.
4. Cloud cost management is foundational to maximizing cloud program value
Regardless of maturity level, survey respondents wanted basic visibility into cloud spend and optimization opportunities. Presenters on the “State of FinOps 2022: Insights Into Action” webinar highlight the importance of training people who are managing commitment-based discounts. “Resource utilization and rightsizing are PayPal’s priorities,” said Han. “But committed use discounts are key. Before we had cost transparency, we didn’t have a way to show how key they were.”
A FinOps practice grows and matures by maximizing the business value from cloud spend. Wherever you are in your maturity and whatever lessons you have learned from your own journey (or from others), your FinOps practice must continue to focus on delivering business value. Your FinOps processes will change as you mature, but your business focus should not. In the webinar State of FinOps 2022: Insights into Action, respondents shared more details about where FinOps fits in their organization, the most important FinOps capabilities they use, and how they internally promote FinOps. Learn more by watching the on-demand webinar here.