A clear path to value: Overcome challenges on your FinOps journey 

In
recent
years,
cloud
adoption
services
have
accelerated,
with
companies
increasingly
moving
from
traditional
on-premises
hosting
to
public
cloud
solutions.
However,
the
rise
of
hybrid
and
multi-cloud
patterns
has
led
to
challenges
in
optimizing
value
and
controlling
cloud
expenditure,
resulting
in
a
shift
from
capital
to
operational
expenses.  

According
to
a
Gartner
report,
cloud
operational
expenses
are
expected
to
surpass
traditional
IT
spending,
reflecting
the
ongoing
transformation
in
expenditure
patterns
by
2025.
FinOps
is
an
evolving
cloud
financial
management
discipline
and
cultural
practice
that
aims
to
maximize
business
value
in
hybrid
and
multi-cloud
environments.
But
without
a
thorough
understanding,
adopting
FinOps
can
be
challenging.
To
maximize
benefits
and
realize
the
potential
of
FinOps,
organizations
must
forge
a
clear
path
and
avoid
common
mistakes.  

Enhanced
capabilities
to
drive
growth 

FinOps
is
closely
intertwined
with
DevOps
and
can
represent
a
radical
transformation
for
many
organizations.
It
necessitates
a
revised
approach
to
cost
and
value
management,
challenging
organizations
to
move
beyond
their
comfort
zones
and
embrace
continuous
innovation.
To
achieve
this,
development
teams,
product
owners,
finance,
and
commercial
departments
must
come
together
to
rethink
and
reimagine
how
they
collaborate
and
operate.
This
collective
effort
is
essential
for
fostering
a
culture
of
innovation
and
driving
meaningful
change
throughout
the
organization. 

FinOps
enables
your
organization
to
control
costs
and
enhance
consistency
by
managing
average
compute
costs
per
hour,
reducing
licensing
fees,
decreasing
total
ownership
costs,
and
tracking
idle
instances.
It
also
drives
improved
outcomes
and
performance
through
enhanced
visibility
and
planning,
which
includes
comparing
actual
spending
against
forecasts,
ensuring
that
architecture
aligns
with
business
and
technological
objectives,
and
increasing
automation.  

These
improvements
lead
to
faster
decision-making,
quicker
demand
forecasting,
and
more
efficient
“go”
or
“no-go”
decision
processes
for
business
cases.
Also,
FinOps
helps
align
business
and
IT
goals,
fostering
an
environment
where
enterprise
goals
are
interconnected,
and
business
cases
are
developed
with
clear,
quantifiable
benefits.
This
alignment
ensures
that
both
existing
and
new
capabilities
are
enhanced,
supporting
strategic
growth
and
innovation. 

Challenges
and
common
mistakes
when
adopting
FinOps  

Organizations
should
develop
a
phased
approach
over
time
instead
of
attempting
to
implement
everything
from
day
one.
Having
the
right
people,
processes,
and
technology
in
place
is
essential
for
validating
changes
and
understanding
their
impact
on
the
consumption
model
and
usability. 

It’s
crucial
to
lay
out
a
clear
journey
path
by
defining
the
current
state,
establishing
the
future
state,
and
devising
a
transition
plan
from
the
current
to
the
future
state
with
a
clear
execution
strategy.
To
ensure
repeatability
across
different
organizations
or
business
units
within
your
organization,
it’s
essential
to
establish
well-defined
design
principles
and
maintain
consistency
in
adoption.
Monitoring
key
performance
indicators
(KPIs)
is
essential
to
track
progress
effectively.  

Many
organizations
are
already
considering
FinOps
approaches
today,
although
often
not
in
the
most
cost-effective
manner.
Rather
than
addressing
root
causes,
they
apply
temporary
fixes
that
result
in
ongoing
challenges.
These
temporary
fixes
include: 

• 
  Periodic
  Reviews:
  IT
  teams
  convene
  periodically
  to
  address
  performance
  issues
  stemming
  from
  sizing
  or
  overspending,
  often
  in
  response
  to
  complaints
  from
  finance
  teams.
  However,
  this
  reactive
  approach
  perpetuates
  firefighting
  rather
  than
  proactive
  self-optimization. 
• 
  Architecture
  Patterns:
  Regular
  updates
  to
  architectural
  patterns
  based
  on
  new
  features
  and
  native
  services
  from
  hyperscalers
  may
  inadvertently
  introduce
  complexity
  without
  clear
  metrics
  for
  success. 
• 
  External
  SMEs:
  Bringing
  in
  external
  subject
  matter
  experts
  for
  reviews
  incurs
  significant
  costs
  and
  requires
  effort
  to
  bring
  them
  up
  to
  speed.
  Relying
  on
  this
  approach
  contributes
  to
  ongoing
  expenses
  without
  sustainable
  improvements. 

To
avoid
these
pitfalls,
it’s
crucial
to
establish
well-defined
KPIs,
benchmarking,
and
processes
for
real-time
insights
and
measurable
outcomes. 

While
some
organizations
assign
FinOps
responsibility
to
a
centralized
team
for
monitoring
spending
and
selecting
cloud
services.
This
approach
can
create
silos
and
hinder
visibility
into
planned
changes,
leading
to
dissatisfaction
and
downstream
impacts
on
service
delivery.
Federating
FinOps
activities
across
the
organization
ensures
broader
participation
and
diverse
skills,
promoting
collaboration
and
avoiding
silos. 

The
next
steps
in
your
FinOps
journey 

Regardless
of
where
you
are
in
your
cloud
journey,
it
is
never
too
late
to
adopt
best
practices
to
make
your
cloud
consumption
more
predictable.
IBM
Consulting®,
along
with
Apptio
as
a
product,
can
help
you
adopt
the
right
architectural
patterns
for
your
unique
journey.
 

Tie
your
investments
to
clear
business
value
to
deliver
actionable
insights

Personalize
your
cloud
journey
and
learn
about
best
practices