Since its emergence, cloud browsing has become an increasingly used resource in everyday life, both by companies and by individuals. This technology has considerably improved information management in companies, increasing its flexibility and scalability. Naturally, it also spawned a lot of changes in the way companies work. One result of this is FinOps.
This methodology is relatively recent, but it already has a great impact on the performance of several businesses, helping to optimize costs and storage. It is not a new technology, but a more effective way to manage cloud computing in a company.
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What are the main challenges when using cloud services?
Before talking about FinOps specifically, it is worth understanding a little about cloud-type services and their main current challenges. After all, it is from them that this new methodology emerged.
The core principle of cloud computing is remote access to data over the internet. Therefore, to be able to use it effectively, it is necessary to have a stable and continuous connection. This requires not only a good internet provider for your company but also good infrastructure and planning for the implementation of this network.
Integration with legacy systems
For cloud computing to be effective, a range of hardware and software capabilities are required, many of which are not compatible with older technologies. Migration to more recent systems that are better adapted to current demands is a complex task, but essential for automating processes and long-term growth.
Along with connectivity, there is concern about information leakage, violation or improper alteration of documents, and system invasion, among other problems of this type. That is why, with the investment in Cloud services, comes the need to invest in data security for the company.
Finally, there is also the issue of cost. Long-term contracts require a lot of planning, as they take into account both current and future use — in addition to the initial investment in infrastructure, which we already mentioned. Doing this work today helps ensure greater scalability in the future.
What is FinOps?
It is in this context that FinOps appears, a term that represents Cloud Financial Operations (Financial Operations in the Cloud). This methodology concerns the financial management of cloud computing, intending to make its cost more optimized and predictable.
With the greater diffusion of cloud technology, many providers have moved to a usage-based service, meaning the company only pays for the resources it uses. However, this variable cost makes financial planning difficult for the operational part of the cloud. Consequently, companies adapt to extract more value from the service in its current format.
The objective of this methodology is to provide a more accurate and rigorous analysis of the costs associated with cloud computing. Naturally, this information is used to evaluate cloud usage in real-time and more accurately calculate its impact on the company’s budget.
Nor is this a phenomenon particular to one company or another. It is a change that occurred organically and was consolidated over time. In any area with a variable cost, the best course of action for the company is to try to reduce variation and waste, providing more consistent gains.
What are the main features offered by FinOps?
FinOps is a methodology, a set of best practices to optimize the operational cost of the cloud. As such, it is primarily based on how the technology is used by the team and general guiding principles. See the main ones below.
Accurate and rigorous cost analysis
The basis of the FinOps methodology is the tracking of resources and costs. The idea here is to use technology to accurately identify the sources of expenses associated with cloud computing and use that information to make decisions.
Due to its dynamic nature, the use of cloud computing services presents a very variable cost, with several factors influencing its final result. To keep up with this pace, the company must have up-to-date information and use it to make real-time decisions.
Resource planning optimization
With better planning and the ability to react to different events, the company is better prepared to reduce costs and plan its finances — this takes into account both current and historical data.
What is the FinOps Journey?
The implementation of the FinOps methodology is based on a cycle. With each interaction, it is possible to obtain more data and improve the final performance of the system. Check out the stages of the FinOps journey below.
The whole process starts with the visualization of the company’s costs. At this time, the following are done:
- The planning of cloud resources that will be used;
- The benchmarking of the success metrics that will be used;
- The elaboration of a budget plan, considering the Return on Investment (ROI) and the forecast of costs, already with some degree of precision.
The second step is to guide the team to implement good practices for using cloud services. This is true for both large-scale procedures and day-to-day tasks. For example, shutting down instances and systems when they are not in use greatly reduces your operational cost, both in terms of energy and network consumption.
The third step is to put these policies into practice and track the results. It is less a closure of the process and more an indication of how it should be continued. Based on the metrics collected and the results obtained, the company must make new precisions, adjust its projections and find new ways to optimize the process as a whole.
Adopting FinOps within your company makes a big difference in the competitiveness and sustainability of your business, especially as more cloud resources are integrated. It may take some time to master the methodology, but you will soon see its positive effects on cloud operational financial management.
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