How to Implement FinOps Successfully

This is the fifth and final part of this FinOps series, The Operate Phase. If you have missed any of my previous blogs, here is a list of posts in the series:

Note: I am ex-AWS, so you will notice a lot more focus on AWS tools and services as examples here, however we are cloud agnostic and all cloud providers have similar services and tools.

The Operate Phase

Introduction

Episode 4, The Optimize Phase, we discussed the importance of setting goals in order to measure success. In this final blog I will go through the third phase of FinOps: The Operate Phase. We’ll now discuss taking actions to achieve these goals, as well as the continuous evaluation of business objectives and how to improve them over time.

Getting Started

It’s now time to put the processes, workflow, and responsibilities outlined in the previous phases into action. New goals are not defined here, but decisions and plans are made to address the goals that have already been set, depending on the business case and context.

This phase is about a continuous assessment of the organization’s strategy and operations encouraging teams to iterate through the FinOps phases to fine-tune the goals and processes and ensure continued alignment with business needs. Building in automation to reduce manual labor and replace repetitive tasks is another key aspect of this phase as it can create opportunities to improve productivity, reduce labor costs, and boost quality - amongst other benefits.

There must be seamless cross-functional communication between teams for FinOps to gain traction and support at the executive level. This communication needs to be based on reliable, truthful and trusted data, acquired during the Inform Phase, in order to provide the transparency needed to keep all parties aligned with achieving their goals.

What goals were defined for your organization? Here are some examples to refresh your memory:

Innovation - Eg.: Increase launch of new services and features release by X%
Reduce idea to service delivery time
Savings - Eg.: X% reduction in OPEX
Spend the right amount to deliver bigger benefits
What benefits? Increased revenue, faster project delivery, cost efficiency

Processes & Actions

Start by defining who is responsible for the processes, which teams must follow the process and to what goals the process contributes towards. Ensuring who is responsible for what and setting expectations helps build the culture around how different teams can work together.

The teams with the correct capabilities will take action on these processes. For example, FinOps might have highlighted a particular recommendation and shared it with the Engineering team so they can investigate and adjust resources where appropriate, ensuring it does not negatively impact them.

Building out processes to generate cost reports, for example, can enable quick action by those teams. Ensure highlights are delivered on a daily basis and also provide an augmented report with more elaborate weekly or monthly costs, spend data, budget analysis and forecasts.

Define Cloud Governance and Usage Controls

A regular evaluation of governance mechanisms and usage, together with business metrics and unit economics, will help you make smarter decisions about how to move forward with a cloud strategy. FinOps teams must adapt their cloud governance and use policies on a regular basis to ensure that they do not stifle agility and innovation.

Automation

To automate, or not to automate?

Automation is definitely another important aspect of the Operate Phase that you need to take into consideration, as it decreases the effort required to complete manual, repetitive tasks, lowering the chance of human error and improving consistency.

On the other hand, the effort to build the automation can exceed the efforts of manual tasks in the early stages, making it important to be pragmatic when to automate. Can you start operating without it, and revisit in a few months?

Cloud FinOps by JR Storment and Mike Fuller recommends starting slow with automation and provides the following tips to get started:

1- Use it in an inform mode first

Start initial automation in an “inform mode”, focussing on reporting rather than remediation, so as to let you know what the automation would do if it were enabled to make changes.

2- Build confidence in the automation

Learn about the actions an area of automation will take once it is enabled. Build confidence by sharing results with the teams to ensure they are comfortable with the introduction of automation.

3- Do plenty of testing

Once you’ve built confidence with automation, start enforcing actions in a dev/test account first and then test with smaller groups before broadening to a wider user base.

4- Don’t build it all yourself

Rely on commercial or open source tools. Not only will this save time, but it also will make sure you get the latest battle-tested solutions.

5- Measure the performance

Automation should be measured to ensure it’s having the desired effects. As automation is scaled-out across the business, it becomes essential to measure that performance is not degrading.

Conclusion - Pathway to Success

I always like to point out that implementing the three phases of FinOps lifecycle is not a one-off process but an ongoing exercise. The goal is to constantly improve your processes, add more business value and optimize costs over time.

Final thoughts:

💡 Consider the steps you might take in your organization to establish a FinOps function or mindset (cultural change)

💡 Crawl, walk, run - Take your time to learn and understand FinOps and its concept of Crawl, Walk, Run and start small

💡 To be able to achieve your goals, implement processes that define who is responsible for what and when

💡 Automation can play a major role in providing a repeatable and consistent process as well as avoiding human errors. Bear in mind that it does not come without a cost and ensure you understand the goal you are trying to achieve with automation

💡 Regularly returning to the Inform and Optimize phases will give you the opportunity to keep improving

💡 Finally you operate, continuously improving not only to cut costs, but also makes room for innovation and efficiency

Written by: Shana Cunha

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