Understanding the principles

Evolving the FinOps theme and following up on the understandings presented in the previous article CFM (Cloud Financial Management), we felt the need to improve the knowledge about the implementation of a cloud cost management model without this impacting the DevOps dynamism of continuous integration and delivery.

Starting from the maxim of the discipline of Statistics, which literally states that you cannot measure what you do not measure, we can say that, in FinOps, what you do not know the reason for being does not apply, that is, no goal will be achieved if it is not fully understood.

In this way, we understand that the FinOps principles, laid out in the framework developed by FinOps Foundation , need to be understood for the good practice of cost governance in cloud Computing to be achieved.

The FinOps principles are guidelines that must be followed in order for objectives to be achieved, such as in corporate strategic planning.

Let's go to these guidelines:

Principle 01: teams need to collaborate

With collaboration between teams as the maxim to be followed, this principle focuses on promoting information sharing, allowing each persona to clearly know their role and understand the reasons why they need to be integrated with other team members, allowing the FinOps culture to flow naturally between them.

Business area

The business team generates demand, seeking to offer the market solutions capable of being consumed, both for internal and external users, thus being responsible for the entry of new revenues into the company.

This can be a new system as a service, a method of acquisition via e-commerce, a product, a service of sale of income, for example, or any other activity that gere demand ao time of IT, so that this possa implementá-la, attending to the need of anticipated demand.

IT team (Information Technology)

The technical team, and it is expected here that it is already operating with the DevOps culture, will be in charge of providing the cloud computing resources as the business asks, taking responsibility for fully meeting the demand, worrying about the controlled adoption that acquisition and use are adequate to the anticipated needs, no more, no less.

This will guarantee that we will attend to the demands of business and waste, buying and using exactly what we have planned.

Financial Team

They are people who will be in charge of monitoring, in spending, the speed and granularity with which the IT area is concerned with meeting the demand of the business area.

Even before an environment is ready for use, the acquisition request must go through the financial team, which evaluates and measures the availability of financial resources within the provision of the annual budget, facilitating the understanding of how much can be spent, thus avoiding bursting the budget.

Squad FinOps

Responsible for the implementation of the FinOps culture, he must worry in an integrated way to the other teams regarding the continuous improvement processes, which will guarantee the best possible scenario for the acquisition and use of resources, allowing the environment to increasingly gain efficiency through innovation and continuous improvement.

Squad FinOps must perform cost governance to apply due control to the good use of the cloud, facilitating growth always within a healthy financial perspective.

See that, much more important than defining teams, is the need for” collaboration", where everyone involved is concerned with delivering and operating a computing environment suitable for the business, consuming financial resources to exactly the right extent.

Principle 02: everyone owns the use of the cloud

When we apply responsibility sharing, everyone feels ownership of the operation. The successes will be everyone's, as well as the mistakes, promoting a lucid attitude of acquisition and use of resources, always supported in the best possible scenario.

Although this theme is widely applied to business and IT teams, all areas involved, including finance, should feel responsible for the model of acquisition and use of cloud resources, ensuring that each involved knows their responsibility and answers for it.

This happens when squad FinOps delivers real-time spending visibility to all management levels of the company, allowing them to follow the evolution of acquisition and use, linked to the objectives set, ensuring that they follow and control the stipulated goals.

Principle 03: a centralized team drives FinOps

A good practice of a squad FinOps is the deployment, together with the area managers, of the cloud center of Excellence (CCoE).

This is a group of people who will put into practice the guidelines determined by the areas involved, ensuring the centralization of governance and control of existing possibilities in cost management, such as the evaluation of the use of discounts for continuous use, reserved instances or volumes/customized with cloud providers.

This centralization will favor the negotiations involved in the acquisition and use, allowing the on-demand allocation of all computational resources, whether they are dedicated or shared.

Through a cloud center of Excellence, FinOps practices gain strength and become a routine in DevOps teams, which will increasingly worry about consumption, directing developers to deliver environments better suited to New containerization and microservices practices.

Principle 04: reports should be accessible and timely

Every squad FinOps must own a tool * capable of delivering predictive visibility, based on observability, in real time, ensuring that the teams involved can be alerted to behaviors that may compromise the allocated budget.

This happens in easy-to-understand dashboards, where explicit reports in graphs deliver adequate visibility for quick adjustments, whether they are under or overprovisioned, ensuring that continuous improvement is present through an automated process for the acquisition or return of resources, always based on usage statistics.

Meet the LightHouse

Principle 05: decisions are driven by the business value of the cloud

Through the cloud centers of Excellence, the analyses harvested from the reports obtained through tools such as the LightHouse , will allow analysis of trends and variations, facilitating the necessary adjustments.

These analyzes, based on business performance, will be motivating to recognize the success or failure of decision-making, allowing continuous performance improvement through internal and external comparative evaluations. And this will generate value to cloud environments, thus justifying the investments made.

Principle 06: leverage the cloud variable cost model

Finalizing, a última diretriz nos mostra o quão importante é o modelo de custo variável de uma nuvem, onde o seu ambiente pode oscillar conforme as demandas, tanto de mercado como de áreas internas.

The possibility of resizing instances and services in real time and the possibility of improving decision-making based on comparative analysis of cloud offerings and players are unique advantages, never experienced before, that help FinOps squads to leave any environment willing to the state of the art, facilitating the governance of costs that plague the managers of centers of Excellence.

In summary, we can observe that the FinOps principles, which we define as guidelines to be followed, must be understood in their fullness so that the meaning of a cost management practice becomes a corporate culture that actually makes a difference.

These principles will be extremely important for the success of good cloud cost governance, since, from them, the entire FinOps methodology will be applied in its entirety and with knowledge of the cause, that is, the effect of good cost management based on a known cause.

Pier Cloud, a pioneer in FinOps practices in Brazil, can help your company on all fronts, both in the implementation of the culture, based on the principles mentioned here, and in the provision of an automated management tool, capable of delivering the necessary visibility to teams in a cloud center of Excellence.

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#FinOps #CFM #Costmanagementinthecloud #cloudcomputing