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FinOps: a model for cost savings and collaboration
The growing interest in Artificial Intelligence and application modernization is increasing spending on cloud services and introducing the FinOps model. For this 2024, the consulting firm Gartner, forecasts a 20.4% growth in public cloud services reaching 675.4 million dollars; compared to 561 million dollars in 2023.
However, one of the main challenges facing companies that have adopted the cloud services model today is unpredictable costs. In short, the lack of visibility into how resources are being used and how it is affecting the control of organizations' budgets.
Under this scenario, the FinOps model emerges as a discipline to support companies in controlling and optimizing costs in the cloud .
"The FinOps model provides processes, tools and practices to effectively manage cloud expenses, through a working model based on collaboration, transparency, continuous optimization and accurate cost allocation. In short, the FinOps model seeks to maximize business value in cloud environments" Marcelo Escudero, Cloud Consultant Anida Latam.
FinOps working model
The FinOps working model, according to Anida Latam, is based on the following principles:
- Collaborative Culture: drives collaboration between finance, operations and development teams to effectively understand and optimize cloud costs.
- Visibility and Transparency: provides tools and processes for complete visibility into the use of cloud resources and how they translate into costs.
- Continuous Optimization: promotes a constant optimization mentality, where teams look for ways to reduce costs without compromising performance.
- Accurate Cost Allocation: promotes a mindset of constant optimization, where teams look for ways to reduce costs without compromising performance
This model is presented as a solution that provides a macro vision of cloud solutions, minimizing surpluses and improving profitability. In addition, it provides a collaboration scheme that integrates all the teams involved in the management of cloud services, both in technical and commercial aspects, making it possible to get the best performance and offering the customer a higher quality service.
"The adoption of the FinOps model demands a cultural change within any company and involves communication and collaboration between teams . In this sense, the adoption of this model requires a series of stages ranging from awareness and planning, to implementation and continuous optimization" Marcelo Escudero, Anida Latam Cloud Consultant.
Adoption of the FinOps Model
The FinOps adoption model has now become a discipline that combines collaboration between finance, technology and operations teams. Therefore, the adoption of this model requires a set of steps and methodologies to support companies in using resources in the most efficient and cost-effective way possible.
At Anida Latam we designed a model based on our experience and in conjunction with the collaboration of our brands, which are developed in the following stages:
Stage I:
Awareness and Understanding.
Company leaders and relevant teams, including finance, operations and development, are familiarized with the basic concepts of FinOps and how they can be applied to their specific environment.
Stage II:
Evaluation and Planning.
In this stage, the company assesses its current situation in terms of cloud costs, identifies areas for improvement and establishes clear objectives for FinOps adoption. Then, a FinOps team is formed to lead the implementation of FinOps practices throughout the organization. Finally, a detailed analysis of cloud infrastructure and spending patterns is conducted to understand where resources are being used and how that translates into costs.
Stage III:
Tool Selection and Training.
At this stage, the company selects the right tools and platforms to assist in cloud cost management.
Stage IV:
Implementation and Execution.
Processes and policies are established to monitor and control cloud costs, including the configuration of alerts and budget limits. Additionally, actions are taken to optimize the use of cloud resources, such as: shutting down unused instances, selecting more cost-effective instance types, and optimizing service configuration.
Stage V:
Review and Continuous Improvement.
At this stage, the company regularly reviews its performance in terms of cloud costs and looks for opportunities for improvement. In parallel, post-implementation analyses are performed to assess the impact of actions taken and adjust strategies as necessary.
A culture of continuous optimization is fostered, where cloud cost management is considered an integral part of business operations.
At Anida Latam we are committed to offer, create and devise implementation and resource optimization strategies with the cloud model. We have the technology, tools, implementation services and managed services through our Network Operation Center (NOC). Learn more here
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