Controlling the cloud — cost, innovation, value

Busi­ness­es’ adop­tion of the cloud has been accel­er­at­ed by the Covid-19 pan­dem­ic. As work­ing remote­ly has become the new nor­mal, the need for dig­i­tal trans­for­ma­tion has nev­er been greater.

Despite the ben­e­fits the cloud can offer IT in terms of flex­i­bil­i­ty, per­for­mance and inno­va­tion, it also presents a host of new chal­lenges. One of the biggest is man­ag­ing relat­ed spend and busi­ness val­ue, main­ly due to a lack of a clear cloud migra­tion strat­e­gy, usage and finan­cial over­sight.

That’s evi­denced by the fact that organ­i­sa­tions on aver­age waste more than 30% of their cloud spend, accord­ing to the Flex­era 2022 State of the Cloud report. Poten­tial­ly any­one across an organ­i­sa­tion can sub­scribe to new cloud ser­vices, often lead­ing to a large, unplanned over­spend – a prob­lem which is exac­er­bat­ed by the use of a mul­ti-cloud strat­e­gy.
That vis­i­bil­i­ty allows a FinOps team, includ­ing stake­hold­ers from across an organ­i­sa­tion, to man­age and max­imise the val­ue of their future cloud spend.

“FinOps pro­vides a com­plete overview of all cloud work­loads through a sin­gle pane of glass, what is actu­al­ly being utilised or is avail­able, and what is actu­al­ly being spent and impor­tant­ly by whom,” says Dar­ryl Sack­ett, glob­al man­ag­ing direc­tor at Soft­ware­ONE. “This allows deci­sion-mak­ers to iden­ti­fy opti­mi­sa­tion oppor­tu­ni­ties and make real cost sav­ings. These can then be rein­vest­ed in dri­ving inno­va­tion that sup­ports an organisation’s strate­gic goals. I like to call this ‘self-fund­ed inno­va­tion’.”

By encour­ag­ing stake­hold­ers to take own­er­ship of their cloud usage, through apply­ing best prac­tices and work­ing col­lab­o­ra­tive­ly to align IT, finance and pro­cure­ment to busi­ness out­comes, FinOps ensures busi­ness­es get the most out of their cloud spend. This holis­tic approach and set of best prac­tices also ensures share­hold­ers get the best pos­si­ble return on their invest­ment.

So, why do com­pa­nies need the cloud? How can they devel­op a robust FinOps strat­e­gy? How can they ensure that their cul­ture is ready for the cloud? How can they har­ness cloud technology’s pow­er and max­imise their spend? What are the key bar­ri­ers to adop­tion? And how can they be over­come?

In today’s increas­ing­ly dig­i­tal­ly-enabled world, being in the cloud is a non-nego­tiable for almost all organ­i­sa­tions. It enables them to oper­ate more effi­cient­ly, cost-effec­tive­ly and at scale, thus mak­ing them more com­pet­i­tive.

When choos­ing a cloud plat­form, it is crit­i­cal to take into account the appli­ca­tion it’s going to be used for, the tech­nol­o­gy required and asso­ci­at­ed costs. A fur­ther con­sid­er­a­tion is how it fits with­in a company’s over­all envi­ron­men­tal, social and cor­po­rate gov­er­nance strat­e­gy, and in terms of achiev­ing its sus­tain­abil­i­ty goals.

To achieve this, firms need to have an effec­tive FinOps strat­e­gy that is deliv­ered in three clear phas­es. The first is ‘inform’, which includes gath­er­ing the rel­e­vant cloud data, which is then analysed to under­stand where the mon­ey is being spent, by whom and what val­ue it’s gen­er­at­ing.

In the ‘opti­mise’ phase, unnec­es­sary cloud resources are iden­ti­fied and then removed in order to realise cost sav­ings of up to 40%, while main­tain­ing the same high lev­el of speed of deliv­ery and per­for­mance in ser­vices deliv­ered to end users.

The final FinOps phase is ‘oper­ate’, dur­ing which the organ­i­sa­tion will mea­sure how it is track­ing against defined key per­for­mance indi­ca­tors (KPIs) and busi­ness objec­tives to dri­ve con­tin­u­ous improve­ments in per­for­mance. An organ­i­sa­tion needs to devel­op a cloud cen­tre of excel­lence with clear­ly defined gov­er­nance poli­cies and oper­at­ing mod­els, while a FinOps team must focus on build­ing a cul­ture across the organ­i­sa­tion that dri­ves change.

“The best way to achieve cul­tur­al change is through train­ing and edu­ca­tion, but also by get­ting all the var­i­ous stake­hold­ers in the same room,” says Sack­ett. “That includes the rel­e­vant deci­sion-mak­ers from pro­cure­ment, finance, IT, engi­neer­ing, secu­ri­ty, oper­a­tions, devel­op­ment and the exec­u­tive, and get them talk­ing about what the move to the cloud means to them, why they are doing it, how it will be used and then mea­sur­ing that against the busi­ness’ agreed set of key per­for­mance indi­ca­tors.”

FinOps is not a one-off process, it is a jour­ney. It’s ever-evolv­ing and needs to be devel­oped over time to ensure it con­tin­ues to deliv­er improve­ments and ben­e­fits to the busi­ness.

By adopt­ing this smart approach to cloud selec­tion, usage and gov­er­nance through data-dri­ven deci­sion-mak­ing, busi­ness­es can sig­nif­i­cant­ly improve their per­for­mance and results. Not only will it help them reduce their costs, but also opti­mise the val­ue from their cloud invest­ments.

The two biggest bar­ri­ers to FinOps adop­tion are a lack of skills and bud­get. Giv­en the surge in demand for IT pro­fes­sion­als with the right exper­tise and the short­fall caused by the great res­ig­na­tion of 2021, there’s a huge war for tal­ent right now.

Organ­i­sa­tions are increas­ing­ly turn­ing to part­ners like Soft­ware­ONE with cer­ti­fied FinOps prac­ti­tion­ers, ser­vices and plat­forms to deliv­er the sig­nif­i­cant cost sav­ings and busi­ness val­ue that FinOps promis­es.

For more infor­ma­tion about how Soft­ware­ONE can help you with your FinOps needs vis­it softwareone.com/finops

Pro­mot­ed by Soft­ware­ONE