According to Flexera's State of the Cloud Report 2024, 84% of businesses view cloud cost management as their biggest challenge. Despite the flexibility and scalability, uncontrolled spending leads to high costs. It's crucial to recognise and leverage potential savings. But many organisations fail because IT teams are often overloaded and lack the know-how to find the right cloud pricing models. Procurement and finance teams also struggle to accurately assess needs. The solution: FinOps.
The Challenge: Getting a Grip on Cloud Costs Efficient Cloud Cost Management Through FinOps
What Is FinOps and How Does It Work?
FinOps (Financial Operations) is a long-term approach that fosters cost awareness and establishes best practices within your organisation. The aim is to give development teams knowledge of cost drivers and potential savings. FinOps is more than just Cloud Cost Management. It's about a holistic view and interdisciplinary collaboration. While cloud providers like Azure and AWS offer cost tracking tools, FinOps drives sustainable change.
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Teams need to collaborate
Finance, technology, product and business teams work together continuously to optimize cloud usage in terms of costs and performance. There is close coordination with all stakeholders on the topic of spending decisions, with controlling and IT in particular collaborating together.
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Decisions are driven by business value of cloud
In addition to costs, performance and innovation potential are also taken into account in the decision-making process.
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Everyone takes ownership for their cloud usage
Distribution of responsibility for costs and benefits on the technical side. Engineers take responsibility for costs from architecture planning to ongoing operations; feature and product teams can manage their cloud requirements within their budget; decisions on cost-efficient architectures, resource usage and optimization are decentralized.
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FinOps data should be accessible and timely
Transparent and available data for active monitoring and usage optimization as well as a basis for decision-making.
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A centralized team drives FinOps
Dissemination of FinOps practices within the company, development of best practices, support and advice for the specialist departments, management of central commitments
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Take advantage of the variable cost model of the cloud
Continuous adjustment of purchased resources to the resources actually required and cost optimization through commitments.
The FinOps Process: a continuous improvement process
What Can You Achieve With FinOps?
FinOps requires a dedicated organisational unit but leads to substantial savings. According to the FinOps Foundation, 48 of the Fortune 50 companies have already established FinOps practices.
- Up to 30% savings on cloud costs in the first year by identifying mis-dimensioning.
- Automation potential in reporting and monitoring.
- Transparency across all areas and instances.
- Long-term optimisation through benchmarking.
- More precise budget and planning data.
Examples of Savings Potential
- Pre-purchase of Resources: Significant price reductions (e.g., 30% on AWS EC2).
- Analysis of Utilisation: At one client, 1/3 of virtual machines were "oversized" (savings potential >15%).
- Hardware Changes: Cost and performance improvements (e.g., from GP2 to GP3 on AWS).
- Code Optimisation: Avoid inefficient programming.
Would you also like to cut and optimise your cloud costs?
The prerequisite is real-time analysis and close collaboration between the FinOps Centre and IT areas.
Introduction and Implementation of FinOps
Contact us now for a non-binding consultation! Together we'll identify your potential and develop the right steps for implementation.
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