For far too long, companies have been investing money in cloud computing. The worry of being left behind with their legacy applications catalyzed the transition from on-prem IT infrastructure to the cloud. However, the economic downturn and reckless cloud wastage have forced organizations to reevaluate their cloud costs. The State of FinOps 2023 survey has stated that managing cloud spending is a significant challenge for 82% of businesses. Although the cloud usage of companies is likely to continue, organizations are being smart about how they spend through FinOps. Looking at the costs that cloud computing claims, businesses are fast realizing the importance of implementing robust FinOps frameworks in optimizing financial IT operations.
In this article, we will discuss different strategies that companies can follow to maximize FinOps. But first, we will quickly understand what FinOps entails.
What is FinOps?
FinOps is a framework to transform the financial aspects of IT operations through an operational and cultural shift. It forms a platform for technology, finance, and business teams to establish and assess financial accountability. The primary goal of FinOps is to maximize the business value of cloud usage by optimizing spending.
Traditionally, cloud computing costs were mismanaged due to a need for more streamlined communication between business and IT teams, drawing uncertainty on who is accountable for cloud spending. Additionally, estimating the impact of these costs took months. With FinOps, you could unravel the complexity of IT financial management.
7 Practice Strategies to Implement FinOps Framework
Establishing the FinOps framework as a culture within the organization will be challenging if you build from scratch – like most companies. To help you with the process, we have compiled a list of 7 practical strategies that make the process seamless.
1. Optimize resource provisioning
Most organizations need help with right-sizing cloud resources, which causes either under-provisioning or over-provisioning. While under-provisioning causes performance issues, over-provisioning will overrun your cloud computing budget. Instead, every workload must be assigned the required resources for an uninterrupted process.
Right-sizing resources allow companies to achieve both goals – enhancing application performance through well-provisioned resources and controlling cloud costs. FinOps teams must closely monitor and track resource usage to avoid wastage by freeing up space that is not in use.
2. Get resources at discounted pricing
Cloud service providers empower organizations through multiple mechanisms to reduce their cloud cost wastage. Two of these are Reserved instances (RIs) and Savings Plans. Companies must subscribe to a resource amount for the long term in these schemes. The providers offer discounted rates since you purchase cloud space in bulk and for a longer duration. However, for this to make sense, you must have a clear idea of your usage patterns to save costs.
3. Go hybrid when selecting the storage tier
When companies purchase cloud storage, they can select the resources from different tiers. Each of these slabs offers specific unique features and is priced differently. Organizations can evaluate the tiers based on usability and performance expectations to get the best deal. For example, expensive resources usually offer high performance, so companies can use them to manage frequently accessed data. They can choose cheaper tiers if they can trade off performance for cost savings.Â
4. Tag resources for better usage visibility
Companies can rely on resource tagging and grouping to optimize cloud costs to manage cloud usage effectively. In this approach, you link resources with different tags or labels, which helps you better analyze the breakup of your cloud environment. It ultimately makes the identification of cost-saving opportunities easy.
5. Monitor and track usage to control costs
In this strategy, companies must monitor resource usage at a granular level using features like tagging to analyze better how different departments use the available resources. You can track and analyze usage patterns to detect areas where cloud storage is overused or underused. These insights can be used to optimize resource allocation and reduce cloud costs. Companies can also track usage to ensure their application has enough storage space to accommodate peak hour spikes.
6. Leverage spot instances for easy savingsÂ
One of the cheapest ways to get cloud resources is through spot instances (AWS) or preemptible VMs (GCP). These are storage packets that the cloud service provider can terminate at any time. Due to their unreliability, platforms offer them at significantly discounted prices. Although it might seem risky to use unreliable resources to store data, they can be of great value if used strategically. For example, you can use spot instances or preemptible VMs to store non-time-sensitive and fault-tolerant applications. However, they mustn’t be used for workloads that require uninterrupted resources.
7. Automating Cost Management
Managing cloud costs manually can be tedious and resource-intensive. Setting up a huge team with additional investment to save costs is counterproductive. Automating cost management can be a potent strategy to optimize cloud usage. An automation solution can help you monitor, track, and optimize cloud spending without operational overhead. It enables you to avoid unnecessary charges and resource wastage.
FinOps facilitates efficiency & cost-savings
Implementing the FinOps framework helps create a culture of accountability and transparency through enhanced collaboration between business, engineering, and IT teams. While transitioning to cloud platforms is inevitable, it doesn’t have to be expensive. You can keep your modernization goals within budget through FinOps.Â
This blog post discussed various strategies to save cloud computing costs through optimized resource management. Managing cloud costs can be resource-heavy and tedious, with constant monitoring and adjustment while ensuring they align with your business aspirations. You can streamline the process through automation.
