Best Practices for Implementing FinOps to Improve Your Bottom Line  

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Implementing FinOps (Financial Operations) can be a great way to streamline your business’s financial processes, improve visibility into the overall financial picture, and maximize profits. However, optimizing your FinOps process can sometimes be an unmet end. Here is a simple and succinct look into the best practices for implementing FinOps to help you get the most out of your financial operations and get your bottom line where you want it to be. Furthermore, you will learn about the principles guiding such practices and how to measure your success in implementing them.  

What Is FinOps? 

FinOps is a relatively new term in the business environment that represents the solution to an invariably emerging need. Finance teams struggle to comprehend cloud cost structures due to the technical environment of the cloud while technical teams like engineers and product experts have a difficult time understanding how their activities impact cloud costs due to little knowledge of finance. Thus, the coined word “FinOps” stands to indicate the fusion of two crucial functional units: “finance” and “operations.”  

In context, FinOps is an emerging cloud finance management discipline designed to enable businesses to maximize value by bringing the technology, business, and finance teams together to collaborate in making data-driven decisions.  

The benefits of FinOps are vast spanning efficient financial accountability and visibility to accelerated business value realization, cloud resource usage and cost efficiency, and easy cross-organizational collaboration. But FinOps can be complex when executed wrongly and thus less rewarding than it is demanding. However, maximizing its benefits is possible and in practice requires adapting the key principles of FinOps to its implementation. Find these key principles, the ideal steps to successfully implementing FinOps, and how to measure the success of its implementation in an organization below.  

The Key Principles of FinOps 

1. Centralize Visibility 

The visibility of cost, usage, and performance of a company’s cloud resources needs to be centralized and easily accessible for FinOps practitioners. This will allow them to identify areas of cost and performance optimization. 

2. Automation 

Automation is essential for quickly responding to changes in a company’s cloud resources and taking the most appropriate action based on the data collected. Automation tools and technologies should be used to identify and implement opportunities to improve cost efficiency, performance, and scalability. 

3. Alignment 

FinOps requires all stakeholders to work together in harmony to achieve maximum results. By aligning their interests and objectives, FinOps practitioners can build an efficient environment where everyone is working toward a common goal. 

4. Optimization 

Cost and performance optimization are two of the primary goals of FinOps. It’s important to optimize every aspect of a company’s cloud infrastructure, including hardware, software, applications, networks, and storage systems. 

5. Continuous Improvement  

FinOps is a continuous process of improvement, not a one-time solution. To stay ahead of the curve, it’s important to track metrics and review the results of each optimization measure to ensure that it’s still effective over time. 

6. Open Source  

Open source technology should be embraced as it can provide cost savings and improved performance benefits. Open source technologies can also enable companies to customize solutions to better meet their needs.  

7. Collaboration 

FinOps practitioners must collaborate with other departments and vendors to ensure that all stakeholders can access the data and insights necessary for cost optimization and performance optimization. 

The 7 Steps to Successful FinOps Implementation 

1. Create a FinOps Team  

The success of FinOps relies on having a team of people who understand the principles of FinOps, have the skills and knowledge to implement the processes, and can work together to ensure the best possible outcomes for your business. 

2. Set Goals  

Defining the goals of your FinOps implementation is essential for understanding the potential impact and measuring progress. Goals should include financial objectives such as cost savings and efficiency gains as well as non-financial objectives such as customer satisfaction. 

3. Design an Implementation Plan  

A successful implementation plan should map out how each step of the FinOps process will be implemented in your organization, including steps like mapping out costs, allocating resources, developing dashboards, and setting up reporting systems. 

4. Develop a Strategy  

A successful FinOps strategy should consider factors such as organizational structure, technology, processes, and policies. It should also consider the expected outcomes of each step of the FinOps process and how those outcomes fit into the larger picture. 

5. Analyze Data  

Data analysis is essential for understanding how the FinOps processes are impacting your organization. This includes tracking cost savings, efficiency gains, and customer satisfaction. 

6. Monitor performance 

Data analysis is essential for understanding how the FinOps processes are impacting your organization. This includes tracking cost savings, efficiency gains, and customer satisfaction. 

Regularly monitoring performance is key to understanding whether or not your FinOps implementation is achieving its desired results. 

7. Adjust Strategies  

Finally, adjustments need to be made over time to ensure that the FinOps process continues to deliver desired outcomes. This includes analyzing data and making changes to the FinOps process when needed. 

Measuring the Success of Your FinOps Implementation 

Several key metrics can be used to gauge the success of your FinOps implementation. These include evaluating: 

  • cost savings achieved  
  • the number of projects completed on time and on budget  
  • efficiency and utilization rate of resources  
  • scalability 
  • the performance of your cloud services  
  • the success rate of operational process automation  
  • the effectiveness of various financial forecasting tools  
  • customer feedback  
  • FinOps implementation-related customer experiences 

All these metrics should be tracked and monitored regularly to determine how well your FinOps initiatives are performing. Collecting data relevant to the outlined metrics above can provide valuable insights into the effectiveness of your FinOps strategies and help you identify areas for improvement. 

Conclusion  

FinOps is key to driving the optimization of data-driven decision-making. However, the success of your FinOps implementation depends on the accuracy of your data, the ability to analyze and optimize your costs, and the effectiveness of the strategies you have implemented. Measuring the success of your FinOps implementation is as well essential to maximize cost savings and improve efficiency. Regularly monitoring these metrics will help you stay on top of your financial performance and ensure that you are meeting your goals and maximizing savings.

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