Discover key steps to implement cloud financial management in your business, enhancing efficiency, reducing costs, and optimizing resource allocation.
Every day more and more companies are moving their business-critical platforms to the cloud. The immediate benefits are obvious. There are no more servers to purchase and manage, and no more space needed to rent to house those servers.
What may be overlooked are additional cloud savings that can be captured through cloud cost optimization. That’s where cloud financial management comes in.
Companies in the cloud have traded fixed expenses of data centers, physical servers, and the like for variable expenses. After all, in the cloud, you only pay for the infrastructure that you use.
However, a move to the cloud brings with it new issues to deal with, including variable costs, fluctuating usage, competing departmental priorities, predictability issues, and more.
At Amazon Web Services (AWS), cloud financial management (CFM) is part of the new cloud operating model. It consists of best practices in cost management for technology, people, and processes that lead to efficient business outcomes.
CFM allows finance, product, technology, and business organizations to manage, optimize, and plan costs as they grow their usage and scale. The primary goal is twofold:
Here are nine steps that can lead your company to effective cloud financial management:
How far along companies are in their move to the cloud reflects their cloud maturity. One way to think about it is the various steps a company must take on their journey to the cloud:
Similarly, there are various steps a company must take to achieve cloud financial maturity, including but not limited to:
Just as a move to the cloud doesn’t happen overnight, neither does full cloud financial maturity. Often it takes a learn-while-you-earn approach. Others might describe it as a crawl/walk/run progressive with each stage building on learning from the one previous.
This is where the practice of Financial Operations enters the picture. FinOps is the practice of cloud financial management. It’s the coming together of team members from engineering, finance, product, and executive levels to design cost-efficient cloud operations.
All to reduce budget overruns and unnecessary cloud spending.
As the FinOps Foundation puts it: FinOps allows engineering and business teams to make trade-offs between speed, cost, and quality in cloud architecture and investment decisions.
It’s about getting the most value out of the cloud to drive efficient growth.
Once a FinOps team is in place, it helps to have a set of guidelines under which all participants agree to function. Developed by the FinOps Foundation, these six core principles go a long way in fostering a collaborative and viable cloud optimization culture.
You can’t very well optimize cloud costs if you don’t know what those costs are and why. It pays—and saves—to have visibility and full transparency into cloud spending. For AWS customers, it helps to have a tool specifically designed to help companies optimize their cloud spending.
A tool like Stratusphere™ FinOps from StratusGrid.
The Stratusphere™ FinOps platform displays cloud spending and findings for cost optimization and helps you prioritize where to save based on the level of effort.
AWS already has built-in tools to help you understand and manage your cloud costs, such as Cost Explorer, Trusted Advisor, and Cost Optimizer. Stratusphere™ FinOps helps you understand relative performance and helps you make all decisions based on data.
Cost Explorer lets you dig into granular costs for charges linked to a single-payer account or organization. Stratusphere™ FinOps focuses on informing FinOps teams to understand, plan for, and optimize costs.
Trusted Advisor and Cost Optimizer both give you specific findings and recommendations with varying service support and configuration options, much like Stratusphere™ FinOps’s Findings view. However, our goal is to remove as much of the low-level analysis, reporting, and optimization work as possible. This allows engineers to focus on the high-value work that requires a unique context for the organization and technical capabilities.
Through Stratusphere™ FinOps, our cloud cost management platform, we can offer detailed, insightful, and actionable reports that transform data into strategic assets. Every cost and every saving opportunity is meticulously documented and analyzed, providing you with a clear, comprehensive view of your AWS spending.
Finance 101 dictates that you need budgets to govern spending and provide benchmarks for going under or over those line items.
Early on in your cloud environment, departments may be at spending cross purposes. For instance, engineering may seek more funding for product features or improvements. Finance on the other hand may want to toe the budgetary line. Agreement on visibility and transparency among stakeholders can help avoid any budget squabbles and rectify issues.
With Stratusphere™ FinOps, every instance of cloud spending is noted and categorized. Our tool also informs you where overspending can be controlled, ranking instances in terms of savings versus the level of effort needed to achieve them.
When you require large amounts of space in the cloud your AWS bill can increase fast, but often there is some unnecessary spending that you can optimize.
Using Stratusphere™ FinOps you can view what spending can be decreased with the least amount of effort.
Data only is only valuable if it helps you make better, faster decisions. Stratusphere™ FinOps’s intuitive and dynamic delivers updated insights into your AWS usage, updating daily to reflect your current AWS usage and costs. So, you can make informed, data-driven decisions instantly and ensure optimal cloud cost management and efficiency.
As mentioned earlier, your FinOps team needs to adopt a set of core principles to guide operations and interactions. Part of this involves evangelizing outside the team to everyone from leadership to day-to-day stakeholders. This cultural transformation will go a long way in fostering alignment of goals and achieving cloud cost optimization faster.
Forrester, the global business consultant, states the importance of shared purpose and executive support. Meetings are suggested to communicate roadmap items such as when to expect spikes in spending, agreeing on a governance framework for areas like cost allocation, and championing best practices on spend management.
Practically speaking, for instance, you’ll need standardized language among groups, starting with entirely different terms to describe specific tasks that mean the same thing, such as cost allocation versus cost usage.
It’s not enough to attain cloud cost optimization, you’ve got to maintain it. That’s where continuous improvement comes in. In their report, Forrester advises that your waste-elimination identification should become more precise and forecasts more accurate.
Among other things, that’s exactly what Stratusphere™ FinOps does. Our Level of Effort approach identifies, categorizes, and prioritizes cloud cost savings opportunities out of the box. This helps technical and non-technical teams have a shared understanding of easily attained savings and where to focus.
StratusGrid is a cloud-native engineering and DevOps company that provides AWS Cloud Services, Software Engineering, and Technology consulting. As a certified AWS Consulting Partner, we help maximize cloud usage—and minimize cloud costs—through tailored software solutions involving migration, modernization, stabilization, and cost optimization.
Our Stratusphere™ FinOps tool addresses the visibility challenges faced by large organizations with multiple cloud environments. Companies gain the ability to quickly grasp the intricacies of multiple landscapes and pinpoint areas with the greatest potential savings.
To learn more about StratusGrid, book a free consultation, or enjoy a free 30-day trial of Stratusphere™ FinOps with no strings attached.
BONUS: Find Out if Your Organization is Ready for The Cloud ⤵️
Optimize AWS security with StratusGrid's IAM Group Restricted Read-Only Terraform module, ensuring controlled access and enhanced organizational...
StratusGrid is always striving to elevate our clients to new heights of efficient IT, and Application Modernization immediately resonated with that...
Learn how to use AWS Lambda Secrets Manager efficiently! Get sample code and step-by-step guidance. Keep reading to enhance your AWS security posture!