How FinOps help manage cloud cost optimisation complexity

Worldwide end-user spending on public cloud services is predicted to grow 20.4% to total $678.8 billion in 2024, up from $563.6 billion in 2023, according to the latest forecast from Gartner. However, many organisations lack the visibility, governance, and alignment needed to control and optimise their cloud spending. As a result, they often face issues such as:

• Overspending on cloud resources that are not fully utilised or needed
• Under-spending on cloud resources that are critical for performance and availability
• Missing out on opportunities to leverage cloud features and services that can enhance business value and innovation
• Failing to align cloud spending with business goals and outcomes
• Struggling to balance cloud costs with cloud benefits and risks

These issues can have a negative impact on an organisation’s profitability, competitiveness, and customer satisfaction. That’s why it’s crucial for organisations to adopt a cloud financial management discipline and practice that can help them get the most out of their cloud spending.

Cloud cost management is not enough

Still, many organisations adopt only a cost management approach on their resources. Cloud cost management is not enough to fully leverage the benefits of cloud computing. Cloud cost management focuses on the technical aspects of cloud expenditure, while ignoring the business and operational aspects. Cloud cost management is also reactive, rather than proactive, and often fails to align cloud spending with business goals and value.

Furthermore, the recent Flexera study ‘2023 State of Cloud report’ indicates that enterprises concern around management of their cloud spend reaches the first place, even higher than security concerns.

FinOps is a cloud financial management discipline and cultural practice that enables organisations to get maximum business value from cloud computing. FinOps goes beyond cloud cost management, by encompassing not only the technical elements of cloud expenditure, but also the financial and operational elements. FinOps involves collaboration among engineering, finance, and business teams, who work together to make data-driven spending decisions.

According to the State of FinOps Report, organisations that practice FinOps report significant benefits, such as:

In short, FinOps is more than just cloud cost optimisation. FinOps is a strategic and holistic approach to cloud financial management, that enables organisations to achieve their business goals while optimising their cloud spending. FinOps is not a one-time project, but a continuous journey, that requires cultural change, organisational alignment, and technical excellence. By embracing FinOps, organisations can unlock the full potential of cloud computing and gain a competitive edge in the digital era.

Some of the reasons that organisations hesitate to adopt a FinOps approach are: 

FinOps is based on three core principles

• Collaboration: FinOps fosters collaboration among engineering, finance, and business teams, who work together to make data-driven spending decisions and create financial accountability. 
• Iteration: FinOps adopts an iterative cycle of inform, optimise, and operate, which ensures continuous improvement and alignment of cloud spending with business outcomes. 
• Automation: FinOps leverages automation and tooling to streamline and standardise cloud financial management processes and workflows. 

By using our more than 100 experts’ capabilities, industry best practices, and experience from more than 200 cloud projects, we developed the Zühlke FinOps management framework to help you navigate the complexity of your financial cloud journey. 

Our approach is based on team collaboration, continuous feedback, and is tailored to your individual needs, budget, risk appetite and expectations.

If you are interested in learning more about FinOps, or want to start your FinOps journey with Zühlke, please contact us today. We would love to hear from you and help you achieve your cloud financial management goals, tackle your technical debt, and reduce your time to value.