How to optimize finances and resources in the cloud with FinOps

by Javier Saupurein (Cloud Analyst – Wezen Infrastructure)

FinOps, a combination of “Finance” and “DevOps”. It is an advanced financial management practice in the cloud that seeks to optimize costs and maximize the value of investments in this technology infrastructure.

Through FinOps, a collaborative approach is established where technology, finance and business teams align their objectives. In this way, they manage to ensure an efficient and responsible use of resources.

In this article, we will explore how FinOps helps organizations make informed and strategic financial decisions. At the same time, it promotes a scalable and flexible environment that responds to market demands.

What is FinOps, and what are its pillars?

FinOps, also known as Finance and DevOps, focuses on strategically managing cloud costs. It is a method that aligns cloud spending with business objectives, promoting responsible use of resources and maximizing return on investment.

This practice is based on three fundamental pillars:

• Visibility and transparency: It consists of constant monitoring and analysis of cloud usage and costs, which allows identifying areas for improvement and opportunities for savings.
• Shared responsibility: Each team assumes responsibility for its consumption and spending in the cloud, creating a more rigorous financial control system.
• Continuous optimization: This principle is based on implementing practices that reduce costs and increase the value of resources. In this way, it ensures constant improvement in cloud management.

What are the financial and operational benefits you can achieve with FinOps?

Implementing FinOps offers multiple financial and operational benefits for companies. Some of the most outstanding benefits are:

• Reduced operational costs: By identifying and eliminating underutilized resources, companies can reduce their costs by 20% – 30% by applying basic practices, and up to 50% with advanced practices.
• Resource allocation efficiency: FinOps allows adjusting the use of cloud resources according to demand, avoiding overspending and optimizing the use of services.
• Optimization of service usage: Thanks to the cloud’s variable cost model, it is possible to take full advantage of savings opportunities.
• Better rate negotiation: With good FinOps management, it is feasible to negotiate more competitive rates or explore alternative providers that better fit the company’s needs.

The importance of implementing FinOps in enterprise architecture

Implementing FinOps in the enterprise architecture is critical for organizations looking to grow sustainably in a digital environment. Some key reasons to adopt FinOps are:

• Increased financial transparency: With FinOps, enterprises get a clear and detailed view of their cloud consumption and spending. This is how it facilitates strategic decision-making.
• Scalability and flexibility: FinOps enables enterprises to scale their cloud resources in a controlled manner, aligning infrastructure expansion with actual demand.
• Spending accountability: Unlike the traditional model, FinOps encourages each team to manage its budget, reducing duplication and optimizing costs.
• Improved operational agility: The cloud offers the ability to scale quickly, and FinOps ensures that this expansion is done in a controlled and efficient manner.

At Wezen, we have developed successful FinOps strategies that show how cost optimization in the cloud can be effective and adaptable to different business needs. Here are some success stories that reflect the specific benefits achieved by our customers:

Case 1: 

For an organization with high resource consumption and predictable workloads, we implemented a reserved instance plan, which allowed them to optimize their budget and achieve a 40% savings by opting for a partial upfront payment scheme. By choosing a no down payment option, they were able to reduce their costs by 36%, highlighting the importance of adjusting purchasing strategies to projected demand.

Case 2: 

For a company with long-term resource needs, we adopted a three-year reserved instance plan, achieving savings of close to 50%. With a one-year commitment, they also achieved a 34% cost reduction, while maintaining the flexibility to adjust spending based on projected usage.

What are the best practices for implementing FinOps?

To get the most out of FinOps, it is essential to follow certain practices that guarantee its effectiveness:

• Create collaborative teams: Its implementation requires the active participation of finance, IT and business leaders.
• Establish KPIs and metrics: Defining savings, expense, and efficiency indicators is key to measure the success of FinOps.
• Automate cost monitoring: Real-time monitoring tools enable effective control of consumption.
• Develop governance policies: Rules for cloud usage, such as spending limits, are essential to avoid unnecessary expenses.
• Adopt continuous optimization practices: Implementing continuous improvement methodologies helps to identify and reduce underutilized resources. In this way, it is possible to adjust instance sizes according to demand and implement specific savings plans.

In other words, in a digital environment where cost control is crucial, FinOps emerges as an essential practice for cloud management. At Wezen, we specialize in implementing customized FinOps solutions designed to optimize resource usage, reduce costs and increase efficiency.

If your company is considering adopting FinOps, our team of experts can help you implement a strategy tailored to your specific needs, ensuring sustainable and profitable growth in the cloud.  Write to us.

Illustrative image: Generated with AI Dall E