IT Expense Study, Blind Spots in FinOps, GreenOps & More

Study: IT Expense Management Drives FinOps Maturity

Source: Third-party ITEM Drives FinOps Maturity (eweek.com)

• FinOps Maturity: The study by Tangoe shows that third-party IT expense management solutions enhance FinOps maturity, leading to cost efficiency.

• Cost Efficiency: Organizations using external ITEM solutions reported significant cost savings, with an average spending of $442,000 compared to $2.35 million for hybrid models.

• Advanced FinOps Programs: 94% of organizations with third-party solutions have a dedicated team for cloud spending optimization, achieving better deployment success.

• Automation Benefits: Automation in IT expense management reduces manual tasks and service outages, with a 22% reduction in regular outages from automated processes.

Unveiling Blind Spots in FinOps

Source: AWS Cloud Enterprise Strategy Blog

• Limited Spend Segmentation: Organizations often lack real-time insight into cloud costs, leading to overspending, especially in development or test environments.

• Underutilized Resources: The “set it and forget it” mentality results in underutilized cloud resources, such as redundant workloads that inflate costs.

• Manual Cost Attribution: Manual chargeback processes are error-prone and obscure true economics, hindering effective cost management.

• Neglecting Discounts and Commitments: Organizations miss out on substantial discounts by not committing to term-based agreements with cloud providers, despite predictable usage patterns.

Mastering FinOps: Cloud Cost Optimization Essentials

Source: FOCUS ON Business

• FinOps Essentials: The article discusses the FinOps framework, which combines finance and DevOps to optimize cloud costs and resource utilization.

• Key Principles: It outlines FinOps principles such as collaboration, business-centric decision-making, and universal accountability.

• Lifecycle Phases: Describes the three phases of FinOps: Inform, Optimize, and Operate, each with specific actions and goals.

• Implementation Steps: Suggest a Crawl-Walk-Run maturity approach for integrating FinOps into an organization, progressing from informal awareness to continuous innovation.

GreenOps, FinOps, And The Sustainable Cloud

Source: Forrester

• GreenOps and Sustainability: GreenOps is a practice aimed at reducing the carbon footprint of cloud environments by optimizing resource usage, which includes factors like data center size, power type, and renewable energy use¹.

• Regulatory Pressures: New EU regulations and global initiatives are pushing for more sustainable cloud usage, with requirements for detailed reporting on energy consumption and CO₂ emissions.

• FinOps Integration: GreenOps aligns closely with FinOps, as both aim for efficient cloud usage, resulting in lower costs and carbon emissions. Key practices include right sizing and scheduling compute off time.

• Actionable Steps: Companies can reduce emissions by using carbon monitoring tools, selecting cloud regions with sustainable energy, minimizing data transfers, and demanding transparency from cloud providers

Special Mention

Earned Value Management: How to calculate in a FinOps context

Source: Anderson Silva on LinkedIn Pulse

• Introduction to EVM in FinOps: The article introduces Earned Value Management (EVM) as a technique from Project Management that can be effectively applied to Cloud FinOps within the ‘Quantify Business Value’ domain.

• Key Assumptions: It assumes the presence of well-defined Unit Economics, an established budget, and a Plan Value (PV) for effective EVM calculation.

• Calculating EVM: Explains the calculation of Earned Value (EV) as the product of Planned Value (PV) and %Complete, using examples to illustrate scenarios of being under and over budget.

• Cost Performance Indicator (CPI): Discusses the CPI, which is derived by dividing EV by Actual Cost (AC), and its significance as an indicator of cloud spend delivering expected business value.