What are FinOps solutions?

Cloud spending can quickly get out of hand if you’re not careful. FinOps solutions are a great way of controlling it. 

This primer will dive deep into FinOps solutions. We’ll explain their importance and why most companies benefit from them. 

We’ll cover:

• A definition of FinOps solutions
• Reasons why you should use FinOps solutions
• The key components that make up FinOps tools
• A no-frills step-by-step guide to implementation
• Tips and best practices you should follow

Let’s kick things off with a definition.

What are FinOps solutions?

FinOps solutions are tools and practices designed to monitor and control cloud spending. They let businesses take the reins of their financial management in the cloud. The goal is to provide accountability and drive operational efficiency.

FinOps solutions provide the guidance needed to navigate cloud costs. They help you understand where your money is going and where it should be going. 

The ultimate goal is to align your financial goals with your cloud operations, maximizing value and minimizing waste. It's about making your cloud investments work smarter, not harder.

FinOps solutions are more than just number-crunching. They foster a culture of collaboration between finance, technology, and business teams. They break down silos and create a shared understanding of cloud costs. This means better decision-making, informed resource allocation, and a healthier bottom line.

Why use FinOps solutions?

FinOps solutions are about cutting costs, but they’re also about helping businesses make the most of their cloud investments. Here's how they can genuinely benefit your business:

• Better cost optimization: FinOps tools help you find areas of waste and right-size your infrastructure, leading to significant cost savings. Think of it as doing some garden trimming, leading to sleeker cloud operations.
• Clearer financial accountability: FinOps solutions provide crystal-clear visibility into cloud spending company-wide. Everyone knows who's responsible for what, fostering a culture of shared accountability. 
• Improved operational efficiency: FinOps solutions simplify cloud-related processes, removing bottlenecks. They automate tedious tasks like cost allocation and reporting, freeing up your team to focus on strategic initiatives.
• Accurate cloud budgeting and forecasting: Budgeting for the cloud can feel like a guessing game. However, FinOps tools change the game by providing accurate forecasting and budgeting features. They help you anticipate future cloud costs and plan accordingly, ensuring you're always one step ahead. 

Key components of FinOps solutions

FinOps solutions are multi-faceted tools that let businesses take control of their cloud spending. Let's dive into the key components that make these solutions so effective:

Cloud cost management

At the heart of any FinOps solution lies cloud cost management. This acts as your financial compass, guiding you through the often-tumultuous waters of cloud expenses. It allows you to track and analyze your cloud resource usage in real-time, providing valuable insights into where your money is going.

With cost allocation, you can easily distribute cloud costs across different departments or teams. You can ensure that everyone is held accountable for their share of the bill. This transparency fosters a culture of responsible cloud usage and helps you identify areas where costs can be lowered.

Financial planning and analysis

FinOps solutions go beyond simply tracking expenses. They also provide financial planning and analysis tools, helping you predict and prepare for future cloud costs. 

By creating and managing budgets for your cloud spending, you can set clearer financial goals.

Forecasting capabilities take this a step further. They let you use historical data and usage patterns to predict future cloud costs. This allows you to make informed decisions about resource allocation and budget adjustments.

Optimization and automation

FinOps solutions are about saving money and improving efficiency. Resource optimization helps you identify underutilized resources and find ways to make the most of your cloud investments. This could be anything from right-sizing instances to eliminating unused services.

But who has time to optimize every resource manually? 

That's where automation tools come in. By automating resource management tasks, you can reduce the risk of human error and free up your team to focus on more strategic initiatives.

Reporting and analytics

Knowledge is power, especially when it comes to cloud spending. FinOps solutions provide a wealth of reporting and analytics features to help you understand your cloud costs in detail. 

Real-time dashboards give you an instant snapshot of your cloud spend and usage. Detailed reports offer a deeper dive into cost allocation, savings, and usage trends.

Think of it as your financial dashboard. It provides all the information you need to make informed decisions about your cloud investments. With this level of visibility, you can easily identify areas for improvement and track your progress over time.

Governance and compliance

In the fast-paced world of cloud computing, it's easy to lose sight of financial regulations and standards. FinOps solutions provide a safety net. They help guarantee that your cloud usage remains compliant with policies and regulations.

Clear policies for cloud spending help you create a framework for responsible cloud management. With built-in compliance features, you can rest assured that your company is adhering to industry standards.

A quick step-by-step guide to implementing FinOps solutions

Embarking on your FinOps journey doesn't have to be overwhelming. Here are some easy-to-follow steps for your implementation journey: 

1. Assess your current cloud financial management practices

Before you embark on any journey, knowing where you're starting from is crucial. Take a good look at your existing tools and processes for managing cloud costs. Are they up to the task? Do they provide the visibility and control you need?

Identify the gaps in your current approach. Are there areas where you lack information or processes that could be improved? This assessment will lay the groundwork for the next steps. It’ll help you choose the right tools and processes to fill those gaps.

2. Choose the right FinOps tools

Think of FinOps tools as your trusty vehicle on this journey. But just like choosing a car, you need to pick the right one for your needs. Consider your organization's size, cloud environment, and specific goals.

Select tools that align with your unique requirements, ensuring they can scale as your cloud usage grows. Plus, don't forget about integration. Make sure your new tools can easily integrate with your existing cloud infrastructure.

3. Establish a FinOps team (If you don’t have one already)

Every successful road trip needs a reliable crew. Assemble a cross-functional team with members from finance, IT, and operations. This diverse group will bring a wealth of knowledge and perspectives to the table.

Clearly define roles and responsibilities within the team. This will guarantee that everyone knows their part in this journey towards FinOps success.

4. Develop FinOps processes

A roadmap is essential for any road trip; the same goes for FinOps. Develop transparent processes for cost allocation and chargebacks. You want to make sure that cloud costs are distributed fairly and transparently.

Establish regular monitoring and reporting practices. This will keep everyone in the loop about cloud spending and usage trends, allowing for proactive decision-making and course correction. In our road trip analogy, think of it as checking your fuel gauge along the way.

5. Implement policies and governance

Just like guardrails keep you safe on the road, policies and governance keep your cloud spending in check. Develop and enforce policies for cloud spending and resource usage. Make sure that everyone is on the same page and following best practices.

Regularly review compliance with established policies and standards. This will help you identify potential risks or issues early on, allowing you to address them before they become major problems.

Best practices for FinOps solutions

Implementing FinOps solutions is an ongoing journey. It’s about learning, adapting, and refining your approach. To make the most of your FinOps investments, consider these best practices:

• Keep a watchful eye: Regularly monitor your cloud usage and costs to identify opportunities for savings. This allows you to quickly catch any anomalies or unexpected spikes and take corrective action.
• Embrace automation: Leverage automation tools to let technology do the heavy lifting. These tools help simplify processes and reduce manual intervention, which not only saves time but also minimizes the risk of human error.
• Foster a collaborative spirit: Encourage collaboration between finance, IT, and operations teams. These teams can gain a holistic understanding of cloud costs by working together. The result is more informed decisions that benefit the entire organization.
• Invest in education and training: Provide ongoing training for your teams on FinOps practices and tools. This means everyone has the skills needed to contribute to your FinOps success. Remember, a well-informed team is a powerful team.

Next steps

A key aspect of successful FinOps implementation is having a robust billing system. When your billing processes are streamlined and transparent, you can cut costs and lower financial strain. An inaccurate billing system can lead to unexpected expenses and billing disputes. 

That's where Orb steps in as your strategic billing tool.

Orb is a done-for-you billing platform. It’s designed to empower your FinOps initiatives. We aim to provide the tools and insights you need to optimize your cloud investments.

Here's how Orb can improve your FinOps practices:

• Seamless integration: Orb effortlessly integrates with your existing systems, including your cloud infrastructure, CRM, and payment gateways. Orb lets you track usage and billing data in real-time.
• Flexible pricing models: Orb supports a wide array of pricing models, from flat-rate subscriptions to usage-based and tiered pricing. We’ll empower you to align your billing with your customers' consumption patterns.
• Automated invoicing and payments: Orb automates the billing process from invoice generation and delivery to payment collection and reconciliation. This reduces manual effort, minimizes errors, and improves cash flow.
• Transparent usage tracking: Orb provides detailed insights into customer usage patterns. It helps with identifying trends so you can quickly address any potential issues.

Learn how Orb can help you establish a hassle-free consumption-based billing model.