This is part 2 of our ultimate guide to FinOps blog series. In part 1 we defined FinOps, traced its evolution, identified the reasons that have given rise to it and provided an in-depth review of FinOps functions.
In this instalment of the ultimate guide to FinOps, we will dive into FinOps domains and roles, review the main responsibilities of those domains and identify the current organizational roles that are candidates for inclusion in FinOps teams.
FinOps is not an organizational monolith. Nor does it function in isolation. Even though a centralized FinOps team is essential, a good FinOps practice is inclusive and ropes in operatives from multiple domains with diverse skill sets.
The FinOps foundation outlines five major organizational domains that need to be involved in developing, implementing and operating the FinOps framework. Below we provide a brief overview of each:
The engineering domain is responsible for building, maintaining and operating organizational service offerings. It is also responsible for provisioning and operating the cloud infrastructure and services that the offerings run on.
As part of the FinOps framework, the engineering domain needs to build up expertise and knowledge about the cloud costing model. This would entail understanding the various models of cloud infrastructure and service procurement as well as the billing models.
An in depth knowledge of the cost/performance trade offs of various billing models for cloud infrastructure and services is also essential. Incorporating this expertise into service and infrastructure design is the next logical step.
Cost should also be incorporated as a primary metric to be tracked when designing and implementing the monitoring set up. Once in operation, the engineering domain should adopt a recurring process of ensuring optimal resource utilization, rightsizing, cost allocation, forecasting and budget tracking for the services deployed.
The executive domain is responsible for managing the organization’s technology stack, ensuring that it drives innovation and creates value in line with the company’s growth targets. It is also responsible for keeping a keen eye on any new technological advancements that if implemented can give the organization a competitive advantage.
As such, the executive domain has an essential role in the overall FinOps project. Since FinOps advocates measuring cloud cost against business value generated, the executive domain is perfectly placed to set in motion the processes and practices that will yield these metrics.
They are also well placed to institute processes to ensure teams are accountable for resource consumption and costs, improve transparency and ensure efficient resource utilization.
The executive domain is also the main driving force behind the cultural and process change that is required to implement a FinOps framework.
Finance and procurement teams are perhaps the most affected by the organizational move to the cloud.
Finance is constantly trying to get engineering to allocate/explain ever increasing cloud bills and to communicate these bills to management. Procurement is in a similar position, juggling the demands of engineering for more cloud services and having to defend the resulting increased costs to management.
Under the FinOps framework, finance and procurement teams collaborate with engineering and FinOps practitioners to develop more detailed and accurate cost allocation, chargeback, showback, capacity planning and forecasting models.
This collaboration should be centered around developing processes that make billing data more transparent and ensure accountability for the consumption of cloud infrastructure and services, with the ultimate objective of instituting a cloud costing model that view cloud costs through the prism of business value generated.
The finance and procurement teams can then also augment their negotiations with cloud service providers with the comprehensive costing reports from the engineering and FinOps teams.
As already outlined, the FinOps team includes personnel from multiple organizational domains. FinOps practitioners however serve as the core group around whom the entire FinOps framework revolves.
FinOps practitioners have cross-functional expertise and are responsible for implementing FinOps deliverables throughout the organization.
This core group of FinOps practitioners is responsible for such diverse activities as formulating and evangelizing FinOps best practices and processes, creating and maintaining robust communication channels, creating in-depth costing reports based on input from FinOps stakeholders, defining and driving awareness of the business value of the cloud throughout the organization and driving awareness about the cloud cloud billing model in the engineering domain. The ultimate aim of a FinOps practitioner should be implementing a unit economics based model to cloud costs.
Below we outline some of the current organizational roles that are candidates for involvement in the FinOps process as outlined by the FinOps foundation:
In Part 3 of the Utimate guide to cloud FinOps we review the core principles of FinOps. There are six core principles of FinOps, each of which is reviewed in detailed.
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