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FinOps Cost Management

How to Operationalize FinOps Cost Management

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All too often we hear companies talk about the need for FinOps to reduce costs or understand how to account for spikes in cloud spend. However, few companies truly understand how to implement effective cost management or FinOps practice. Some of the challenge rests with who owns the practice internally. Is it the cloud operations team or finance? For many cloud IT teams, the cloud provider bill does not reach their desk or is too complicated to make heads or tails of it. In other cases, the team’s priority to focus on application features versus operational efficiency can cause compounding cost implications downstream. Whatever the issue may be, a FinOps expert can help point you in the right direction.


Automation Unlocks Effective FinOps Cost Management Practices


First and foremost, the key to establishing an ongoing FinOps practice is automation. As cloud practices have matured and companies continue to modernize, architecting for automation is table stakes. Automation is key to elevating security, proactive monitoring, and advanced deployment methodologies among many other areas. As much as automation has become a mainstream best practice, how it applies to cost management remains a mystery to many companies. It is fairly common for cloud teams to miss easy ways to save on cloud costs using automation. We are talking about significant savings here – the kind of cost-cutting that can equate to adding headcount or funding a new initiative.


To leverage automation to operationalize ongoing cost management, our FinOps experts advise customers to focus on 3 key pillars: cost optimization, cost transparency, and cost monitoring. At a minimum, if you have at least one of these pillars in place, you are ahead of the game. However, in an ideal world, you would have a FinOps or cloud operations practice in place to tackle all of these simultaneously.  You can accomplish this by hiring dedicated resources to manage and improve these functions, but the real value is in finding a managed services provider with a dedicated practice. A qualified managed services provider can both help you institutionalize your FinOps practice as well as implement the right tooling, monitoring, and automation at the infrastructure level to ensure ongoing efficiency. 


Cost Optimization to Drive Ongoing Savings

Cloud cost optimization includes more than simply connecting a cost management tool to monitor costs. That is certainly a key step, but to optimize spend, you need to understand how your automation is architected to include cost controls. This includes understanding how agents are installed, unattached or orphan services, and the VMs not utilized. Once you understand where you have areas to optimize, then you can create a process and outline how to eliminate waste and streamline for cost.


Additionally, autoscaling is particularly impactful to prevent sticker shock on your cloud bill and cut costs. This sounds easier said than done, and you would be surprised at how many companies come to us to help them configure auto-scaling or update it to meet current requirements. (Read more on autoscaling:Use Auto Scaling to Support Growth, Resiliency, & Cost Savings)


Finally, maintaining a steady state can be particularly challenging for most organizations. There are a ton of minor architectural adjustments that can easily be made with the right experts that can create major cost savings. There are also several ways to leverage Reserved Instances (RIs) to find ongoing cost savings.


Cost Transparency to Establish Predictability & Trend Analysis

Cloud cost tooling and platforms can provide reports on how much you spend and by service. But to truly understand what is going on with your cloud spend, you need the ability to look at it with meaningful context. Custom reporting to understand spend better and by service or department requires accurate tagging and metadata. When initially migrating to the cloud or designing the architecture, many teams did not consider how to implement tagging needed to enable greater transparency. This can lead to more work and consideration down the line, especially as you scale. With appropriate tagging in place for cost, you can create customized dashboards to help understand and allocate spend better.


Cost Monitoring for Proactive Cost Management

With the right tooling you can certainly see what you are spending at any given point and in some cases in real-time. Most IT professionals are not looking at cloud spend in regular intervals unless there is a problem though. When there is a problem, it is often too late to retroactively fix it as it relates to costs incurred, so it is important to proactively monitor costs. This way you can receive alerts when there is an issue, get cost anomaly protection, and identify anything unusual that would cause a spike in costs.


These three pillars are standard in most dedicated FinOps practices and with advanced cloud operations specialists. If you are looking to improve your cost management or would like to assess how you can better optimize your cloud spend, Logicworks experts are here to help. Talk to a AWS or Azure expert today

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