8 Tips to Conquer Your Greatest Cloud Cost Challenges with FinOps

Cloud migration is a necessary strategic move for companies to stay relevant and agile in today’s competitive business environment—but realizing its financial benefits is hard work and requires dedicated attention.

Without strong cloud financial operations (FinOps) capabilities that minimize financial threats while maximizing opportunities, the objective of ensuring a cost-efficient cloud journey for your business can be challenging. Here are eight tips for effective cloud cost management.

1. Connect cloud costs to business goals

Cloud cost optimization is more than just about reducing costs. A great cloud FinOps strategy starts with aligning your cloud investments with business objectives in terms of business benefit, functionality, revenue, and cost implications.

Make sure engineering, IT, and business leaders have conversations to understand the cost requirements and goals of their projects. By mapping cloud costs clearly to productive activities and teams, you’ll be better positioned to optimize these costs and benefits for business profitability.

2. Establish an enterprise-wide cloud center of excellence

Having a cloud center of excellence (CCoE) is essential for successful, end-to-end cloud adoption. CCoEs are centralized groups responsible for overseeing and managing the many moving parts of your cloud infrastructure. They’re all about standardization and governance, ensuring teams have the knowledge they need to make good operational decisions based on cloud cost metrics.

A highly effective CCoE can guide, expedite, and optimize your organization’s cloud experience, helping you maximize cloud investments by promoting cross-organizational adoption with consistent standards, maximum enterprise-wide discounts, as well as other efficiencies. Establishing a CCoE early is an industry best-practice approach to streamlining the shift to cloud and driving meaningful change while maintaining cost efficiency.

3. Take a proactive cost-management approach

In many cases, engineering teams and business leaders may not understand the reality of cloud costs until finance brings it up. Meanwhile, finance often sees cloud costs only after they are incurred, when it’s too late to course-correct and rectify costly but avoidable mistakes.

Forward-thinking business leaders recognize the risk of traditional reactive cost management approaches and are taking measures to support cloud cost awareness and management practices with transparency and data analytics. The availability of timely and context-rich cost data, or “cloud cost intelligence”, enables predictive cloud decision-making and accurate projections for proactive change management, so cross-team stakeholders at all levels can leverage this intel to maximize cloud usage and efficiencies.

4. Include FinOps within your cloud management mandate

While engineers implicitly make purchasing decisions whenever they create or modify a solution, they traditionally do not manage the associated long-term costs. Rather, the finance team deals with cost controls after the fact. With the current speed of cloud and DevOps, however, this practice can be especially risky.

The cloud offers infinite resource scaling—and with it, potentially infinite costs. This means infrastructure costs aren’t capped at initial spending rate like traditional infrastructure and may fluctuate according to usage. Moreover, since it’s easy to scale capacity and applications on the cloud without having to manage resources like storage space and data centers, engineers often do so without tracking end-costs, causing projects to exceed initial cost projections and leaving finance in the dark until the figures come in!

While engineering is typically closest to, and can have the most direct impact on, the costs of cloud-based solutions, the complexity of cloud billing requires strong cloud expertise to understand and manage, so introducing FinOps into your cloud management mandate is crucial in helping you optimize costs early on.

5. Establish an effective approach and process structure

For cloud adoption and rollout, a successful strategy must include financial controls implementation and transparency to match the growing cloud services landscape and user base (internal and external).

Your cloud FinOps approach and process structure will complement and work in concert with your cloud strategy to provide greater visibility into your cloud spend and usage, helping you mitigate unnecessary spending and avoid overpaying for resources that never get used.

Here are some recommendations to begin with:

• Consolidate your cost views and reporting through proper account setup to optimize usage and promote maximum enterprise benefits.
• Establish standards, tools, and best practices to ensure consistency, efficiency, and cost-effectiveness across deployed solutions.
• Implement proactive controls for all your cloud resource types to mitigate the risk of incurring infinite costs as a result of the cloud’s dynamic scaling capabilities.

6. Keep cloud cost data team-relevant

More data isn’t always better. Your cloud cost metrics will be utilized across teams, but how they use these metrics in their decision-making process can differ widely. Engineering and finance may be looking at the same data, but in different formats and organized in specialized ways to answer questions that are important to each team.

Find out what types of cost data are most useful to the different teams in your company. Make sure the data can be presented in relevant terms for each audience. With this, you can reduce data clutter and improve the efficiency of decision makers.

7. Ensure your teams can access the data they need, when they need it

Data access is another critical aspect of your cloud cost optimization strategy. An effective approach to data management will help you reach a practical balance between security and efficiency, so you can enable access that is necessary for your organization to remain competitive and agile while managing risks appropriately.

Your CCoE plays a central role in defining healthy data governance practices and implementing dashboards that provide transparency into the metrics that matter to your teams. When the right teams have access to the right data at the right time, they can ensure product quality while optimizing cloud costs at every stage of the software development lifecycle, thereby positively impacting your bottom line.

8. Plan your strategy according to your business needs

If cloud utilization is crucial to your company’s growth or success, then building a cloud cost optimization strategy is equally so.

Look internally to decide if now is the best time for your business to launch and grow your cloud FinOps capabilities. If FinOps is already part of your cloud journey, conduct regular FinOps maturity assessments to track your organization’s growth and determine next steps to improve your company’s FinOps capabilities. If you lack the expertise to assess your cloud FinOps maturity or don’t know where to even begin, it helps to engage experienced consultants like Wavestone who can support and advise you on your cloud cost optimization efforts.

With the right strategy and partner, you can unlock the full potential of your cloud investment—with greater speed and efficiency at a lower cost.