What is FinOps?
“FinOps is a public Cloud management discipline that enables organizations to achieve maximum business value from the Cloud by empowering technology, finance, and business teams to collaborate on data-driven spending decisions,” says J.R. Storment, Executive Director of the FinOps Foundation.
Cloud management is often decentralized, which makes costs difficult to predict and control. FinOps addresses these challenges by fostering collaboration between finance, IT, and DevOps teams to manage Cloud spending across the organization.
Its implementation depends on close coordination among stakeholders, with a clear objective: to optimize decision-making and gain control over Cloud-related expenses.
Four steps to implementing a FinOps infrastructure
Implementing a FinOps infrastructure involves four complementary stages. It begins with a study phase, aimed at gaining full visibility into Cloud budgets and how resources are allocated across teams.
Next comes evaluation, which focuses on analyzing the performance of instances or clusters to identify over- or under-provisioning.
The rationalization phase follows, allowing workloads and resources to be adjusted in order to optimize both costs and performance.
Finally, the combination phase seeks to consolidate contracts with Cloud Service Providers (CSPs) and align Cloud resource usage with the organization’s broader strategic goals.
When performed regularly, these steps support ongoing innovation while maintaining control over costs.
A collaborative approach for strategic optimization
While IT and DevOps teams can often make technical decisions independently, a collaborative approach significantly enhances strategic value. Effective workload placement, combined with precise resource management, can lead to substantial cost savings without compromising performance.
Cloud has become a central pillar of the IT ecosystem—an evolution widely supported by CFOs. However, the shift from capital-intensive hardware investments to flexible operational expenditure introduces a new layer of cost variability.
In the absence of coordination, Cloud services may be procured in a fragmented manner, resulting in resource misallocation and inflated costs. This issue is further compounded by siloed organizational structures and geographically distributed teams, particularly in large enterprises.
Unlike traditional centralized procurement models, Cloud services can often be subscribed to directly by individuals or teams, making financial oversight more complex.
The democratization of Cloud tools fosters agility, but without proper governance, it often leads to redundancies, inefficiencies, and uncontrolled budget overruns. FinOps addresses this by establishing a robust governance framework, led by a multidisciplinary team responsible for strategic oversight.
When implemented effectively, a FinOps model strikes a balance between performance and cost control, enabling sustainable and optimized management of Cloud resources.
However, it’s important to acknowledge that this model depends heavily on seamless collaboration among finance, IT, and DevOps teams. In practice, conflicting priorities, organizational silos, and diverging interests can make this collaboration challenging. Without a shared commitment and strategic alignment, even the most well-intentioned FinOps initiatives risk falling short—or being steered off course entirely.
In conclusion
Cloud computing is set to continue its rapid expansion in the coming years, bringing with it a growing level of complexity. According to Gartner, this evolution will be shaped by four major trends. First, the ubiquity of the Cloud: by 2026, spending on public Cloud services is expected to exceed 45% of total enterprise IT spending, up from less than 17% in 2021.
Second, the regionalization of Cloud strategies is gaining momentum, as organizations diversify their providers by incorporating local or industry-specific players. Sustainability is also becoming a decisive factor, with providers increasingly evaluated based on their environmental commitments. Finally, the programmability of Cloud infrastructure, especially through the integration of artificial intelligence, is expected to become mainstream, driven by fully managed platforms offered by Cloud providers.
These trends are putting greater pressure on Cloud financial operations and reinforcing the need for a structured FinOps approach. FinOps provides rigorous financial governance to help organizations control costs while maximizing value. It also offers a structured framework to navigate the complexity of modern IT environments, along with an analytical approach to drive performance and ensure the long-term profitability of Cloud investments.