FinOps 101: Demystifying Cloud Financial Operations for DevOps

In an ideal world, all organizations would have a dedicated FinOps team—or at least a single specialist who could work to ensure that the cloud was operating in a financially savvy way. Of course, in reality, most organizations are strapped for skills and are operating lean teams where responsibilities are spread thickly across employees. In that case, DevOps professionals are likely to get left holding the FinOps bag and tasked with implementing FinOps best practices into their everyday cloud operations. If that sounds familiar—here’s your guide to getting started.

The Cultural Shift of Considering FinOps

In many ways, it’s not that great a leap for DevOps to start thinking about FinOps. After all, the underlying goals of both strategies are to optimize, improve and streamline operations. The difference is that DevOps is focused on software development and technical skills, while FinOps looks at the financial costs of operating on the cloud.

The biggest challenge is that sometimes these goals may be at odds with each other. If DevOps teams are tasked with getting new software releases and fixes out of the gate as quickly as possible, that can often come at the expense of the most cost-effective solution. Think, for example, about AWS on-demand instances in the cloud. It’s arguably more FinOps-friendly to look for reserved instances, savings plans and committed use discounts and to put into place right-sizing opportunities where possible. However, with the pressure on DevOps teams to keep up an agile release cycle and offer quick fixes, anything that stands in the way of their flexibility and freedom can feel worth the price tag.

As a result, it can be a true paradigm shift for engineers and DevOps teams to start thinking about FinOps first, especially if they already feel that their plate is full. Here are some best practices that can help to smooth over any bumps in the road.

Make Engineers Accountable

Don’t simply add new stakeholders who are responsible for cost management and FinOps, as they will quickly become adversaries of your engineers. Instead, ensure that your technical teams and developers realize that they are responsible for their cloud costs. They need to know what they are using and they need to codify and document how they are looking to use their budget more effectively.

Of course, the business has a role in this too, showing engineers best practices for FinOps, such as shutting down idle resources, right-sizing instances or making smart architecture decisions. 

Explain That FinOps Isn’t a Cost-Cutting Initiative

If DevOps teams have been given the equivalent of a blank check thus far, it can be a tough sell to start tightening the purse strings. Explain to DevOps teams that you aren’t looking to cut their budget. In fact, you might even be increasing it!

FinOps is all about smarter financial operations, so if engineers can show that they can save money in one direction, they can channel that to new features, technologies and tools that make them happy. Giving DevOps teams control over FinOps decisions offers more autonomy and control—and that’s a great thing.

Ease the Mental Load With Low-Hanging Fruit

Once DevOps teams get much-needed visibility over their cloud usage and realize that they are gaining responsibility and autonomy over their behavior, you want to guide them to recognize where they can make changes. Challenge all your DevOps stakeholders with the same KPIs, and see who can come up with innovative ways to incorporate cost savings into business-as-usual. Some KPIs that could be a great start include:

• Coverage: Use of reserved instances, savings plans, spot instances or committed use discounts.
• Right-sizing: The opportunity value of downsizing or terminating instances that are idle or underutilized.
• Orphan/idle status: Tracking the percentage of orphaned EBS volumes or snapshots; you can drill down into a specific time period, such as over one month.
• Forecast metrics: Consider using the variance between a forecasted bill and the actual costs and aim to reduce this as much as possible.
• Incorrect assignation: This would highlight oversized or incorrect instance types, S3 or EBS storage on the wrong tier, unattached elastic IPs or poorly tagged/ untagged resources.
• Peak hours: What percentage of development resources are running during peak hours or running when they could be shut down; for example, on weekends?

Automation Incorporates FinOps Best Practices in a Hands-Off Way

If this all sounds like a full-time job in and of itself—you’re not wrong. You’d be forgiven for wondering when DevOps teams are meant to actually develop and build! To keep engineers and technical teams productive, make sure that you’re offering the right tools and technology to lighten the load where possible, especially where automation and AI can do a better job than a room full of DevOps or FinOps experts.

One example is automating the purchasing and selling of reserved instances in real-time, so that you’re never left buying on demand. Another is automating the removal or rightsizing of idle or underutilized resources, respectively. When your DevOps teams see that you’re offering the technology to make FinOps simple, they are much more likely to do their part elsewhere.

DevOps and FinOps

In recent years, security teams have championed the idea of DevOps ‘shifting left’ on security best practices to get security included in the process of agile software development during the build stages.

Well, you heard it here first: It’s time for a similar shift for finance and cost optimization.

Just as engineers can no longer get away with ignoring security in the way that they work, financial optimization needs to be front and center of DevOps teams’ day jobs. For this to work and for DevOps to incorporate FinOps goals seamlessly, businesses need to champion visibility for cloud usage, a culture of cost-optimization and a strong foundation of automation that bakes best practices into everyday work.