By Ankur Patel, Managing Director | Orange TechnoLab Pvt Ltd
Cloud computing offers individuals access to data and applications from nearly any point of access to the Internet, offers businesses a whole new way to cut costs for technical infrastructure, and offers big computer companies a potentially giant market for hardware and services – Jamais Cascio
The optimal management of cloud resources is a complicated process but needs to be done to ensure better returns on investment. FinOps is required to ensure cost optimization of cloud resources so that businesses can find the correct balance between cost, quality, and dexterity and focus on innovation and better business outcomes.
The advantages of the cloud are innumerable. The most important benefit is that they let you pay as you use which is meant to keep your costs under control. However, the reality is quite different as enterprises may find monitoring the cloud resources difficult which results in costs shooting up and decreasing business margins. There are a couple of issues that hinder the optimization of cloud resources
Silo Functioning
When businesses function in silos, it is tough to have visibility on which vertical is buying or using which service since procuring cloud services is very easy. At an organisation level, it becomes tough to analyze costs and calculate the generation of business value.
Complex Pricing
The granular offering of services and pricing thereof makes it extremely dynamic and complex. It becomes difficult for organisations to forecast and budget their needs and usage resulting in immense wastage. This creates an urgent need to create a solution that will help to manage cloud investments and extract maximum value.
Role of FinOps in the Optimization of Cloud Resources
FinOps plays a crucial role in managing cloud resources and helping enterprises develop a cost culture. The need of the hour is to ensure that informed decisions are made throughout the organisation that can help to create the balance needed to optimize cloud investments. To this end, it is important to have a smooth flow of information throughout the organisation so that the total requirements are visible. This will help to optimize the costs better as standard practices can be adopted for procurement instead of working in silos. Before an organization starts off with the revamping process, it needs to follow a sequence.
Assessment of current reality – Evaluation of the current status of the IT infrastructure and the cloud resources is the first step towards any upheaval of the status quo. It is essential to assess the current cloud costs, their allocation by business verticals and cost centres, alignment with business requirements, the return on investment, generation of business value, availability of resources and skill sets, and the gaps therein. It is important to assess the current reality and compare the same with industry standards and the performance of peers to know where you stand.
Development of cost optimization strategies – After the assessment of the current reality is completed and the gaps identified, it is imperative to define objectives and design a strategy for cost optimization. This activity needs a long-term vision and should not be treated as a quick fix.
Optimization of cloud costs means paying only for what you need which involves managing resources better, avoiding silos, removal of waste, opting for the right sized services, getting the pricing right, and adjusting for future needs. This will require the buy-in of all the stakeholders in the business.
Real-time monitoring – Having proper governance and cost control mechanisms is key to managing cloud costs. It helps to have a dashboard to monitor cloud costs in real time so that the enterprise can extract the best value from the cloud.
Automate a cost reduction model – Once you figure out the cloud consumption model and how you need to optimize it, it is best to set up an automated cost reduction model that can help you continuously monitor and optimize the cost, speed, and quality of the cloud services. Automation is very important for cost optimization. New technologies like machine learning can ensure that resources are used efficiently, track consumption, identify flaws, and make course corrections.
In conclusion, a collaboration between stakeholders and open communication between FinOps, IT, and other functions is important. Ownership of the process and accountability will allow teams to track their performance and fix gaps. There should be an exclusive team from FinOps to
manage the cost benefits and extract the best value from the cloud service providers.
The key lies in creating an automated system and constant real-time monitoring to arrest flaws as soon as they are detected. A continuous variance analysis mechanism will be able to provide useful insights into the business performance and work on fixing the laggards. FinOps can help to
drive synergies between the various moving parts of the business and generate value by the optimization of cloud resources.