4 dimensions for driving FinOps adoption
In this article, I am presenting a simple approach consisting of 4 dimensions to help structure and drive Cloud FinOps adoption. During many presentations and discussions I have realized that teams are looking for options on how to get started or move to a next phase in their FinOps journey. The amount of information, time investment and organizational constraints (for instance structure, processes, priorities) can be overwhelming. The aim is however not to provide an exhaustive framework, rather to offer a pragmatic structure to identify, initiate and follow up on FinOps foundational activities.
Disclaimer: I work at Google in the cloud team. Opinions are my own and not the views of my current employer.
Cloud FinOps is a framework that brings together people, process and technology promoting and driving financial awareness and accountability in the organization. By creating a balance between having no and tight controls on cloud spending it aims to create agility and innovation while managing cost and putting business value at the center. Too many controls lock down teams with increased approvals and reduced flexibility resulting in limited innovation and growth opportunities. No controls however will create wastage and make it difficult to track against business value realization.
The whitepaper Getting started with FinOps on GCP outlines a framework for Google Cloud Platform (GCP), covering the teams required, the processes and behaviors to embrace, the outcomes expected, and an approach to implement it. My previous posts Introduction to FinOps on Google Cloud and Learning more about FinOps on Google Cloud discuss in more detail the increasing importance of Cloud FinOps and the resources available in Google Cloud to get started and grow financial awareness and accountability in your organization.
But adopting FinOps successfully in an organization cannot be limited to processes and controls; it depends heavily on enabling the right cultural change across many different stakeholders across the organization. This is not a one-time or linear concept rather it requires an iterative approach where improvements are introduced continuously. A key factor is enabling the collaboration between teams. Many approaches and timelines are possible but always centered around building communities, creating awareness and upskilling teams. Examples include creating newsletters, facilitating knowledge sharing sessions, gamifying continuous optimization and especially recognizing valuable contributions.
While it is important to get started, the success will depend on the adoption and moving from a one time effort to business as usual. This will take time, so it is important to aim for progression rather than perfection: start small and continuously improve. It is important to create a psychological safe environment: teams need to be comfortable to act. Mistakes can happen and are analyzed so that they don’t happen again. Alternatively, recommendations can be made without needing to take the responsibility for other (or even all) teams in the organization. By promoting and supporting collaboration, openness, and blamelessness in every part of the FinOps framework, it allows creating a lasting foundation for change and drives new behaviors and outcomes.
Have a look at your organization’s structure and what supporting aspects you can leverage. There might be change or transformation programs that you can align with or successful methods applied in the past that can be reused. Some useful techniques to explore include:
- Create a communication strategy around the importance of FinOps for the organization
- Set up a door opener for everyone to get more information or get involved: a landing page on the intranet, a mailbox or chatroom to ask questions, etc.
- Identify FinOps champions across the organization and include them in the change
- Welcome people that want to help and provide them with the support and resources they need
- Celebrate successes to value people’s contributions
- Evaluate and adapt your efforts regularly and since change takes time, make sure that you persist and always work with a strategic vision in mind
It is important to align on the strategic vision for FinOps early on. Defining what it means for your organization and the desired ambitions will provide a direction for your journey. It can help in communication, setting goals and embedding actions. In that way every stakeholder in the organization will have a shared understanding when talking about the topic. Thus, the investments needed and results can be linked back to reinforce its importance.
A simple FinOps adoption framework
The below framework helps to identify, initiate and follow up on FinOps foundational activities. It provides an alternative structure next to the ‘Inform — Optimize — Operate’ framework and classifies FinOps actions in a pragmatic way. It is based on four dimensions focusing on collaboration and teamwork. And to make this a success make sure to
- Encourage people to take initiative, try new things, provide feedback and learn in a safe and positive environment
- Celebrate successes and learn from failures.
- Recognize and reward employees for their accomplishments.
The four dimensions for for driving FinOps adoption are::
- Communication: make information available (cost, lessons learned, best practices, …)
- Community: facilitate collaboration and knowledge sharing
- Visibility: create transparency and awareness on FinOps experts (people), practices (process) and tools (technology)
- Best practices: invest in skill development, continuous learning and knowledge management
Make information visible
For teams to understand how their actions impact cloud spend they first need to have visibility on the relevant data. Informing the teams with accurate data improves this understanding and facilitates moving to the next phase: making them accountable for managing and improving their cloud spend.
A good starting point is the introduction of cost visibility dashboards. But these should not be introduced in isolation, rather they should be supported with a strong governance and operating model fostering a cost-conscious, empowered and accountable culture.
Key activities:
- Create cost visibility dashboards and make them accessible to all stakeholders
- Provide training and coaching to use and understand each dashboard
- Ask for feedback, improve and start contextualizing for the different needs of your stakeholders. Some of the factors influencing whether or not teams will use these dashboards include:
- Information which is not up to date, relevant or complete
- Information requiring a lot of effort to obtain or process manually (for instance using extracts) - Use the dashboards in daily tasks and communications. Making them part of a daily routine will improve adoption and the use of the information for decision making. The objective is to integrate them into core organizational processes such as finance (budgeting and forecasting), delivery (architectural review) and training (cloud skills).
- Embed cost control and notifications by making use of budgets and alerts. You specify a planned budget amount and set alert threshold rules so that an automated action will be performed when this threshold has been reached.
- Repeat communications and actions as teams will not adopt new processes or tools from the start. It is important not only to emphasize the value for the organization but also for the teams.
Invest in a training program
From the start it is crucial to invest in skill development and continuous learning. This helps people to realize how decisions and actions influence costs and what actions can be taken to increase efficiency and effectiveness.
It remains important to find the best solution and associated cost to generate business value. Cloud offers many options to design and implement solutions, so are you making use of the most appropriate one? Have you optimized on the default settings? Are you not making use of options that are nice but not essential? This is an important consideration to unlock value from your cloud investment and involves both technical and business teams working closely together.
Cloud brings variable cost structures. It is no longer required to buy infrastructure upfront, you can use what you need and pay as you go. In the past this meant that costs were capped to the investment that was made avoiding surprises. Now, when you use more resources you will pay more. This brings opportunities but requires attention and understanding.
- Attention: Paying for resources that you do not need is waste. Examples include leaving development servers running over the weekend, not cleaning temporary data storage or not reviewing/adjusting default settings.
- Understanding: Not realizing how decisions and actions influence costs can create waste. Examples include performing networking traffic across regions continuously or querying excess data without needing it.
Offering training and enablement for teams is key in embedding FinOps and driving self-sufficiency, having many benefits including:
- Increased cost consciousness, improved architecture, up-to-date knowledge, …
- More efficient delivery (faster time-to-market), better customer satisfaction, …
- Better morale, more interesting work, continuous learning, …
And while these benefits often talk for themselves, it remains important to demonstrate the value for the organization. While it can be a challenge to free up time and resources, making a business case helps you to provide a measurable basis for discussion:
- What is the impact of saving $1 per day per project? Even worse, what is the impact of spending $1 more than needed every day!
- What recommendations are proposed by the platform?
- What are immediate actions that can be taken? (clean up resources, review default settings, etc.)
To make this possible it is important to create a psychological safe environment. Teams need to be comfortable to act. Mistakes can happen and are analyzed so that they don’t happen again. A good example of this is to run blameless postmortems for major cost issues and share the outcome as a learning opportunity for others in the organization.
Key activities:
- Identity learning roles and set measurable objectives
- Define learning paths and create a growth journey that people can follow as development guidance growing their skills and competencies
- Free up time and provide opportunities for learning
- Enable self-service learning and knowledge sharing/consumption
- Gamify, incentivize the learning experience and recognize learning champions
- Blend different learning methods, including hackathons — incentivize people to contribute, knowledge exchange — briefing
- Communicate and be vocal to advertise upfront and debrief afterwards
- Define a framework for measuring the impact of training on the value delivered: cost effectiveness, solution resilience, product innovation, time-to-market for new features, employee engagement and retention, etc.
Start collecting (meta)data
My blog post Growing your Google Cloud Landing zone with data explains how data can enrich a landing zone and the role it can play in a FinOps framework. This comes down to organizing the automated services by orchestrating them centrally and storing the necessary data in a landing zone metadata platform. Each service — including billing information — will store its output so that it can be used as input by other services. In this way this data will be always available, ready for services, users and stakeholders who need it — transparent, accurate and up-to-date.
The term ‘platform’ is well chosen. Enabling your Cloud FinOps framework; it is never finished, grows and evolves over time. It needs to be treated as a product, not a project — with dedicated ownership embedded into your organization’s governance structure. Start small and grow in phases, introducing new data sets and services by focusing on use cases that matter for your stakeholders. As the adoption of the platform grows, the value of FinOps for the organization increases — acting as an enabler for the other dimensions of this approach.
The picture below illustrates how different FinOps data concepts can be combined to generate insights and actions for making information visible and driving timely actions.
But data collection and sharing should not be limited to platform or application data only. By creating a cross-team knowledge base it is possible to store cost-efficient reference architectures, best practices and lessons learned. Remember the post mortem highlighted in the previous sections — they can also be included here.
Key activities:
- Set up a billing export to BigQuery and create your data environment for easy analysis and visualization. As is the case with many things, it all starts with data.
- Introduce new data sets and services by focusing on use cases that matter for your organization; examples include budgets, forecasts, assets, owners, etc. Focus on delivering value and generating user adoption through experiences offering self-servicing, (realtime) up-to-date insights, (proactive) notifications, and much more.
- Create a knowledge base capabilities to share, consume and search reference architectures, lessons learned, postmortems, contacts, etc.
- Provide training and coaching to use and understand the data sets and services.
- Ask for feedback, improve and start contextualizing for the different needs of the users.
- Have a plan of what comes next, socialize aggressively, add more capabilities getting buy-in from stakeholders across the organization.
Create awareness
Culture is one of the most important aspects of every transformation. By building a Cloud FinOps culture teams get better at making use of data and incorporate evidence-based decision making into their daily routine. Employees are empowered to focus on the right opportunities, develop practical solutions, grow their skills and share experiences with others. Meanwhile, the organization is able to improve its cross-functional accountability and focus on business value.
It is important to ensure that different stakeholders in the organization are enabled and work together to understand and act upon decisions that are taken in isolation. Based on this collaboration, experiences and lessons learned can be shared with others.
Key activities:
- Start with building an effective and embedded FinOps team with support from the organization’s management. Start small and iterate.
- Regular structured communications to showcase new behaviors and growing capabilities help with continued buy-in, excitement, and sponsorship: newsletters, town halls, events, etc.
- Don’t just focus on those already familiar with FinOps. Fostering the right culture and improving awareness across the organization will result in a greater positive impact.
- Make the link with the foundations for core concepts and repeat this regularly. An example is the creation of a FinOps charter — a living document that guides internal teams and main stakeholders on the mission of the FinOps operations.
- By establishing continuous learning and improvements to processes and technology, the organizational capabilities will level up and maintain their relevance and interests.
- Develop and promote communities for collaboration and knowledge sharing
- Celebrate successes and recognize/reward employee initiatives and contributions
Closing thoughts
It is important to realize that implementing Cloud FinOps is not a one-time activity and that there is also not one single path to take. At every point along the way, you will need to reflect, fine-tune your approach and make decisions on how to continue your journey. The approach presented aims to help structure and drive Cloud FinOps adoption in phases. Along your journey, always keep the following themes in mind:
- Invest in training, promote continuous learning and facilitate knowledge sharing.
- Start small and iterate. Appreciate feedback and listen to your teams.
- Foster an open, inclusive and psychologically safe environment.
- Invest in data and technology as an enabler. Make it easy for everyone.
- Celebrate successes and create awareness. Harness the power of communities.
- Keep an open mind and challenge assumptions. Always think further to what else is possible.
