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FinOps principles: Collaboration

FinOps-Principles - Collaboration

The fourth and final principle of the FinOps methodology is Collaboration. As a quick recap, here you can find articles Visibility, Optimization and Control principles.


What do we mean by collaboration in FinOps?

There is practically no room for development without collaboration: we interact with other people to get feedback, grow and complete some complex tasks which cannot be done on our own. Proper cloud usage is exactly an example of such a task. And by collaboration, we mean not only interaction within a team of engineers or within one department but cross-functional collaboration within a company where engineers, operational, finance and executive teams are involved.

Why is it important?

Because actions and decisions made by one functional team influence others, and the impact can be significant or even fatal for a business. Just imagine the case when an R&D team starts a new project and provisions hundreds of new VMs for that without proper budget planning or notifying the finance and executive team about a cloud bill forecast. Or the executive team cutting costs without proper planning with engineers.

The majority of cloud actions cost money: this is the nature of clouds. You pay for computing, storage, traffic, PaaS, marketplace products, etc. Staying in budget and R&D elasticity is an equilibrium that is not possible to be achieved by one person. For small businesses it should be at least about the collaboration between CTO/VP of Engineering and CFO, for medium-sized and enterprise companies the process and collaboration should be more complex. There should be a FinOps team (it doesn’t mean that they need to sit in one room at the same time) of executive team members translating company strategy; finance people responsible for budgeting, financial control and forecasting; and engineers/operations/DevOps team that works directly with a cloud.

The FinOps team should be responsible for the following issues

  1. Defining cloud usage strategy
  2. Defining and adjusting cloud budgets
  3. Setting cloud usage practices
  4. Reviewing results, adjusting if necessary

Crucial FinOps roles

I would like to highlight some crucial roles in the FinOps team:

  1. Financial analyst and controller – a person that translates expectations and goals from the finance team. It can be CFO or somebody from the CFO office.
  2. Cloud practices visioner  –  a person who sets cloud usage best practices, educates engineers how to properly use clouds and explains why cloud expenses should be another KPI in R&D. Usually, it’s either a separate role or somebody from the DevOps team.
  3. Executive staff –  Senior VP or a C-level positions who controls how the collaboration works and reviews results.
  4. Engineers  – use clouds according to the best practices and budgets and report if there are any escalations.

I have no doubts that the main reason why companies do not succeed with clouds or have serious issues using them is the lack of proper collaboration and planning. Cloud is another fragile asset companies have at their disposal but it brings outstanding results only if it is used properly. Don’t underestimate the value of cross-functional collaboration and cloud usage when it comes to getting to another level.

Nick Smirnov

Nick Smirnov, Digital transformation & FinOps enthusiast and visionary, CEO at Hystax

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