FinOps 101: Best Practices and AWS Tools for Cost-Effective Cloud Management

With the cloud becoming ubiquitous in businesses across geographies, sizes, and industries, many organizations are also quickly discovering that optimizing the cost of cloud infrastructure is easier said than done.

Rapidly rising costs, bloated over-provisioned infra, and a lack of ownership of cloud expenses among IT teams are increasingly common issues. The answer to these challenges is FinOps.

What is FinOps?

As defined by the FinOps Foundation, FinOps is an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance, technology, and business teams to collaborate on data-driven spending decisions.

Just as DevOps brings development and IP operations teams together, FinOps breaks down barriers and eliminates silos on the financial side of IT operations. It brings together finance, development, IT operations, product management, and other associated teams to streamline the management of cloud costs.

How do you get FinOps right?

FinOps is about organizational culture – it brings together all the stakeholders in cloud cost management to enable informed and holistically considered decision-making, optimize organization-wide cloud infrastructure capacity, remove infra blockers to technology initiatives, and of course, minimize overall cloud spend for a given requirement.

We would strongly recommend reading the FinOps Principles detailed by the FinOps Foundation as a starting point to a successful FinOps practice.

And to give you a little more of a boost, here is a list of FinOps best practices that go a long way toward achieving your FinOps goals.

1. Get the whole team to buy-in to the initiative – without all participants on board, the benefits of FinOps tend to fall short of potential.
2. Run an in-depth assessment of the resource requirements of all your applications across platforms using techniques like resource tagging.
3. Map costs to business metrics to establish a reliable method of assessment. Define KPIs and benchmark your performance against peers.
4. Monitor and optimize the size of your cloud infrastructure to closely match your actual requirements, and also optimize resource utilization.
5. Reduce costs by committing to reserved instances and other cost-saving offerings in advance, based on careful analysis of resource usage.
6. Make sure your applications are built for the cloud, to give you the ability to scale resources up or down based on traffic.
7. Harden the FinOps practice into your organization’s culture with clear and consistent communication, and regular reviews to keep the optimizing process active.

FinOps and AWS

Amazon Web Services (AWS) is the world’s leading public cloud provider, and so if you plan to implement FinOps in your organization, chances are that cloud financial management (CFM) for AWS will be a significant part of the practice.

While all the principles of FinOps and the best practices listed above hold true for AWS as well as other cloud providers, here are some AWS-specific tools and services that will help you on your journey.

1. AWS Cost Explorer, and the even more detailed AWS Cost & Usage Reports, help you track and visualize your AWS resource usage and costs across products and over time.
2. AWS Compute Optimizer helps you choose the optimal AWS resources through analysis of the resource utilization of your workload and AWS’ own extensive experience.
3. AWS Savings Plans offer considerable cost savings (as high as 72%) in return for longer-term committed use of compute capacity.
4. AWS Well-Architected Framework includes a Cost Optimization pillar to educate and guide customers on best practices for design, delivery, and maintenance.
5. AWS Cost Management enables accurate budget planning by predicting likely costs and recommending ways you can lower costs through optimization of pricing.

At Noventiq, our capabilities in delivering DevOps as a Service as well as AWS Cost Optimization services dovetail into helping you set up and run a successful FinOps practice. Talk to us to see how we can help you take the next step on your cloud optimization journey.