Financial Management is lost in the Clouds
May 12, 2022–
You made the move and now your organization is financially lost in the Public Cloud. The main objective for many successful Cloud projects is completing them on time and meeting all business requirements. Public Cloud costs are always forecasted inline for the business initiative or project, but most lack the structure and maturity for successful Cloud Financial Management. The end result is a very successful Cloud deployment with costs that quickly spin out of control and are nowhere near the financial forecast.
FinOps is quickly growing as a must have in IT organizations
The attraction to Public Cloud is driven by the flexibility and scalability it brings to your organization and how quickly you can grow your business and increase efficiency. The cloud first approach is limitless in resources and allows your organization to scale in an “on demand” environment. The challenge many IT organizations now face is shifting from a fixed cost IT culture to a dynamic IT operational model. This operation model brings forward resource flexibility options and a greater need to have controls that link IT development to IT procurement.
Cloud economics now requires expertise in Cloud finance, operations, and communication. This brings forward a huge gap in the market and quick adoption of FinOps. Cloud Advisory services are a must have for any cloud environment. As a Public Cloud Managed Services Provider, at oXya, we are addressing a growing need to deliver this service for our clients.
Understanding the variable cost model of the cloud
The variable cost model of the cloud presents unique opportunities for capacity planning. oXya can help customers make more informed decisions around cloud cost optimization and resource utilization to get the most out of their cloud investment. We can review opportunities for committed and reserved instances. We recently evaluated a large fashion retailer’s environment to enhance SAP HANA DR capabilities and discovered reserved instances were never leveraged for workloads running for 24 plus months. This missed opportunity resulted in 70% loss of savings. Below is a quick hit list of opportunities to review in your Cloud Environment.
Cost Management Checklist:
- Optimize discount purchase opportunities, such as committed use discounts, reserved instances, and understand the right environment for on demand workloads.
- Full cost allocation and reduce waste or unused resources. Utilize procurement subject matter experts with accurate forecasting to guide cloud purchasing.
- Maximize value by centralized cloud volume buying power. Spend based vs. commit based contracts.
- Automate to maximize on demand workloads.
Ownership and Communication
When everyone shares the responsibility of managing cloud spend, individual teams must track and manage their own cloud usage against their budget. oXya can help customers employ best practices to bring increased visibility into their cloud spend.
FinOps brings together finance and cloud operations teams, including IT and engineering, to continuously improve cloud governance. oXya can advise this collaboration by ensuring that all users have access to the right information and controls for their cloud environment.
- Establish, monitor, and drive accountability metrics and KPIs.
- Map all cloud usage and costs to appropriate cost.
- Forecast impact of business decisions on future cloud infrastructure needs and cost.
- Organize cadence meetings with FinOps teams to discuss performance and trends that include opportunities for improvement.
This is short list of some of the key components to drive an efficient Cloud financial model in the Public Cloud. We can help you understand and our expertise will allow you to bridge the gap between development, operations, and procurement with ease.
While everyone should be responsible for their cloud spend, there is still a need for leadership. A centralized team guiding FinOps practices provides cohesive governance that can help cloud practitioners across all relevant business functions understand the variable costs of the cloud and take ownership of their cloud spend.
If you are interested in oXya’s approach to FinOps as a leading SAP Managed Service Provider, I’d love to hear from you — reach out to me and my team here: https://www.oxya.com/contact-us/