Cloud offers a myriad of benefits that help enterprises become efficient, productive, agile and scalable. They are better equipped to respond to market fluctuations as well as become adaptable while ensuring cost optimization on cloud. However, cloud cost management comes with its own set of challenges and cloud financial operations if not monitored aptly, can incur additional expenses in no time. Cloud costs can add up real fast if factors driving cloud costs are not accounted for.
As per FinOps Foundation 2021 reports, only 15% of organizations have been able to adopt mature and evolving FinOps practices till date. But studies also reveal that FinOps team sizes grew 75% in the last 1 year and are expected to grow further by another 50% in the current year.
In this blog, we intend to highlight the most common challenges faced by FinOps team and how organizations today are gradually but surely moving towards more defined FinOps advisory practices. We have already seen in detail, what FinOps is, in our previous blog and if you wish to know more about Cloud FinOps, do check out our previous post on What is cloud FinOps and why do we need it?
Top FinOps challenges and its solutions
1. Incurring unnecessary cloud costs
Over provisioning cloud resources, under utilizing reserved instances and buying in excess are some of the common factors that trigger cloud wastes. To avoid unnecessary costs from mounting up, it is important to leverage intelligent cloud governance tools that can track and monitor near real-time cloud spends, generate alerts and reports on periodic basis and provide complete visibility to FinOps team about the as-is situation, to highlight trending costs as well as detect and curb cost anomalies and overspends, if any.
2. Establishing an ideal FinOps model
Trying to understand what workloads to move to cloud or determining which teams are most involved in cloud spends can be overpowering. Creating a cross functional team along with implementing the right technology and process can help develop FinOps strategies that align with business goals. Building an apt FinOps model would help measure the success of FinOps initiatives to better manage cloud financial operations.
3. Optimizing cloud costs for complete visibility
When enterprises are busy releasing new features, optimizing user experiences and increasing revenue and market share, cost optimization is often overlooked or misinterpreted. A typical cloud bill will consist of random data that may not provide a clear picture on the who, why, what and where of cloud spends.
Prioritising cloud cost management or optimization is a key challenge for enterprises. As cloud costs are variable in nature, selecting the right tool for monitoring and reporting costs, especially in a multi-cloud environment requires a great deal of effort. A successful cloud financial management technique capacitates end-to-end visualization of cloud spend and usage to measure cost effectiveness, promote savings and ensure complete real-time visibility across the cloud lifecycle. The right foundation to FinOps best practices can help standardize vendor details and billing information, map cloud spends to organizational constructs, allocate container and shared service charges and make informed decisions to increase the overall business value of cloud.
4. Empowering teams and driving accountability
Bringing together inter departmental teams comprising of developers, testers, finance, operations and cloud experts to interpret, support and take ownership of FinOps can pose as a huge challenge. Integrating DevOps and FinOps teams to ensure timely insights and recommendations for deeper understanding of workflows, ROI calculations and business performance measurement is not enough. Driving and encouraging these teams to raise cost awareness, build best practices and implement comprehensive cost management techniques to increase accountability is a must. Cloud cost management and optimization solutions must have the ability to provide custom reports and dashboards with role-based access to the involved teams. FinOps teams must also be able to access latest data and analytics to establish key performance indicators (KPIs) that would help make informed business decisions.
5. Resource tagging
Enterprises need to ensure correct tagging of resources for cost allocation while reducing inconsistency and manual efforts. Tagging can be time consuming and faulty but if implemented through a comprehensive tagging strategy, can lead to improved and accurate results. For overall accuracy, using appropriate cost tools and best practices can help collate relevant cost data, factor in the cost of untagged resources and enable integration of metadata sources with existing data from tagged resources.
6. Cloud cost forecasting
With inaccurate or insufficient cost data, FinOps teams are often unable to rightsize resources to keep a tab on cloud wastes. The solution is to implement best practices in analysing your application, workload and data on cloud, where historical data on usage of resources are taken as a baseline to forecast cloud budgets and analyse how the cloud environment will use up this budget once its functional. This data helps detect areas of concern and cut down costs where possible, without risking user experiences and business functions.
7. Dealing with shared resource costs
Keeping track of cost measures or trying to identify which client used what resources individually in a shared environment is time-consuming and difficult. Automating the process via tools to assign the right resources to the right data can help rationalize costs.
8. Looking beyond IaaS
Cloud financial management is complex and to only account for infrastructure as a service (IaaS) is not enough. Financial management of the entire cloud ecosystem needs to also consider other spends like software as a service (SaaS) and on-prem costs. FinOps practices can be applied across all of these elements to build a comprehensive view of cloud costs. Financial management capabilities can be further enhanced by implementing intelligent cost tools that help determine, plan and optimize cloud investments across infra, platform and software services, technology, delivery and deployment.
With the advancement on cloud, challenges are bound to be on-going, but the only way to stay ahead of the curve is to continuously evolve, innovate and modernize. To add more value to cloud, enterprises need to constantly elevate their people, process and technology with utmost emphasis on FinOps best practices to keep a check on their cloud investments.