Olivier Subramanian, Head of Cloud Advisory at BJSS, now part of CGI, highlights why robust FinOps practices are essential for maximising cloud operations and value.
Cloud computing has become the cornerstone for modern business IT operations. Indeed, last year, it was reported that 78 per cent of business leaders have adopted cloud in most or all areas of their organisation. This widespread adoption is unsurprising given the many benefits of cloud technology, which include greater flexibility, scalability and cost savings.
However, these cost savings can only be realised when organisations implement effective FinOps practices alongside cloud computing technologies. Unfortunately, this is an area where many organisations are falling behind. It has been estimated that around 80 per cent of organisations will initially overshoot their IaaS budget, which makes robust FinOps practices a business imperative. By uniting engineering, finance and business teams, FinOps can help organisations to maximise value and profit.
Smarter spending
FinOps practices offer a wide range of benefits to businesses, and importantly, many of these relate to the bottom line. When FinOps is incorporated as a central element of budgetary conversations, businesses can ensure they are extracting the maximum value from their cloud investments. Any savings that have been identified in this process can then be reinvested into business growth or innovation. These savings can also benefit customers, as demonstrated by BJSS, now part of CGI, which supported the NHS in migrating its e-Referral service to the cloud. This initiative, one of the most ambitious cloud migrations in NHS history, is estimated to be saving taxpayers £50 million annually.
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Using the FinOps framework also enables businesses to have greater financial agility. One of the great benefits of cloud is the ability for organisations to flexibly scale their resources to meet changing business needs, enabling businesses to dial up during peak demand or dial activity down during slower periods. FinOps practices allow organisations to monitor their costs, forecast the financial impact of scaling resources up or down, and manage their budgets effectively. This flexibility ensures that businesses only pay for what they use, helping to optimise their operational expenses (OPEX). Being able to have a clear and detailed picture of usage patterns empowers finance teams to better forecast OPEX, leading to more accurate budgeting and financial planning.
FinOps practices also help to promote a culture of collaboration between finance, operations and engineering teams. Working with this common foundation creates greater transparency and enables all stakeholders to be aligned in their efforts to improve costs and drive maximum value.
FinOps roadblocks
Despite the long-term benefits of cloud computing, the migration process often involves significant upfront costs, which can be a barrier for many organisations. A lack of investment at this stage can lead to poor FinOps practices and uncontrolled spending, ultimately undermining the original goals of cost optimisation and operational efficiency.
Furthermore, the complexity of managing cloud costs can be exacerbated by shifts in multiple licensing models. These complex licensing agreements can be hard to navigate and may lead to unexpected expenses if they are not carefully monitored. This isn’t the only area that requires constant monitoring. The dynamic nature of cloud services means that the continuous monitoring of the systems is a necessity. This ongoing process can strain resources and require specialised knowledge and expertise, which isn’t readily available in every organisation.
Conquering cloud
However, these obstacles are not insurmountable. To help reduce costs, organisations should thoroughly review and implement incentives from cloud providers. These include migration credits, volume-based discounts, special tools and expert advisory programmes, which are all designed to ensure a smooth transition and to help mitigate the initial upfront costs.
It is also important for organisations to examine their cloud computing strategically. Companies should focus their migration efforts on areas that deliver the highest value, such as customer-facing applications, artificial intelligence (AI) and data platforms. These high-impact areas not only drive business growth but also enhance customer experience, providing significant returns.
Finally, embedding FinOps into the organisational culture is critical for its long-term success. This often requires a shift in behavior and mindset as engineering, finance and business teams all have to work more closely together. Business leaders must champion this cultural shift, encouraging and empowering teams to embrace FinOps principles. The earlier this cultural integration begins, the more impactful and effective the FinOps practices will be.
Ultimately, with the right approach and commitment, organisations can overcome the challenges of FinOps implementation and fully realise its benefits, driving growth, innovation and financial agility throughout their business operations.
