FinOps vs DevOps Approach to Optimizing Costs
~5 minutes read
The finance teams and the engineering teams should work together to optimize cloud costs, as huge cloud expenses affect the business negatively. Financial experts should consider the best practices of the tech world to work effectively. Developers, in their turn, should think about the financial consequences of their technical decisions.
However, many companies face the situation when the finance team offers cost reduction solutions that contradict the engineering team’s perspective. It makes the conversation between two departments adversarial, as both teams take into account only their departments’ efficiency metrics.
In this article, we’re going to explain why the IT department should take part in the cloud cost optimization process, too. Also, we’ll make the arguments proving that cloud costs aren’t only the finance team’s responsibility.
Below we listed 4 reasons why cloud cost optimization isn’t only the FinOps team’s responsibility.
Reason 1: DevOps team CAN and SHOULD control cloud costs
Developers usually choose cloud services based on their own judgments. It has a positive side, as they can pick the products that are more convenient in terms of usage, increase productivity, and fulfill their tech needs. However, it is pretty common when the IT team doesn’t consider how much these services would cost to a company.
So, it is better to create an environment where tech specialists taking part in decision-making are informed of cloud services costs as well. In fact, cloud services cost should become one of the top priorities of developers in addition to cloud architecture governance and maintenance.
The perfect scenario for two departments’ collaboration should be the following:
- The DevOps team forms the extensive list of required operation services and then presents reasons for choosing a particular service together with its cost to the FinOps team. That would bring more clarity to the FinOps team when forming and allocating cloud budget, as well as when looking for possible ways to cut expenses.
- FinOps marks which services are strategically important and business-critical so can not be replaced by cheaper ones or simply eliminated. What is more important, Finances at this stage can also present reports on the most cost-driving services or resources. That would let tech departments re-analyze current architecture and think about in which ways they can make cloud usage more cost-efficient.
Reason 2: Teamwork encourages profitability
Even though it’s faster to make decisions on your own, there are good chances that the financial department condemns itself to select an inefficient solution.
Finance and tech should work like left and right brains: while one is busy with finding a creative solution, the other estimates whether this solution is practical or not. All the defined ideas can be discussed with the leadership team or a business owner, which is the third – and final – party taking part in the decision-making process.
Teamwork eliminates energy-consuming disputes between IT and financial departments.
Reason 3: Cloud cost data interpretation
Too much information (TMI) is a significant problem for the financial department, especially concerning cloud cost optimization. Typically, information in cloud bills is overloaded and confusing, some of the data isn’t necessarily relevant to the specialist trying to examine and understand it. As a result, it becomes harder to explain to the business owners what exactly went wrong in any given month.
The possible solution for different decision-makers here is to learn and interpret cost data that are relevant to their expertise. Let’s clarify the roles in the shared responsibility model applied for the cloud cost optimization process. It will help you to see what different departments should focus on.
The finance team’s main task is to have a global awareness of the real cost of the cloud architecture: instances, services, storage, and other resources. This information allows businesses to understand the most and least profitable and efficient applications and features.
The financial department also manages cloud budgets and makes sure the budget is spent wisely. What’s more important, the FinOps team creates reports which can be used for forming cost optimization recommendations.
It’s vital to consider that the role of finance is not to learn cloud computing and discover the details of instances deployment and data migration. If a financial expert in your company has this knowledge, it’s an added advantage, however, usually, the tech team takes that role.
The developers have more knowledge of what happens in the cloud. They can assist the finance department in avoiding cloud cost optimization mistakes. In fact, tech guys are more qualified to optimize cloud costs than financial specialists.
Due to technical know-how, devs can allocate computing resources, choose the right size of instance and type of storage, and so on – all of this influences cloud costs. Developers can also use external tools, identify hidden costs, and assume where exactly huge cloud expenditures come from.
Reason 4: Avoiding development slowdowns
There’s a common misperception among tech guys that thinking about the cost while developing will slow them down. In reality, it’s quite the opposite – having access to real-time cost data can actually increase the pace of development. Organizations that are willing to take cost as an operational metric can build more solid systems and speed up their modernization.
As the cloud can be scaled infinitely, developers can build their applications using maximum resources. However, we recommend learning to use just the capacity they really need instead. It will cut down on unnecessary waste.
Cloud cost optimization for DevOps and beyond
The responsibility for the cloud cost optimization process should be evenly distributed between the finance department and cloud architects or developers. Confronting conversations can be easily mitigated when both parties have sufficient information on costs. For this purpose, all of them need the right tool.
Binadox has features allowing financial and tech teams to have a deeper look into cloud costs and the consumption rates of the company’s cloud resources and services.