Benchmarking

Framework / Domains / Quantify Business Value / Benchmarking

Using efficiency metrics to evaluate cloud optimization and value between parts of the organization or against industry peers to inform decision-making and align FinOps with business objectives.

Determine Organizational Benchmarks

Identify and document appropriate KPIs for benchmarking
Establish internal benchmarks between departments
Identify external benchmarks amongst industry peers

Definition

Benchmarking allows organizations to compare unit metrics and KPIs for important aspects of cloud value and optimization both internally between different teams, and externally with other organizations using cloud in similar ways.

FinOps teams should work with Leadership, Product, and Engineering personas to identify, or define unit metrics or KPIs that would provide insights into the organization’s cloud use by being benchmarked.

Internal benchmarking between different segments of the organization, or between product or engineering teams can assist in decision making related to cloud value and optimization. Internal benchmarking programs can be implemented with clear definition of benchmarked metrics, transparent communication of goals and objectives, accurate data collection and dashboarding, supportive management, and can be more effective with gamification or incentive programs to drive desired behavior.

Organizations can also perform benchmarking of their cloud metrics with other organizations. External benchmarking should be performed carefully so as to protect pricing or usage information which might be sensitive to share. Because many organizations are reluctant to share detailed information publicly, it can be difficult to implement external benchmarking in detail also. The FinOps Foundation community, including Enterprise Membership, can often provide opportunities to share information informally with similar organizations. State of FinOps data can provide useful insights into other FinOps practices. Analysts, large system integrators, and cloud service providers can sometimes also share aggregated or summary information on certain types of cloud usage.

Every organization’s cloud usage will be unique. Just as there is no perfect FinOps team size or structure, benchmarking should only be one activity for assessing an organization’s cloud value and efficiency. FinOps teams must balance this capability with other mechanisms of understanding cloud value, and enabling the organization’s leadership with an understanding of the cloud investment. As with many FinOps practices, perfect information is rarely available and successful organizations continuously review their benchmark KPIs, making decisions based on the information they have rather than waiting long periods for data to improve.

Maturity Assessment

Crawl

Broad organizational KPIs or very technical KPIs are identified as benchmarks
Key Internal teams are compared informally by the FinOps team

Walk

A variety of KPIs or unit metrics are identified as interesting to benchmark
Mechanisms exist to compare internal teams performance to one another
Teams self-serve information to compare their performance to others
FinOps and Leadership personas informally share selected benchmarking data externally

Run

A curated set of KPIs and unit metrics are identified and managed over time to benchmark at a variety of levels
Internal reporting of KPIs are provided consistently, teams self serve, incentives for good behavior are used
Organizations have established networks of external benchmarking contacts with whom they can explore and share best practices in cloud use and FinOps Practice
Organization participates in industry programs such as FinOps Foundation enterprise membership, FinOps Professional certification program, Working Groups and Special Interest Groups for mature FinOps practitioners

Functional Activities

FinOps Practitioner

As someone in the FinOps team role, I will…

Understand organizational cloud efficiency goals and work with other personas to translate these into KPIs and unit metrics to benchmark
Establish, communicate and manage benchmarking programs for internal teams

Product

As someone in a Product role, I will…

Understand organizational benchmarking goals and work to achieve them for my scope of responsibility
Contribute or report necessary benchmarking data

Finance

As someone in a Finance role, I will…

Understand organizational benchmarking goals and support their implementation

Engineering

As someone in an Engineering role, I will…

Understand organizational benchmarking goals and work to achieve them for my scope of responsibility
Contribute or report necessary benchmarking data

Leadership

As someone in a Leadership role, I will…

Set specific KPIs or unit metrics to benchmark
Support internal benchmarking efforts with all teams
Communicate with external organizations to benchmark externally

Allied Personas

As someone in an Allied Persona role, I will…

Provide examples of benchmarking available in related disciplines which might inform FinOps benchmarking

Measures of Success & KPIs

Sets of targeted and well-documented KPIs selected for benchmarking which inform decision making in meaningful ways
Important internal teams providing benchmark opportunities to identify good cloud use and FinOps practices across the organization
Leadership and FinOps teams can compare high level cloud performance with other external parties through appropriate channels and with appropriate data controls

Inputs & Outputs

Unit Economics – understand which KPIs will benefit decision making via benchmarking
Reporting & Analytics – to get dashboards and reporting to support internal benchmarking efforts
Points of comparison from external cloud using organizations

Filter:

Framework

Benchmarking

Definition