Finance
Primary Goal: Accurately budget, forecast, and report technology costs.
Finance teams work closely with FinOps practitioners to understand technology cost data so that they can support accurate forecasting models, financial plans and budgets. Finance will also be a key participant in FinOps reporting, showback, chargeback, commitment purchasing, and invoice management with technology vendors
Finance roles typically report to an organization’s CFO, including Corporate Finance, Strategic Planners, Financial Analysts (F&PA), Budget Analysts, Financial Business Managers / Advisors, General Ledger, and Accounting. In some organizations, the Finance Persona may also include IT Financial Management (ITFM) duties if they are the primary Finance persona working with Engineering teams, or they may be represented by an ITFM Persona who reports to the CIO or CTO in larger organizations.
Objectives
- Clearly quantified value from technology spend
- Effective Budget Management
- Accurate technology forecasts
- Accurate and clear categorization of costs and trends
- Normalized spend predictability
- Consistent financial reporting across all technology categories
Challenges
- Increasing percentage of technology spend is consumption-based and less predictable
- Lack of consistency in how different technology categories report and allocate costs
- Challenges with legacy finance models (cap-ex vs op-ex)
- Loss of control when technology procurement and use is distributed and unlimited by capital expenditures
Key Metrics
- Revenue Performance
- Product Margins
- COGS (Cost of Goods Sold)
- Unit Cost Economics
- Budget and forecast transparency and accuracy
- Policy and regulatory compliance
FinOps Benefits
- Categorize costs consistently and identify unallocated spend
- Facilitate showback/chargebacks to increase financial accountability
- Drive budget and forecast accuracy
- Guide team to make good technology investments and tradeoffs between technology categories
FinOps Finance Persona typical roles:
- Finance Analyst / Business Analyst
These roles bring analytical skills and financial acumen, essential for FinOps. They understand budgeting, forecasting, and reporting. Often referred to as FP&A. - IT Financial Management (ITFM) Analyst/Manager
In organizations where there is not a separate ITFM function reporting to the CIO, the ITFM role will be filled by the Finance Persona. ITFM professionals are already concerned with the gathering, categorizing and analysis of IT costs for accounting and Total Cost of Ownership (TCO)/Return on Investment (ROI) analyses, making FinOps a close adjacent field.
