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FinOps Principles

FinOps Principles

Framework Overview / FinOps Principles

FinOps Principles act as a north star, guiding the activities of our FinOps practice.

These principles are in no particular order, and they are each important to FinOps success. We encourage members to understand and practice all of these principles.

Teams need to collaborate
  • Finance, technology, product, and leaders work together to manage each technology category at the speed and granularity each requires.
  • Coordination from executives to engineers, and across all Personas ensures everyone is focused on the most valuable strategic goals.
  • Teams work together to continuously improve for efficiency and innovation.
Business value drives technology decisions
  • Unit economic and value-based metrics demonstrate business impact better than just aggregate or categorized spend.
  • Make conscious trade-off decisions among cost, quality, and speed.
  • Use the strengths of each technology category to derive value and support innovation.
  • Differentiate with FinOps Scopes to target the business value of specific organizational goals.
Everyone takes ownership for their technology usage
  • Accountability of usage and cost is pushed to the edge, with engineers taking ownership of costs from architecture design to ongoing operations.
  • Individual feature and product teams are empowered to manage their own mix of technology usage against budgets they help control.
  • Decentralize the decision making around cost-effective architecture, resource usage, and optimization.
  • Technical teams must consider cost as a first class metric from the beginning of the software development lifecycle.
FinOps data should be accessible, timely, and accurate
  • Process and share cost data as soon as it becomes available.
  • Real-time visibility autonomously drives better technology utilization.
  • Fast feedback loops result in more efficient behavior.
  • Consistent visibility into technology spend is provided to all levels of the organization.
  • Create, monitor, and improve real-time financial forecasting and planning.
  • Trending and variance analysis helps explain cost trends.
  • Internal team benchmarking drives best practices and celebrates wins.
  • Use FOCUS and other methods to continuously improve normalization, accuracy and consistency in data across technology categories.
FinOps should be enabled centrally
  • A centralized FinOps function encourages, evangelizes, and enables best practices in a shared accountability model.
  • Executive level communication and business and technology strategies alignment is better enabled through a central team or function.
  • Rate, commitment, and discount optimization are best centralized to take advantage of economies of scale and allows Engineers to stay focused on optimizing their usage.
Take advantage of the variable cost model of the cloud.
  • Each technology category — public cloud, data center, SaaS, Licenses, Data Cloud Platforms, etc. — entails cost models that have pros and cons for any business.
  • An increasing amount of every technology category is becoming consumption-based, granular, and more variable. Use lessons learned in managing cloud in other categories.
  • The variable cost model of the cloud, the fixed cost model of the data center, or other models present opportunities to deliver more value.
  • Make technology decisions based not only on technical requirements, but also these cost model considerations.
  • Embrace just-in-time prediction, planning, and purchasing of capacity wherever valuable to reduce overall waste.
  • Agile iterative planning is preferred over static long-term planning in an increasing percentage of the technology estate.
  • Shift to more proactive system architecture and design with continuous adjustments over infrequent reactive cleanups.

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