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Adopting FinOps Project Details

We've provided this starter guide to help you build a presentation to inform other teams, teammates, and stakeholders about the benefits of building a FinOps practice. It includes preparation steps, accountability and expectations per role and persona, a detailed roadmap, and more.

It was created by the the Adopting FinOps working group aiming to be an evolving set of materials aiming to provide practical guidance, education and enablement that helps organizations of all sizes and cloud maturity adopt FinOps as the standard for Cloud Financial Management.

This project is currently a release candidate undergoing a TAC vote on 26 October 2021.

Resources

How to Jump Start FinOps in your Organization

One of the biggest challenges in starting a FinOps practice is getting broad executive support and buy-in to dedicate the time and resources needed for the cultural change. We see FinOps as the key to unlocking the promise of Cloud Computing and envision a world where efficient, profitable and cost effective cloud systems are made possible by the collaboration of finance, engineering and executive leadership through the FinOps Framework. However without proper organizational support from both the technical and financial leadership of the company, nascent FinOps practices often get stuck in a reactive Walk-stage maturity battling other priorities in the organization.

The FinOps Driver: the first steps

A key role toward building FinOps adoption is the Driver. We’ve outlined key personas to inform and milestones to accomplish as they help build the practice and culture at their organization.

An example roadmap to follow An example roadmap to follow

Stage 1 - Planning for FinOps in an Organization (Laying the groundwork)

Do your research

Seek out the right stakeholders within the organization. As an individual looking to bring FinOps to your organization, you will need senior level sponsorship as well as cultivated supporters to build momentum.

  • Research your possible Advocate/Champion/Executive Sponsor, and have one-on-one conversations with each of them using a customized FinOps introduction deck or initial interview questions to determine adoption strategy.
  • Research pain points being experienced by the organization during your conversations, such as cloud costs breaking business cases, general perception of cost overruns, lack of cost visibility by cloud consumers, etc.
  • Research impacted groups, teams, and individuals during your conversations. Who is affected by the pain points.

Create a plan

Paint the future-state. This should appeal to the business (valuation of technology like cloud, unit economics, etc.)

  • The “What is FinOps Pitch Deck” (available in the top section) is a good starting point for this plan, but must be customized for the organization, the pain points, the org, the culture, etc.
  • Identify tool requirements. Determine if existing owned tools can fill the needs of the plan
  • Identify an organizational “home” for the FinOps function. This may be in a CCoE, in finance, or in IT. Depending on the complexity of the organization structure, creating a dedicated FinOps team might take a phased approach. Some organizations might (1) set up a cross-functional transformation program office and create workstreams / working groups, (2) create a FinOps function as part of the extended Cloud Business Office / Cloud CoE, and (3) evolve into a dedicated Cloud FinOps Team
  • Identify candidate early-adopter teams
  • Identify KPIs that will be used to measure the FinOps function as well as ways to measure engagement and performance of stakeholders like business units and application teams. Note: These are preliminary and will evolve during Stage 2, but it’s important to have a starting set
  • Prepare communication plan that will be used in Stage 4

Bring cultivated supporters together and explain why it is important to adopt FinOps

  • Highlight current state, pain points, other issues
  • Identify threats and show scenarios that could happen if action is not taken
  • Demonstrate what Crawl, Walk, Run would look like for the organization
  • Examine opportunities that should be, or could be, exploited
  • Present the roadmap
    • Get feedback from the executive sponsor and adjust as needed
    • Including initial team size, budget, timeline for initialization
    • Value proposition (e.g. ROI such as the cost of having a FinOps function vs. an ongoing reasonable cloud overspend)
  • Present to other stakeholders, supporters, and a pilot set of new people such as business unit leads

Perform Initial resourcing

  • Request support from Sponsor to recruit other executive leaders as sponsors
  • Form a change coalition (true org. Influencers & stakeholders)
  • Get budget approval, headcount
  • Procure new tool (if appropriate at this stage of the roadmap)

Stage 2 - Socializing FinOps for adoption in an organization

How key stakeholders promote FinOps in the organization:

  • Communicate the values that are central to the change
  • Share a short summary of what you “see” the future organization to look like
  • Share high-level roadmap

Create FinOps conversations with identified impacted teams, such as Finance lead(s), product lead(s) and lead engineer(s) to:

  • Provide an understanding of what FinOps is.
  • Understand their issues and explain/educate on how FinOps could help them.
  • Discuss proposed KPIs and adjust per conversation feedback
  • Establish interaction model between FinOps and key partners (IT domains; Controllers; App Teams)
  • Identify future members during socialization for CCoE and Executive SteerCo.

Define initial FinOps Model (Resources, Operating Model, Cross-Functional Interaction, etc…):

  • Customize FinOps Model (Inform, Optimize and Operate) to the organization.
  • Identify the FinOps team with internal transfers where there is overlap with existing roles or individuals; fill remaining gaps via recruiting / contracting
  • Map the change network for FinOps across the organisation - sponsors, influencers, adopters. Create a clear training and communications strategy that a SteerCo is bought in to, that ensures full coverage of all impacted resources.
  • If the organisation is huge to reduce dependency on the central team, one scaling approach is to create a hub-and-spoke change management roll-out model.
  • KPI Roadmap: Finalize first-set of KPIs and reports, and identify and plan for next-gen KPIs and reports

Stage 3 - Preparing the organization for FinOps

Assess FinOps Readiness:

  • Define tags, metadata, and organizational taxonomy
  • Deploy, configure, and smoke-test tool(s)
  • Finalize the first wave of KPIs. KPI’s/Business adoption metrics can evolve over ‘adoption periods’ to create a ‘crawl, walk, run’ mentality and not push full maturity in one go. This will allow for less mature teams and executives to not be ‘scared off’ and do it step by step.
  • Define usage and spend thresholds for alerts and report limits
  • Define and prepare persona-based self-service dashboards. These should show important metrics like the first wave of KPIs, cost allocation, budget anomalies, optimization recommendations, and other views of interest to stakeholders
  • Prepare forecasting model with unit cost calculations included. At this point, this is likely just a spreadsheet.

Engage stakeholders:

  • Determine business unit appetite for commitment levels (total cost for enterprise discount negotiations, RI/Savings Plan/CUD/etc.)
  • Engage early adopter team to get optimization wins (e.g. shutting down test environments or instances who are no longer in use to show material savings). These are important for socializing, rolling out, and winning addition adoption later
  • Get some additional early governance wins for getting FinOps implemented (e.g. tagging policy, lease-to-live automation, etc.)
  • Start cadence of regular meetings. FinOps/CCOE team should be talking on a regular basis with the business units, app teams, practitioners and stakeholders to implement best practices and track KPIs.

Remember that if the organization has multiple business units operating from a federated cloud operating model they will have differing levels of maturity. It is important that the change management considers this and allows them to adopt at differing paces.

More to come

The Working Group continues to refine these Driver milestones. If you’d like to get involved, get in touch or submit a change via GiHub. You can also learn more about our Contribution Guidelines.

Personas

When proposing the adoption of a FinOps function within an organization, there will be a need to brief a variety of personas among the executive team to gain approval, buy-in, and involvement in conducting FinOps and achieving its goals.

Key personas that the Driver must inform Key personas that the Driver must inform

Each Executive team persona is described below, in terms of their goals, concerns, key messaging and useful KPIs. By understanding the motivations of each executive persona, a FinOps champion will be able to describe the value of FinOps more effectively, minimizing the time and effort to gain alignment.

For a more comprehensive look at various personas and roles involved in building a FinOps practice, please see our Personas section.

Accountability and expectations by team (RACI / DACI modeling)

Setting expectations and managing accountability across various teams and roles is key to building a long-lasting FinOps practice and culture. Using a combination of RACI (Responsible, Accountable, Consulted, Informed) and DACI (Driver, Approver, Contributor, Informed) models, we can begin to map core FinOps principles to teams and better indicate their level of involvement.

As cloud technologies and cloud cost management methods change, these various roles and their accountability could shift, too. If you see something you don’t agree with, or think needs more context, feel free to contribute to these tables.

FinOps Team App Teams IT Domains Finance Sourcing Business
Establishing cloud cost control guardrails A I C C - -
Cloud cost tagging standards & compliance A R C R C -
Cloud cost allocations keys A R C R - -
Synchronizing actual & planned cloud spend with official budgets & plans A I C - R C
Helping Application teams identify work-load level cost efficiency targets A R I - - C
Workload-level cost efficiency realization C A I - - C
Optimize enterprise-level costs through right-sizing; resource decom; etc A R C I - -
Lead buying strategy to capture savings via reserved instances; VM spot pricing; etc. A C C - R C
IT Planning, forecasting & budgeting C R A R - C
Bottom-up planning & forecasting C R A R - C
Business Unit Economics C R A R - A