Borja Martinez
NTT Data
Who Should Read this Paper
This paper is a resource designed for individuals who are looking for their organization to adopt FinOps. Use this paper for information on steps to take, who to involve, and guidance on adoption.
Introduction
Every organization has a unique FinOps adoption story, but generally adoption begins in one of three different ways:
- Leadership mandate – when an organizational leader instructs the organization to implement FinOps
- Grassroots adoption – informal, gradual, FinOps adoption rising through the ranks of the organization which later formalizes into a formal FinOps practice
- Individual initiative – when an individual(s) in the organization seeks approval from leadership to adopt FinOps through the formation of a FinOps team and FinOps practice
However it starts and regardless of the motivation to adopt FinOps, the journey never ends. As an organization’s cloud service provider (CSP), partners, org structure, external business environment, technology, and business units evolve, FinOps practices and the people who need to be involved need to change in response. This paper outlines an adoption journey which works whether you are an individual, a leader, or a grass roots team.
The below image describes the typical stages of initial FinOps adoption. You may not need to start at the very beginning, but the next sections will outline the goals and activities in each stage as a guide. Use the sections that make sense for your business as you work toward the launch of your FinOps practice, then periodically revisit the stages to bring new people and parts of your organization into the fold.
Prerequisites
To be successful in proposing FinOps adoption one should begin the journey with a basic understanding of:
- The public cloud, its benefits and challenges
- What FinOps Is
- The FinOps Framework
- Cloud cost and usage data (and have access to it)
- See also, FOCUS for data normalization
- Your organization’s cloud strategy, IT goals, and organizational structures
- The different cost models used for on premises data centers
Stage 1: Research
The research stage is about collecting the inputs for your FinOps adoption proposal. It is important to have a firm understanding of the current state of cloud spending and how related information is shared and used for decision making across the organization. Researching current cloud usage and having conversations with key stakeholders about usage, data availability, etc. will help to baseline where the organization is today (prior to FinOps) and start to build the use case for adopting FinOps.
As part of this stage:
- Gather a comprehensive picture of your cloud procurements and use. If you cannot identify all the contracts and ways you are purchasing cloud, or easily gather cloud cost and usage data for all of your relevant cloud use, this indicates even greater risk because inefficient use is likely to go undetected.
- Review the current cloud hierarchy and tagging data to determine if you have the appropriate level of visibility into cloud spend across the organization.
- Review current rates and spending trends. Identify rate optimization opportunities and know month over month spend total and how current spend trends track against forecasts and budgets.
- Analyze your cloud workloads usage patterns and identify possible efficiencies that can be implemented in the environment (terminating idle resources, power scheduling, rightsizing resources, etc.)
- Compute FinOps KPIs and other relevant metrics to help build the case for FinOps Adoption. Understanding where the organization is now and how FinOps can help bring them to the next level will help get buy-in from key stakeholders to help push the effort forward.
- Compare your organization against peers and benchmarks. This exercise levelsets adoption enabling organizations to start small, grow and scale accordingly. State of FinOps data is a good source to comparatively benchmark your company against.
- Investigate FinOps tooling and service providers and their relative costs. Consider the existing resources available to you and if procurement of additional resources is needed.
- Estimate funding needed to support FinOps human resourcing and training.
Use the information gathered to create a vision statement for FinOps adoption and outline the activities that occur, including rough timelines, to bring this vision to life.
Who to involve
Look consult with all core FinOps Personas to gather data, use cases, and information to leverage during the proposal. During these conversations identify current pain points and the impacted groups and describe how FinOps can provide relief. Additionally, identify individuals who are eager to support FinOps adoption as these supporters can help build momentum for organizational adoption and may serve as good candidates for formal or informal change coalitions and FinOps Champions. Finance and engineering are two key persona groups to engage with as you discuss their needs surrounding cloud & FinOps. See the Appendix for recommended questions to ask during the research stage.
Stage 2: Propose
After evaluating the current state of public cloud consumption and arming yourself with the relevant data, examples, and drivers for adopting FinOps, the next step is to bring other members of your organization on board with implementing a FinOps practice. It’s important to convince key stakeholders that adopting FinOps is a worthy investment of resources, aligns to organizational strategic goals, and is critical to enabling success.
Clarify the Call to Action
It is important to clarify what it is you are asking for. Depending on the size of the organization, it might be difficult to get buy-in for wide scale adoption without some initial data to show progress and impact. It could be beneficial to pilot FinOps in a smaller segment of the organization to build the foundation of FinOps capabilities by defining the operating model, establishing guardrails and guidance to control spend, determining key measures of success, etc. to demonstrate success on a small scale before proposing a wider adoption.
Alternatively, the call to action of your proposal could be for approval of full, organization-wide adoption. In either case, collecting quick wins will help you build momentum and make it easier to convince other stakeholders across the organization to join in on this effort. Be clear in your delivery of what you are needing. The below list provides examples of what may be included in your ask.
- Agreement/approval
- Funds (for training, tooling, etc.)
- Dedicated human resources (headcount adds, service providers)
- Support by way of messaging or sponsorship (announcing support of FinOps adoption, setting expectations, etc.)
Know your Audience – Who to involve
During the proposal stage, it is likely for individuals to propose FinOps adoption to several different people and oftentimes this means not a single presentation, but several presentations each tailored to the particular FinOps Persona(s) you are persuading. Seek out the right stakeholders within the organization. You are likely to need senior level sponsorship as well as cultivated supporters to build momentum. Therefore you might find it necessary to propose FinOps adoption in a more informal manner to certain stakeholders and again more formally to others. Each persona group has different interests and motivations in FinOps which are described in detail at the links below. Leverage these general perspectives with what you already know about your audience to create a custom, engaging proposal for FinOps adoption – doing so will help maximize the chances of (and minimize the time and effort to) gain alignment on FinOps adoption.
Most notably of all personas is the leadership group as many organizations require senior leadership approval when standing up new practice areas. Additionally, you may consider including individuals in the organization who are advocates of FinOps adoption (you may have encountered these folks during stage 1) in the proposal conversations for additional support and sway.
Define the Opportunity
As part of your proposal, paint a picture of (1) the current state (2) a roadmap of FinOps activity and (3) an appealing future state with FinOps. It’s important to detail how implementing a FinOps practice helps the organization to meet their objectives. The below table provides additional context in each of these areas.
| The Current State | Roadmap of Activities | The Future State |
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| For those looking to use slides for the presentation of their proposal, the Adopting FinOps Pitch Deck is available for use and additional customization. |
Decisioning
Immediately following your pitch (or shortly thereafter) you will know if the individual(s) have agreed to your proposal or an altered version of your proposal. If yes, it’s time to proceed with beginning to execute against your vision and move on to the subsequent stages of FinOps adoption.
If your proposal was not accepted to move forward, you may need to go back to the drawing board and conduct more research, reposition your arguments for adopting FinOps, reach out to other individuals to join your coalition of support for FinOps, pitch to a different person(s), simply wait and try again at a later time.
Keeping the Proposal Going
Although the act of proposing FinOps itself may be complete, it is a good idea to continuously reinforce your proposal as you progress through the future stages of the adoption journey. This could mean making a monthly chart or tracking a KPI that shows the success of FinOps activities over time. Stakeholders will need some assurances of the value and benefits derived from FinOps activities. You’ll need to sustain (ideally increase) the value derived from FinOps and make sure the value is known throughout the organization to keep the practice alive. Continue conversations on why it is important to adopt FInOps and request support from key stakeholders.
Helpful tips:
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Stage 3: Prepare (to execute against approved proposal)
The acceptance of your proposal to adopt FinOps means you can now develop a plan to execute the approved roadmap of activities. This stage is focused on preparing to execute against those approved plans. For example, if your approved roadmap included establishing a cloud cost management routine with senior leadership you would now look to:
- Select a date/time for the monthly cadence with senior leadership
- Outline the content to share at the meetings
- Determine where & how to source that information
- Identify individuals to invite to the meeting… etc.
In short, during this stage, you are designing FinOps operations and preparing for the formal launch of the practice all whilst aligning operations to the specific needs of an organization. There is much to be done during this stage. The content that follows offers suggestions on where to start your FinOps journey based on the collective experiences of the FinOps Foundation community who have driven and participated in FinOps adoption journeys. Yet as with anything, efforts should be directed toward the areas with urgent needs.
Define FinOps Team & Team Roles
The cornerstone of your FinOps journey lies in the formation of a dedicated team equipped with the expertise and capabilities to drive transformative change. Identify an organizational “home” for the FinOps function and determine how many people and which type of roles the team will be composed of. Determine which roles will be filled by existing individuals/internal transfers, new hires, etc. Integration with the Cloud Center of Excellence or similar internal functions can be helpful. The Cloud FinOps book, FinOps Services, FinOps Champion Programs, and other resources which may be helpful in designing, building, and supplementing FinOps teams.
You may also want to define the responsibilities of each role at this stage. Whether starting with a single dedicated individual or a multifaceted team, it’s essential to prioritize tasks and capabilities to maximize efficiency. Building a FinOps team is part of the FinOps Practice Operations capability.
Develop Processes for Executing Capabilities
With nearly two dozen capabilities to navigate, the development of robust execution plans is paramount. For those just starting their FinOps journey it is recommended to prioritize a handful of capabilities to work on first and slowly expand FinOps operations to other capabilities. Discoveries made during the research stage will help to prioritize the order in which to implement the capabilities. As part of developing processes for executing capabilities organizations may be identifying Key Performance Indicators (KPIs), creating workflows & templates, preparing tools, defining communication plans, establishing interaction models, etc. The below are some of the first capabilities developing FinOps practices typically direct their efforts towards.
Data ingestion, Allocation, & Reporting: Cost visibility enables so many other FinOps capabilities that it is often one of the first items tackled by sprouting FinOps practices. Accurately described, comprehensive, cloud cost and usage data must be made available to teams to enable informed decision making. Additionally, success in these capabilities lay the foundation for success with invoicing & chargeback efforts.
Forecasting & Budgeting: For many organizations, exceeding budgets and having a poor understanding of anticipated spend is a main driver for the adoption of FinOps. Therefore, forecasting & budgeting capabilities are often prioritized as some of the first capabilities to adopt so that cloud expenditures can be proactively managed. Organizations may also look to establish some form of anomaly management to compliment the forecasting & budgeting efforts.
Workload Optimization & Rate Optimization: Optimization efforts drive cost reductions, providing tangible benefits and fostering momentum for broader FinOps adoption. As is the case for organizations with exploding cloud bills, decreasing monthly charges incurred is an important and urgent need.
Education Enablement: As organizations embark on their FinOps journey, developing a comprehensive training plan to equip team members with the necessary skills and expertise to navigate the complexities of maximizing the business value of cloud is a top priority. This applies to both members of the internal FinOps team and other organizational personas that will be involved in FinOps activities. Leverage training events (such as FinHacks and Lunch & Learns), written publications (such as FinOps Friday Blogs and internal knowledge base repositories), formal organizational training (such as those delivered through internal HR systems), CSP training, and FinOps Foundation training and certification opportunities.
FinOps Tools & Services: Access to accurate data and powerful tools is the lifeblood of effective FinOps management. Prioritize having meaningful, valuable, tools available for use and putting the relevant data in the path of the relevant stakeholders through the use of the selected toolsets. This empowers teams to succeed in their efforts to drive meaningful business outcomes. Whether leveraging SaaS products or developing custom solutions, organizations should prioritize solutions that align with their unique needs and objectives.
Collaborate & Align Goals
FinOps requires collaboration from all key stakeholders. During this stage, teams should be working together to align goals, establish regular update cadence and mode for interaction. Develop feedback loops between the key stakeholders as you prepare to launch and iterate through the development of your FinOps practice and then carry this habit forward through and beyond launch to maintain strong collaboration as you iterate through maturing FinOps practices over time. Determine the mechanisms and spaces through which to facilitate the feedback loop such as regular meeting cadences, Cloud Center of Excellence participation, reporting, etc.
Who to involve
As you prepare your reports, routines, etc. it is important to set expectations and manage accountability across various teams. Any core or allied persona may be involved during this stage, although dependent on the specific activity as some personas may not need to be involved in certain areas. Engineering and finance are the key personas groups which were consulted during the research stage where the adoption roadmap was formed and likewise are key persona groups to engage and collaborate with in preparation to launch FinOps.
By defining the FinOps team structure, developing robust execution processes, aligning goals, and establishing collaborative interaction patterns organizations can position themselves for a seamless transition to doing FinOps.
Helpful tips:
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Stage 4: Launch
The launch stage is when you officially kick off the FinOps practice and begin implementing the designed processes, tools, and policies. At its core, this milestone marks the beginning of normal and ongoing FinOps operations. At launch there are a variety of activities that you may opt to deploy either as a part of the initial launch or as a part of an ongoing program such as:
- Announce the establishment of FinOps practice and adoption activities
- Conduct training and share FinOps knowledge base documentation (if not already completed pre-launch) for team members and stakeholders to familiarize them with the new tools, processes, and policies.
- Execute easy wins and share the success with the broader organization
- Launch a win wall
- Rollout tooling
- Distribute FinOps reports and empower users to make their own
- Start hosting & attending routine meetings (monthly cloud cost update call, CCoE, business unit meetings, etc.)
- Perform FinOps Capabilities (such as forecasting, budgeting, usage optimization, rate optimization, etc.)
- Leverage feedback from teams to improve operations
Who to involve
During the launch stage, the FinOps practitioner and driver of FinOps adoption should stay in close communication with leadership on the plan and progress of adoption. All personas are involved in doing FinOps, therefore all are also involved in this stage and beyond. The FinOps team and core personas will be working in concert to maximize the value of in accordance to the roles and responsibilities they defined in the prior stage.
Having defined interaction models can help clarify roles and responsibilities. RACI (Responsible, Accountable, Consulted, Informed) matrices are commonly used by organizations to describe roles and responsibilities. The appendix features an summarized, example RACI which for reference if needed.
Launch Tip:
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A successful launch does not guarantee future FinOps success. FinOps success comes from a sustained focus on adhering to the FinOps principles, following the FinOps phases, and improving the capability maturity levels to meet the evolving needs of your organization.
As you operate your FinOps practice you need to regularly assess the practice to determine if more investment will increase value, to determine if your current capability list and targets are the right ones for your organization, and be mindful of when you may need to walk through a new proposal for your FinOps practice development. The FinOps adoption journey is one you may travel many times over as FinOps spreads across the organization, as acquisitions occur, etc.
FinOps is a continuous and iterative process. Embrace the challenges and opportunities ahead. We wish you success in your journey.
Appendix
Stage 1 Persona Questions
During the Research stage, the FinOps Practitioner will consult with all core FinOps Personas to gather data, use cases, and information for use during Stage 2 – Propose. Below are recommended questions to ask during the research stage to better inform the pitch(es) conducted in Stage 2.
Engineering
The Engineering Team will be the most intimately aware of current cloud infrastructure and may be able to provide details on how the cloud environment is managed, as well as opportunities to improve efficiency. A few questions to ask engineers during the Research Stage include:
- How is cloud use monitored?
- What are the highest consuming workloads?
- Are any cloud optimization processes applied during application/system migration? Or, is “lift and shift” predominately used?
- Are they monitoring for anomalies? If yes, how are anomalies identified and mitigated?
- Are they consulted during cloud budget formation or execution?
- Do they have any recommendations for optimizing cloud workloads?
Product Owner(s)
Product Owners are likely to be highly incentivised to adopt FinOps as good business practice. An optimized cloud environment should result in their ability to deliver products more efficiently and cost effectively. Good questions to ask Product Owners during the Research Stage are:
- Why did the product get moved to the cloud?
- Are you receiving cloud consumption showback reports or being charged back for cloud use?
- Have the costs of compute and digital storage capabilities gone down since moving to the cloud?
Finance
Finance Teams may be aware of cloud cost fluctuations and challenges budgeting for cloud. During the Research Stage, these questions will provide more insight into finance-related FinOps opportunities:
- How are cloud invoices processed?
- What is the organization currently spending on cloud monthly? Annually?
- How is cloud spending estimated and budgeted for?
- Who is consulted during cloud budget formulation?
- How are cloud costs allocated?
- Is showback or chargeback being used with organizational cloud consumers?
- Do you have any examples of unanticipated cloud cost spikes or substantial budget overruns?
Procurement
Procurement Teams are likely to be familiar with the details of cloud service contracts and have the most engagement with cloud vendors. These questions are helpful to ask during the Research Stage:
- Are CSPs contracted directly or through resellers?
- Are one or three-year commitments being used?
- Are any CSP discounted rates being applied (ex. Enterprise Discounts)?
- Are any Commitment Based Discounts (ex. Savings Plans or Reserved Instances) being used?
- How are CSP commitments scheduled/timed? Once a year? As needed?
Leadership
Senior leaders are able to provide insight into organizational priorities and identify desired key results. During the Research Stage, these questions should provide clarity on how to promote FinOps adoption as a driver of overall organizational success.
- What are the primary motivations for moving to the cloud?
- Do you have enough transparency into the organization’s cloud spending?
- What are the organization’s priorities for the next year? Three years?
- Where could potential cloud savings be redirected to improve organizational performance or key results?
Example RACI
The below RACI (Responsible, Accountable, Consulted, Informed) matrix maps FinOps capabilities across the core personas as a summarized example for you to consider as when designing and launching FinOps in your organization. Use the table below, or access a spreadsheet version of the table for reference.
| DOMAIN/CAPABILITY | Practitioner | Engineering | Product | Finance | Procurement | Leadership |
| Understanding Cost & Usage | ||||||
| Allocation: Assign cloud costs using tags, labels, and other metadata | A | R | C | C | – | I |
| Anomaly Management: Detect, identify, and manage unexpected cloud costs | A | R | C | C | I | I |
| Data Ingestion: Gather, transfer, process, transform, and correlate various datasets | R | C | C | I | I | I |
| Reporting & Analytics: Examine and showback cloud data to gain insights into cost and spend patterns | R | C | A | I | I | I |
| Quantify Business Value | ||||||
| Benchmarking: Compare unit metrics and KPIs for important aspects of cloud value and optimization | R | A | A | I | – | C |
| Budgeting: Set limits, monitor, and manage cloud spending aligned with business objectives | R | C | A | C | I | C |
| Forecasting: Create a model of the anticipated future cloud cost and value | R | C | A | C | I | C |
| Planning & Estimating: Estimate and explore potential cost and value of workloads | R | C | C | I | – | I |
| Unit Economics: Develop and track metrics that provide an understanding of how an organization’s cloud use impacts business value | R | C | A | I | I | A |
| Optimize Cloud Usage & Cost | ||||||
| Architecting for Cloud: Choose services based on operational requirements, sustainability, and financial viability of systems using cloud | C | R | I | I | – | I |
| Cloud Sustainability: Define how the organization will consider sustainability when making decisions about cloud use | R | C | A | I | I | A |
| Licensing & SaaS: Understand and optimize the impact of software licenses and SaaS investments | A | C | C | I | R | I |
| Rate Optimization: Lower the rate paid for cloud resources | A | C | C | C | R | I |
| Workload Optimization: Analyze and optimize cloud resources to match specific usage patterns | A | R | I | I | I | I |
| Manage the FinOps Practice | ||||||
| Cloud Policy & Governance: Establish and evolve policies, controls and governance mechanisms | R | C | C | I | I | A |
| FinOps Assessment: Measure FinOps team effectiveness, map FinOps activities against organizational goals, and identify areas to mature | R | C | C | C | C | C |
| FinOps Education & Enablement: Develop a common understanding of FinOps concepts, terminology, and practice | R | A | A | A | A | A |
| FinOps Practice Operations: Build and operate a FinOps practice within an organization | R | C | C | C | C | A |
| FinOps Tools & Services: Consider CSP and third-party FinOps software and/or services to deliver FinOps capabilities | R | C | I | C | C | I |
| Intersecting Disciplines: Coordinate with interconnected disciplines/ allied personas (ex. ITFM, ITAM, ITSM, Cybersecurity, Sustainability) | R | I | I | I | I | I |
| Invoicing & Chargeback: Manage cloud invoices and create chargeback procedures and mechanisms | R | I | C | A | A | I |
| Onboarding Workloads: Orchestrate system migration into or between cloud environments in a way that provides cost, usage, and impact transparency | A | R | C | I | I | I |
This RACI is not meant for organizational use in its entirety, but instead provided as a starting point to develop customized RACIs for each capability aligned to the developed processes and roles at individual organizations. As cloud technologies and cloud cost management methods change and your FinOps practice matures, RACI matrices may require revision to stay current with organizational procedures and any shifting of responsibility.
Training Resources
Acknowledgments
We’d like to thank the following people for their work on updating this Paper:
A special thank you to the contributors to the original version of our Adopting FinOps asset: Anderson Oliviera, Mike Eisenstein, Anthony “TJ” Johnson, Tracy Roesler, Bailey Caldwell, Erik Peterson, Kim Wier, Melvin Brown, Ashley Hromatko, Idaliz Baez, Rejane Leite, Rich Gibbons, Nick Grab, Mandy van Os, Bhups Hirani, and Mike Bradbury.
FinOps Practice Operations 
FinOps Education & Enablement