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Cloud FinOps

What is Cloud FinOps?

Cloud FinOps is a collaborative set of practices designed to help organizations get the most value out of their cloud investments. Different teams across the organization, including IT, finance, and end-users, are involved in the FinOps process.


When done effectively, Cloud FinOps can optimize cloud costs, manage cloud risk, and drive business value, while keeping governance and compliance in consideration.

How Does Cloud FindOps Work?

Teams are brought together to engage in a continuous Cloud FinOps process that includes planning, forecasting, cloud monitoring, optimizing, and reporting followed by iterating and improving as needed. The goal is to understand the current cloud costs, where opportunities to save exist, and how cost-saving measures can be implemented.

First, teams work to understand every cloud cost the organization has, which depends on complete visibility and correct attribution of costs to the appropriate business units. During the beginning phases, businesses may benchmark, forecast costs, and budget for future cloud plans. This phase can also include an examination of what cloud costs truly contribute by adding value to the organization.

Once everyone understands the business objectives and value provided by various cloud costs, resources need to be analyzed and then optimized. This is when the business will remove or reduce unnecessary cloud costs, work to “rightsize” the services they’re using, and work to make the most of what they choose to keep.

After efficiencies are found through the Cloud FinOps practice, the organization needs to document best practices to create guidelines for future growth, keeping goals for finance, business, and technology in mind. These three steps - observation, optimization, and documentation - should be revisited regularly.

Why is Cloud FinOps Important?

Cloud FinOps is important for a few reasons. First, it gets different departments from the organization on the same page. Ensuring different voices are heard means you reduce your risk of eliminating necessary resources that are important to a team that might not otherwise get a seat at the table. When done collaboratively, Cloud FinOps can help organizations get value out of their cloud investments. It’s also a valuable process to use to set standards for the business moving forward.

What are the Cloud FinOps Principles & Framework?

While organizations will need to establish their own standards and processes around Cloud FinOps, the process abides by general principles and has a basic framework that can be applied to any business.


The principles of Cloud FinOps are:

  • Collaboration: Teams need to work together to get the most out of the cloud. This means that finance, IT, compliance, and operations departments, among others, need to align, prioritizing innovation and efficiencies with cloud resources. Additionally, it’s important to keep representatives from cloud service providers in the loop.
  • Shared responsibility: Everyone is responsible for their own cloud usage. When budgets are allocated to teams, this gives the teams the empowerment to manage their own cloud usage, reducing the strain on IT and improving understanding of what’s driving costs across the organization.
  • Data accessibility: In order to make meaningful decisions about cloud usage, all teams involved need timely access to their data, ideally in real time. Benchmarking should be done with this data to evaluate teams and compare organizations to industry peers.
  • Centralized team: While members of the centralized FinOps team work together to achieve cloud cost optimization, individual teams are also responsible for their part in abiding by established policies and practices. The centralized team establishes the best practices, leaving the individual teams to monitor their usage and take part in shared accountability.
  • Business value: The business value of the cloud should drive the decisions of the Cloud FinOps team. Cloud should drive innovation at the organization, and cost should be weighed alongside speed and quality.
  • Continuous improvement: Cloud FinOps is not a one-and-done operation. It needs to work as an ongoing process, where teams monitor their costs and usage, adjusting as needed, while also seeing the variable costs associated with the cloud as an opportunity to optimize.


To implement Cloud FinOps, organizations need to do the following:

  • Look at the current state of cloud: What do current cloud costs, contracts, and usage look like? How is cloud being managed by the organization?
  • Establish goals: What are your overall business goals, and how can your goals for Cloud FinOps work alongside these goals?
  • Make a plan: Create a timeline for implementing Cloud FinOps processes, including budget, timeline, and necessary resources.
  • Plan implementation: Take what was established in the plan and implement the tools and processes to achieve the plan. Train staff along the way on new processes and best practices.
  • Monitor progress: Keep an eye on how things progress to more quickly identify areas to fix or opportunities for improvement.
  • Commit to continuous improvement: The cycle should start over from here, revisiting the state of the cloud, establishing new goals, and carrying out plans that will further optimize costs.

What is CloudOps vs. FinOps?

CloudOps looks at how the cloud is being managed, including how resources are being managed and provisioned. FinOps is focused on the financial pieces involved in cloud management, such as budgeting for cloud costs and forecasting future cloud spend.

Ensuring resources are being used effectively and efficiently goes hand-in-hand with looking to minimize spend and maximize value of the cloud. So, when managing cloud costs, organizations would benefit from both CloudOps and FinOps.

What is the Cloud FinOps Maturity Model?

The Cloud FinOps maturity model is used to determine what stage an organization is at in their Cloud FinOps journey. It can also help a business decide where to go next. The maturity model is broken into five stages:

  • Ad hoc: No policies have been established around cloud costs, and there may even be no understanding of the costs associated with the cloud services being used.
  • Basic: At this stage, a business may have taken some steps to manage cloud costs, and there may be some established policies and guidelines in place.
  • Defined: Organizations in the defined stage have a process of managing cloud costs, as well as detailed procedures and policies to help communicate how they are working to manage costs.
  • Optimized: Using the policies and procedures in place, optimized businesses are always looking for ways to reduce their cloud costs.
  • Sustained: For sustained organizations, FinOps is a part of their framework. A dedicated FinOps team works on optimization and they are striving for constant improvement.

Does TierPoint Offer Cloud FinOps Services?

While a Cloud FinOps team should be part of your organization’s internal culture, TierPoint offers services to help businesses achieve cloud cost optimization. We can help monitor and optimize cloud resources and costs, provide reporting and recommendations on how to lower cloud expenses, and offer IT Consulting Services to help you get your Cloud FinOps processes up and running.

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