We’ve been saying it for years, the benefits and potential of the cloud abound.
And yet, more than 80% of respondents in a survey of 753 business leaders point to managing cloud spend as their top organizational challenge, and these same respondents estimate that nearly 1/3 of their cloud spend is inefficient or wasted (Flexera, 2023). Many organizations are new to optimizing cloud costs and ensuring resources are used efficiently.
As your organization digitally transforms you may be realizing what other organizations are realizing too: When it comes to business value, simply migrating to the cloud isn’t enough. Achieving the full benefits of cloud requires fundamental changes to both mindset and behaviors around existing financial-management practices. It requires changing the way your disparate teams work together.
Enter the Cloud FinOps Building Blocks
![1 Cloud FinOps Building Blocks.jpg](https://storage.googleapis.com/gweb-cloudblog-publish/images/1_Cloud_FinOps_Building_Blocks.max-1000x1000.jpg)
Cloud FinOps is a framework, discipline, and cultural shift combining people, processes, and technology to drive financial awareness and accountability. FinOps practices align engineering, finance, technology and business leaders and teams under a primary objective: to maximize business value from the cloud. With Cloud FinOps practices, every business stakeholder is charged not only to take responsibility for their spending and costs, but also to optimize them. These practices enable businesses to manage consumption and make sound, data-informed cloud-spend decisions. Cloud FinOps is comprised of five building blocks:
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Accountability and enablement
Establishing governance and policies to manage cloud spend and realize business value. -
Measurement and realization
Driving financial accountability and value realization with a defined set of KPIs and success metrics. -
Cost optimization
Providing financial visibility and recommendations of IT resource usage to optimize cloud spend. -
Planning and forecasting
Modernizing budgeting, forecasting, and chargeback methods to allow for iterative, innovative and cost effective development practices. -
Tools and accelerators
Deploying and integrating a set of cloud cost tooling to effectively manage and track cloud spend. Learn more here.
For a general overview of the Cloud FinOps framework and more on the five building blocks, check out these resources:
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Video | What is FinOps and 3 reasons why you should care about it.
This 5-minute video provides an overview of FinOps, the 5 building blocks, and how they can benefit your organization. -
Podcast | FinOps with Joe Daly
In this podcast, Joe Daly of the FinOps Foundation shares about the key principles of FinOps, which he refers to as financial DevOps. Daly discusses how this framework is helping companies make better and more efficient financial decisions while taking advantage of the cloud. -
Blog | Decoding Cloud FinOps to accelerate digital transformation
This blogpost discusses the critical role of FinOps in a successful digital transformation. It outlines key metrics to help measure and track business value and to increase visibility into the effects of digital transformation on top-line revenue.
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Article | Cloud FinOps: The secret to unlocking the economic potential of public cloud
This Forbes article profiles OpenX, the first major advertising exchange platform to migrate entirely to the cloud. It details the 5 key pillars of the Cloud FinOps framework, which OpenX leveraged in their digital transformation strategy. In just 9 months, they reduced their per-unit costs by more than 60%.
Importantly, Cloud FinOps isn’t about saving money; it’s about making money. It’s about promoting a cost-conscious culture, financial accountability, and business agility in the cloud. Whatever stage of the cloud journey you’re at, cloud FinOps practices will help you get the most value out of Google Cloud. This framework can help to remove blockers, implement the building blocks, and empower your teams to make better business decisions.
The Cloud FinOps Journey
Implementing Cloud FinOps is neither a destination nor a box your organization will check then archive. Rather, Cloud FinOps is an ongoing journey and discipline. It’s inherently iterative. As such, growth and maturity across processes, capabilities, and domains requires action, repetition, and continuous learning.
Across the five FinOps building blocks, we’ve identified 50 subprocesses to best understand organizations’ FinOps proficiency, capabilities, practice domains, and blind spots. We scale them from 1 to 5 and categorize them in one of three phases of maturity: Crawl, Walk, or Run. Organizations in the Crawl phase tend to focus on technical problem solving and cloud-cost visibility. Organizations in the Walk phase emphasize strategic improvements such as employing cost visibility dashboards to realize better business value. And organizations in the Run phase are focused primarily on transformational change and strategic innovation, factoring cost considerations into both processes and cloud architecture.
Through this “crawl, walk, run” maturity model, we can evaluate proficiency, establish a benchmark, and recommend a targeted action plan for FinOps adoption. And whatever your level of maturity, your organization can take quick scalable action not only to foster improvement but also to evaluate outcomes and gain insights.
The key here is that regardless of your organization’s Cloud FinOps maturity level, you can take small steps now toward continuous improvement. Here are some common focus areas and several more resources organized by maturity level that you can access.
![2 Cloud FinOps Building Blocks.png](https://storage.googleapis.com/gweb-cloudblog-publish/images/2_Cloud_FinOps_Building_Blocks.max-1000x1000.png)
Crawl phase
Improve cloud-cost visibility.
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Whitepaper | Drive Cloud FinOps at scale with Google Cloud Tagging
Tags and labels can be useful and flexible tools to help your organization segment cloud spend and allocate costs. This whitepaper introduces Google Cloud Tags and best practices for implementing them. It differentiates tags, which offer reliable reporting and governance features, from labels, which can be prone to problems, including poor coverage and a lack of integrity in data labeling. -
Whitepaper | Unlocking the value of Cloud FinOps with a new operating model
This white paper unpacks the details of the FinOps operating model, including roles, organizational alignment, and driving culture change. It details how to establish strong financial governance and a cost-conscious culture. -
Whitepaper | Cloud FinOps: Shared services cost allocation
In this whitepaper, you’ll explore the elements of cost allocation as well as the complexities and challenges associated with shared-services cost allocation. While some of these concepts and models are interchangeable between legacy and cloud environments, this whitepaper focuses primarily on cloud computing and associated services.
Walk phase
Improve business-value realization.
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Blog | 5 key metrics to measure Cloud FinOps impact in your organization in 2022 and beyond
To drive business growth and topline revenue, business leaders must be able to connect cloud investments to business outcomes. As such, traditional IT metrics and KPIs must continue to evolve. In this blogpost, we’ll explore five key business-value metrics aligned to the five Cloud FinOps building blocks. -
Whitepaper | Maximize business value with Cloud FinOps
The cloud introduces new complexity and challenges to traditional IT financial management. As such, it requires strategic financial governance, processes, and partnership across the organization. This whitepaper explains how Cloud FinOps helps enterprises that have invested in cloud to drive financial accountability and accelerate business value.
Run phase
Improve strategic cloud innovation.
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Whitepaper | Unit costing: The next frontier in cloud
In this whitepaper, you’ll explore the nature of and need for cloud unit costing, the standard by which FinOps practitioners obtain full business context for their cloud costs. It features examples from cloud-first organizations that have pioneered FinOps practices. Additionally, it examines several cloud forecasting and budgeting methods, ranging from least to most rigorous. -
Blog | You get what you pay for: Principles for designing a chargeback process
Chargeback, a crucial Cloud FinOps capability, is the process of mapping cloud consumption to internal users within an organization. It provides transparency, facilitates accountability, enables recovery of cloud costs, and fosters a culture of fiscal responsibility. This blogpost will walk you through some best practices in designing an effective chargeback process in Google Cloud.
Success with Cloud FinOps
As global markets continue to face challenges, there’s never been a better time to increase the return on your cloud investments. Adopting and implementing FinOps practices will help. For some real-world examples of how organizations across a range of FinOps maturity levels have collectively saved millions of dollars on their overall cloud spend, check out these customers’ stories.
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Video | Next 2022: Top 10 ways to lower your costs on Google Cloud with General Mills
In this video, which highlights ten leading cloud cost optimization practices, hear how General Mills, which is on pace to increase their cloud footprint by 60%, has approached the discipline of cost savings and accelerated their adoption of Cloud FinOps to drive waste out of their cloud usage. -
Video | How Nuro optimized their costs on Google Cloud
In this video, you’ll get an overview of the Google Cloud FinOps framework, a deep dive on cost-optimization best practices, and hear about how startup Nuro AI has adopted their own cost-savings discipline and Cloud FinOps practice. -
Video | How OpenX reduce per unit costs by 60%
In this video, you’ll learn how to establish a cost center of excellence within your cloud practice, explore several cost-optimization recommendations, and hear from OpenX about how they reduced their costs on Google Cloud. -
Case Study | How Sky saved millions with Google Cloud
In this case study, read how a few years into their cloud adoption journey, media and entertainment company, Sky Group discovered over $1.5 million in savings and optimized costs with BigQuery, Compute Engine, and Cloud Storage. -
Case Study | Etsy: Doing more with less cost and infrastructure
In this case study, read how after migrating their data center and ecommerce platform to the cloud, Etsy realized more than 50% savings in compute energy and leveraged committed use discounts (CUDs) to reduce their compute costs by 42%.
It’s important to remember that FinOps success looks different for different organizations. It’s neither a one-time fix nor a destination reached by way of a single path. But for every organization, success requires small actions, refinement, and continuous improvement. As you leverage Google Cloud FinOps resources and tools, your organization can:
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Drive financial accountability and visibility.
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Optimize cloud usage and cost efficiency.
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Enable cross organizational trust and collaboration.
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Prevent cloud-spend sprawl.
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Break down departmental silos.
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Accelerate innovation.
Getting started with Cloud FinOps
At Google, we have a team of experts in leading FinOps practices dedicated to helping you create an actionable plan to optimize cloud spend and drive cost efficiency. We’ve created numerous resources to help you get started from any stage in the FinOps journey.
Whitepaper | Maximize Business Value with Cloud FinOps
This whitepaper outlines steps to help your organization implement FinOps. It details required teams and processes as well as the optimal behaviors, approaches, and outcomes to help maximize your investment on Google Cloud.
With Google Cloud FinOps, your organization can also accelerate business value in the cloud. To find out more, join us on the Google Cloud Twitter channel twice a month for open Twitter Spaces discussions or reach out to your Google Cloud Sales Representative for a 1:1 discussion.