I have to thank Ron Brill of Anglepoint for a recent presentation he gave on FinOps and SAM during the WG21 plenary. He highlighted the roots of where FinOps had come from and where it stands today. Essentially, FinOps is the multi-disciplinary approach to cloud cost management. However, due to the sprawling reach of the cloud, it delves into adjacent concepts such as “lean” and “agile”.
Introduction – FinOps – Where SAM Needs to go
Typically, we sign up for a cloud solution and think highly of the flexibility that the as-a-service capability provides. Previously, workforces shackled to terminals can now move with swan-like ease and keep productive while in motion. Data does not suffer a time-lag or air-gap merely because staff aren’t located at a desk. However, such mobility and the infrastructure that backs up that mobility will come with a fee. Specifically, a service fee; and the clock is ticking ladies and gentlemen – that service runs 24/7/365; whereas your staff may not!
We need to adopt an approach whereby IT cloud resources can be scaled to requirements to off-set any financial burn. Don’t treat cloud infrastructure in the same way that on-site software is managed. Cloud services have a much shorter billing cycle, whereas on site software is typically paid for upfront. To manage cloud effectively, we have to keep pace with that billing cycle.
However, to solely think that keeping the cloud lean is our ultimate goal does FinOps a dis-service. If we consider the retail sector, much of their profit is made in the run-up to Christmas, so having the ability to “flex up” and flex back down again after any January sales, means that we can optimise the IT spend against an improved cash flow.
Seasonal trends are certainly a watch-word in retail, but so is the phrase “product launch”. First mover advantage increases the potential for market capture, but also brand retention and an upswing in brand loyalty when the time comes to purchase such Fast Moving Consumer Goods (FMCG) once more.
Ensuring IT/ Cloud Architecture and Procurement can speak the same language then means that a cost/ benefit approach to flexing cloud services is understood by these two pivotal elements of the business. IT architecture do not come to Procurement Oliver-style “asking for more”; they are able to demonstrate that a change to the infrastructure demonstrates a fiscal benefit to the business. Procurement needs to make decisions in a much quicker fashion – are you starting to see the cultural change here?
Whereas SAM takes a vendor-based view of the IT estate, what we can suggest is taking a best-practice approach to tagging, and ensuring that all cloud services (and their components) are appropriately tagged. Once you customise these tags against the IT services that are presented to the business, then you stand a much better chance of being able to run a SQL query within your SAM suite to retrieve the financial data for all software/services that are tagged and whose Service ID: = “1234” (where 1234 might equal “E-Commerce” as an example). Aligning tagging to your request process then means your business understands the cost of an IT service as it is stood up, but also as it is maturing through its lifecycle.
Stand-by to become the CFOs new best friend!!
To read more on tagging, SAM and how this could help with FinOps – head over to our whitepapers page and grab yourself a copy of “Using SAM to Create and Maintain your CMDB.”
Compliance presents a vendor’s view of your IT estate. FinOps (and tagging) has the potential to present a business-based view of your IT estate. Once you come to realise who pays your wages, you’ll start to comprehend which perspective takes priority.