FinOps operations management

Build a FinOps team

• Ensure the FinOps team is well-positioned in the organization, has an appropriate structure and staffing, and receives the necessary funding.

• Ensure the work plan accounts for the growth of FinOps in the organization and follows an established maturity process.

• Define and continuously develop the skills of the FinOps team.

Manage the FinOps practice

• Develop an implementation plan for the organization's FinOps strategy.

• Gradually increase the maturity of the practice.

• Manage FinOps work.

• Integrate data and processes across the organization.

Collaboration and decision-making

• Introduce FinOps to different departments based on the organization's goals and needs.

• Foster relationships with stakeholders.

• Manage decision-making models.

Drive stakeholder buy-in

• Phase 1: Plan for FinOps.

• Phase 2: Socialize FinOps.

• Phase 3: Prepare the organization.

• Drive cultural buy-in.

Definition

FinOps operations management involves the activities required to build and run a FinOps practice within an organization.

This capability covers a wide range of activities to effectively run a FinOps practice. These activities include the initial steps an organization takes to adopt FinOps. They also include ongoing adjustments to the FinOps team and its scope as the practice matures. This involves a continuous effort to build a cost-aware culture across the organization. It also requires decision-making frameworks to foster collaboration between departments.

Much of the work in this capability goes beyond directly understanding spending, quantifying value, or optimizing the organization's cloud usage. At its core, operating a FinOps practice involves support activities that help implement and grow FinOps within the organization.

An important note on the term "FinOps team": Each organization's FinOps practice is unique, and so is its FinOps team. A FinOps team is the group of people responsible for driving the implementation of FinOps in an organization. These individuals might work in a central team or form a completely virtual team, such as a FinOps committee with members from different core role groups, typically covering finance and engineering. They might also use a hub-and-spoke model. This means members of a central FinOps team are distributed throughout the organization, often embedded in engineering teams. Other organizational forms exist, depending on the organization's needs and structure. Some are formally named the "FinOps Team", while others may have different names, such as a Cloud Business Office. Some organizations may run their FinOps practice within a Cloud Center of Excellence or another team. Throughout the FinOps Framework, "FinOps team" is an inclusive term. It refers to the people who support, execute, and maintain the FinOps practice, regardless of their organizational form or name.

Additionally, the managers of a FinOps team are sometimes called FinOps enablers. Although the practice of FinOps requires a culture of collaboration and accountability, the broad changes that come with cloud adoption are difficult to achieve without strong management to encourage, support, and provide guidance.

For most organizations, building a FinOps team is a gradual process. The roles and skills needed to foster a FinOps culture evolve over time. They typically require a mix of leadership, communication, analytical, and technical abilities to support work in other FinOps domains. The requirements for a FinOps team depend mainly on two factors: the complexity of the organization and the complexity of its cloud usage. As a result, the team size tends to grow as an organization becomes more mature in its cloud usage and as more internal teams participate in cloud use and the FinOps practice. The FinOps team usually reports to the management responsible for making cloud adoption successful. In organizations focused on digital transformation, the CTO or CIO often oversees FinOps and cloud adoption. In organizations more focused on financial control, the CFO might lead the FinOps team. Regardless of who the FinOps team reports to, building strong relationships with the owners of all FinOps roles in the organization is critical to ensure strong collaboration and minimize silos.

Over time, managing the FinOps practice involves developing and refining the practice's strategy. It also involves aligning the team and its scope with the key capabilities for obtaining value from the cloud. This includes adjusting the FinOps team's staffing, size, skills, tools, and focus accordingly.

Operating a FinOps practice defines how different roles in the organization collaborate and make decisions. FinOps requires collaboration to make timely, data-driven decisions that improve cloud value. Understanding the decision and accountability structure helps cross-functional teams develop the processes and decision trees needed to resolve challenges and conflicts.

The FinOps team clearly defines the boundaries of responsibility for cloud-related activities among all roles. This allows issues to be resolved promptly and transparently, preventing waste and loss of value.

Finally, the initial adoption of FinOps in an organization happens in phases. It starts with initial planning, moves to socializing FinOps concepts among various role groups, then to preparing the organization for launch, and finally to establishing the FinOps cultural practice. This may seem like a linear process. However, it is actually repeated as new departments join, responsibilities change due to organizational restructuring, acquisitions occur, new management or teams emerge, or even as new cloud usage patterns appear. Some of these steps might be simplified in later iterations.

You can use existing decision-making and governance mechanisms. Ensure the FinOps decision and accountability structure is clear and documented. This includes who has decision-making authority and which roles are consultative. Clarify how your team structure aligns with the organization's overall governance framework to ensure clear reporting lines and accountability for tasks and deliverables.

This capability is closely related to other capabilities in the "Managing the FinOps practice" realm. The "Adopting FinOps" working group has developed more detailed information on the phases of FinOps adoption.

Maturity assessment

Crawl

• As cloud adoption grows, the organization creates a FinOps executive summary through an initial assessment. This summary is provided to various executives in the organization, offering relevant details for each.

• Cloud adoption or usage is low, or the complexity of cloud use is low. Therefore, generic FinOps goals and Key Performance Indicators (KPIs) can be used to measure progress.

• A list of required resources for the FinOps team is prepared. This includes any budget requirements for recommended resources.

• As cloud usage grows, a FinOps team lead is identified. Ideally, the FinOps lead should have extensive experience as a FinOps practitioner, a FinOps practitioner certification, experience and influence within the organization, and experience in complex project management. If no suitable candidate is available within the organization, the FinOps Job Board can help find a suitable candidate.

• An initial staffing plan, resource list, and proposed budget have been developed for the FinOps team.

• Virtual FinOps teams are formed rather than hiring dedicated full-time staff. These virtual team members include cloud engineers, finance staff, reporting teams, and trainers.

• An initial scope of work, goals, and timeline are established for the team's first activities. If this is the first adoption for a new department in the organization, they will benefit from communicating with and learning from other, more mature teams.

• Key activities rarely require cross-functional collaboration or urgent decisions, and management processes are immature.

Walk

• Cloud usage becomes more complex and mature. The organization needs a relatively mature FinOps team whose role is well understood by most teams.

• The FinOps team collaborates across roles at multiple levels of the organization, communicates effectively, and provides various ways to interact with the team.

• The cloud strategy is clear and well-defined. The FinOps strategy is also clearly articulated, with specific goals identified and agreed-upon KPIs in use.

• The FinOps team regularly reviews its needs, size, roles, and positioning, and makes adjustments as needed.

• Most members of the organization have adopted FinOps as an operating model and are developing its cultural practices.

• Regular, but not frequent, cross-functional planning meetings are held to set goals, define tasks, allocate resources, and create timelines for the FinOps practice.

• The FinOps team manages internal objectives and key results, intake processes, request categorization, task tracking, and regular status updates.

• Various activities that require timely or cross-functional decisions are well understood and documented. These activities occur regularly and require a more formal decision-making model.

Run

• The organization's cloud usage or the organization itself is highly complex and mature, with a wide variety of services and architectures. This requires a larger, more established FinOps team. The team is well-established within the organization, and its role is fully understood by all stakeholders and at all organizational levels.

• The FinOps team collaborates across roles at all levels of the organization, communicates effectively, and provides various ways to interact with the team. Additionally, FinOps enablers and other relevant personnel are engaged to expand the team's reach and support.

• The cloud strategy is clear and well-defined. The FinOps strategy is also clearly articulated, with specific goals identified and agreed-upon KPIs in use. These KPIs may vary for different cloud application scenarios.

• The FinOps team regularly reviews its needs, size, roles, and positioning, and continuously makes adjustments. It also collaborates with extended support teams in established ways to handle specific complex situations.

• The FinOps team has a regular source of funding, and the team's needs are well supported.

• The entire organization has adopted FinOps as an operating model and cultural practice.

• Regular and frequent cross-functional planning meetings are held to set goals, define tasks, allocate resources, and create timelines for the FinOps practice.

• FinOps processes are integrated into daily activities and implemented through channels suitable for most teams in the organization.

• A comprehensive and well-documented decision-making model is required for large or complex organizations that must frequently make numerous cross-functional decisions.

Functional activities

FinOps practitioner

• Research and confirm the organization's cloud goals, current strengths, weaknesses, opportunities, and obstacles that affect its cloud usage, costs, and value.

• Provide the executive team with clear and concise staffing requirements. This includes the required full-time and virtual staff, recommended positions within the organization's hierarchy, the overall budget for FinOps, and the goals for the FinOps team's operations.

• Support the organization's adoption of FinOps by connecting with executives and other stakeholders. Actively collaborate with employees in affected teams, such as engineering or finance, to engage them more fully and drive long-term participation and cultural change. As the FinOps team grows, provide regular and consistent updates to all employees to keep them involved in the process.

• Establish a repository for the FinOps team that contains relevant reports, FinOps information, and instructions for employees on how to use this information.

Finance

• Understand the goals of the FinOps team and the collaborative relationship.

• Support the FinOps team and its members by sharing insights on requirements, tools, necessary information, and financial activities.

• Participate in identifying and providing input for decision-making models that may require expertise, such as those for prepaid reservation fees or managing budget overruns.

Product

• Understand the goals of the FinOps team and the collaborative relationship.

• Support the FinOps team and its members by sharing insights on requirements, tools, and necessary information.

• Participate in identifying and providing input for decision-making models that may require expertise, such as those for managing budget overruns.

Procurement

• Understand the goals of the FinOps team and the collaborative relationship.

• Support the FinOps team and its members by sharing insights on requirements, tools, and necessary information.

• Participate in identifying and providing input for decision-making models that may require expertise, such as those for prepaid reservation fees.

Engineering

• Understand the goals of the FinOps team and the collaborative relationship.

• Support the FinOps team and its members by sharing insights on requirements, tools, necessary information, and engineering activities.

• Participate in identifying and providing input for decision-making models that may require engineering expertise, such as those for managing anomalies.

Management

• Provide advice on the FinOps team's goals and how management can be involved.

• Support the actions of the FinOps team throughout the organization.

• Regularly review the effectiveness of the FinOps team and determine what adjustments are needed in staffing, scope, team size, or organizational structure.

• Support the FinOps team and its members by sharing management requirements, tools used, and necessary information.

• Participate in identifying and providing input for decision-making models that may require expertise, such as those for prepaid reservation fees or managing budget overruns.

• Provide funding and resources for the FinOps team.

Associated roles

• Understand the goals of the FinOps team and the collaborative relationship.

• Support the FinOps team and its members by sharing insights on requirements, tools, and necessary information.

• Participate in identifying and providing input for decision-making models that may require expertise, such as those for managing budget overruns.

Success metrics and KPIs

• KPIs that measure cost savings or cost avoidance achieved by the FinOps team, demonstrating the value of FinOps and the team's effectiveness.

• The level of organizational awareness of the FinOps team and the degree of adoption of the FinOps practice and culture.

• Seamless collaboration across organizational levels and functions, promoted by the FinOps team.

• The reports and dashboards provided by the FinOps team are widely used. You can develop new and improved dashboards or reports to track employee usage and use the data to confirm employee engagement in the process. If engagement is low, you can promptly collect feedback to understand why.

• When cross-functional or urgent business decisions are required, the FinOps team follows a defined decision model.

• Active sharing of FinOps information within teams and from management to employees. Management confidence in using provided data for communication is high.

Inputs and Outputs

• FinOps tools and services - Coordination of staffing, support, tools, and resources to improve the efficiency of the FinOps team.

• FinOps training and enablement - Coordination of training delivery to continuously develop the skills of FinOps team members and other departments.

• Executives and management support the FinOps team's activities through executive sponsorship.

• Human resources and organizational design teams are responsible for developing FinOps role descriptions, recruitment, skill development, and support.