target audience: TECH BUYER Publication date: Jun 2022 - Document type: IDC Perspective - Doc Document number: # US49279122
CIO Guidance: Building a FinOps Team
This IDC Perspective focuses on the value of investing in the management practice called FinOps, examining not just these issues surrounding cloud spend but also creating a FinOps governance culture that will optimize cloud value across the enterprise. The unique value of FinOps is that it recognizes that cloud technologies are the foundation of nearly all digital innovation, and cloud-based business innovation must be promoted as the ultimate goal of a successful digital business strategy. But at the same time, business innovation can only be successful if balanced against spending. With cloud costs soaring, how a CIO responds to this spending governance challenge is a key determinant to how successful an organization will be with its digital transformation initiatives. FinOps provides the governance best practices upon which a strong foundation for cloud growth can be successfully built.
FinOps governance practices can be viewed as a new management science that is being continuously invented and reinvented to stay abreast of the cloud's continuous innovation and consumption. The cloud is not only rapidly expanding but it also has flipped on its side the way the primary technology resources for IT are funded and paid for. Previously, the work required to manage cloud spending focused on before-the-fact governance — ensuring that an organization would buy and own enough IT infrastructure to support its future needs. But now the product, finance, and engineering teams need to focus on constantly steering toward (and away from) spending on specific resources to support the needs of the constantly changing here and now. FinOps provides a framework around which the owners of these dimensions can work together to steer this course to deliver optimum innovation at optimum price.
The FinOps Foundation defines the practices as "an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance, and business teams to collaborate on data-driven spending decisions."
"As the CIO plans how to best architect a rightsized, high-quality FinOps organization and culture, there are multiple factors to consider," says Bob Multhaup, adjunct research advisor with IDC's IT Executive Programs (IEP). "The most important factors for CIOs to consider are cloud size and complexity, organizational complexity, architecture integration, roles, and engineering collaboration."