Creating a FinOps practice as the first practitioner

  1. Decrease the money feedback loop
  2. Decrease price of cloud infrastructure

The money feedback loop

The price of cloud infrastructure

At its core, the price of cloud infrastructure is an extremely simple formula:

Lowering Rate

Examples of lowering rate include: negotiating enterprise discounts, private pricing agreements, and savings plans/reservations/commitments. In order to have the greatest impact, actions that lower the rate should be managed in a centralized fashion.

Lowering Usage

Unlike lowering rates, lowering usage is best tackled in a decentralized fashion. This means that a centralized FinOps person/team can help organize, plan, and prioritize the work, but actual execution is often best done by individual engineering teams.

  1. Listen and observe
  2. Visibility, visibility, visibility!
  3. Reduce those rates
  4. Think bigger picture
  5. Automate and grow team
  6. Tackle larger problems

Phase 1: Listen and observe

As with any new job, your initial task is to listen, observe, and take in as much information as you can. Every company operates slightly differently, and is in a different stage of their FinOps journey. You’ve got to understand the foundation you’ll be working with.

Existing tagging strategy

Tagging is the practice of applying labels to individual cloud resources in order to identify and attribute spend. There’s a good chance that the company you’re joining has an existing strategy around this infrastructure tagging, but the maturity of that tagging practice can vary widely.

Current spend visibility

Who can see costs, and what does that view look like? Where do engineers currently go to get cost feedback (if anywhere)? What about managers or team leads? VPs? The executive team?

Existing goals around spend & optimization

There’s a reason that you were hired for this role. What is that reason? There’s a good change that that reason is going to vary depending on who you’re talking to. As you meet people across the company, ask each of them for their own personal interpretation of why your role exists in the first place.

Decisions around architecture and upcoming work

It’s also important to figure out where engineering decisions are being made, and start listening in. This could mean joining a Release Management meeting or Slack channel, reading OKR documents each quarter, or even meeting with teams directly.

Phase 2: Visibility visibility, visibility!

Visibility is one of the most important aspects of FinOps, as it’s the foundation upon which everything else is built. Phase one includes understanding what visibility looks like today. Now it’s time to improve that view.

Visibility Level I

This is the base level of visibility, allowing you to view costs by different cost centers. Do you know how much teams are spending? Do you know how much certain applications cost to run?

Visibility Level II

Visibility Level II is where you add both context and meaning to these costs. This means joining billing data with business metrics in order to calculate efficiency.

Additional Visibility

One other area you should check on, when it comes to cost visibility, is Finance. Figure out how they’re categorizing different types of costs, processing the cloud provider invoice, forecasting spend, etc.

Phase 3: Rates

As I mentioned in The Price of Cloud Infrastructure, efforts around reducing rate should be done in a centralized manner. That is to say, there should be either a single person, or a small group of people, working on any areas that might impact the price of cloud resources.

Phase 4, 5, 6: Bigger picture, automate, and expand

Everything outlined above is no small task. In fact, there’s a good chance that once you get this up and running, it will take up the majority of your time. If you’re not careful, time will fly by and you’ll continue doing the same thing in the same way week after week.

A career in FinOps

I want to end this post with a few personal opinions on building a career in FinOps, both for individual practitioners as well as companies trying to build (and retain!) a successful FinOps team.

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Senior Technical Program Manager @ FullStory. Formerly FinOps @ Datadog. Tech guy and playwright. Visit me https://dannb.org

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Dann Berg

Dann Berg

Senior Technical Program Manager @ FullStory. Formerly FinOps @ Datadog. Tech guy and playwright. Visit me https://dannb.org