FinOps Practice and CFM Tooling Maturity

By Kenny Shepard posted 04-17-2024 18:13

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Introduction

Are you maximizing the value of your Cloud Financial Management (CFM) tooling? And to what extent does your CFM tooling enhance your FinOps practice?

In this blog we will use the FinOps maturity model (crawl, walk, run) to illustrate whether we are getting the right level of value from our CFM tooling. And similarly, whether our organization is advancing the tooling maturity at a similar pace as that of the FinOps practice.

But why is it important that we consciously mature our practice in lockstep with our tooling?

Quite simply, we will have a difficult time establishing a culture of accountability without insightful and accurate reporting (which is an outcome of our CFM Tooling).

Likewise, we can have the most sophisticated and capable tooling available on the market, and if we do not develop processes and practices which drive accountability, the tool will provide very little value.

This lends itself to reference (or discover) the People, Process, and Technology framework, which emphasizes the importance of considering all three of these factors as critical components in achieving, in this case, our FinOps goals.

*The above illustrations are taken from People, Process, Technology: The Framework for Workforce Management.

Maturing FinOps and CFM Tooling In Lockstep

All things in FinOps are done with the ultimate goal of lowering the financial risks of utilizing cloud. CFM Tooling contributes to your FinOps practice in such a profound way, it is fair to assume that if your tooling maturity fails, so does your practice, and will increase your financial risk factors.

Increased FinOps practice maturity includes increasing CFM Tooling maturity/adoption. Which includes...

Integration of FinOps practice and CFM Tooling – Using your practices to push users to tooling. Controlling the narrative. Designing tooling views/configurations/data sets to facilitate practices.

Integration of CFM Tooling and IT Products – Integrating CFM Tooling with common IT management products like ServiceNow, Jira, Turbonomic, etc. will significantly improve your automation options.

The below illustration tells a story of success in FinOps, when maturing People, Process, and Technology in unison. The activities listed under each header provide examples of how the processes were developed in consideration to, or even driving use of the tooling.

Increased Maturity Walk Through

Viewing the above diagram, during the Pre-Crawl phase, it is quite common that organizations will be focused on cost totals because they lack the ability to break the costs out into business context. To address this challenge, and get our organization into a more mature space, we will look to achieve improved cost allocation capabilities via tagging.

To advance our tagging to Crawl will require us to create a standard, or a policy, which we will also need to enforce. Once the desired level of compliance for our tagging standard is achieved, we can now utilize our tooling to create reporting contextualized by values which are well known in our organization. With this improvement we have advanced this capability to Walk, and while we now have the context of who spent what, we are still relying on cost totals to tell the story.

To bring additional meaning to our spend, we want to understand if this spend is efficient . For this, we will develop a collection of Key Performance Indicators (KPIs) designed to measure our spend against efficiency targets. This is where our tooling is critical as it will need to be flexible enough to create custom KPI calculations and display them at the desired level of the organization.

Through lots of consistent messaging and education, we eventually get to Run because we have automated our cost allocation and are routinely taking the context and meaning provided by our reporting and making key decisions.

Note the progression from pre-crawl to run (as explained above) highlighted by red text.

In Summary

While your CFM tooling is different from your FinOps practice, both carry equal importance in driving a FinOps program to fruition. Some of the most defining approaches and tooling characteristics to consider are:

Integration of your FinOps Practice with your CFM tooling - When the practice routinely drives users to the tooling, this allows FinOps to better control the cost and accountability narrative.
Integration of your CFM Tooling with IT management products - Ensure that your CFM tooling can integrate with IT products. This will help to align your asset/service management, performance management, etc. to the spend and accountability narrative and will enable a much richer set of automation options.
Flexibility to import custom data and perform custom calculations - Custom data and calculations are enablers of a robust array of KPIs that bring meaning to your spend.

While your tool is not your FinOps, your FinOps is very reliant on your tooling, and refining the two in lockstep will significantly increase the likelihood of successful outcomes.

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