#18. How to sell your CIO the idea of FinOps?

You might as well go ahead and tell your CIO that we can save on Cloud costs and reduce the Cloud budget by X percent… but is that sustainable? Is it worth the investment on people, processes, and platforms?

FinOps Comes with Costs

Cloud computing has become a commodity—an integral part of most IT investments. Companies invest in cloud services for many good reasons, but like any investment, they expect business value in return.

What about FinOps? It comes with its own price tag. While some argue that FinOps pays for itself through cloud cost savings, we must still ask: what is the true return on investment?

Here are some examples of costs associated with FinOps practices:

• Human resource: You need to hire at least one person to manage FinOps practices. Most companies have a dedicated team or even department working full-time on these responsibilities.
• Tools and Platforms: Whether you buy a tool or build one yourself, you'll need to invest significantly in tooling.
• Time: FinOps is a framework that requires extensive collaboration between cloud stakeholders, with many hours spent in meetings between stakeholders and FinOps practitioners. However, for cloud engineers in particular, FinOps demands even more time investment, as they must routinely implement FinOps tasks during their work sprints.

Not surprisingly, companies spend six to seven dollar figures annually on FinOps. What return does this investment bring?

If I were stuck in an elevator with a CIO, I would raise a simple question: Is cost effectiveness a criteria for our workloads in Cloud? Regardless of the answer, we will need FinOps to ensure that cloud costs become a business non-functional requirement for your cloud workloads. What does that mean?

Cloud Costs must be a Non-functional Requirement

Redundancy is a typical business requirement for banking systems. Banks cannot afford to lose customer data due to catastrophes, which is why they replicate their entire data centers.

Scalability, availability, security, and compliance are typical requirements for e-commerce systems. You expect Amazon and Zalando to always be online, to be safe while shopping, and to maintain the same shopping experience even during demand spikes on Black Fridays.

Yet, cost is often overlooked as a system requirement for business. It's merely treated as a bonus—a nice-to-have feature.

Companies can fail because they don’t consider cost at every stage of the business – from design to development to operation – or because they’re not measuring it properly. The math is simple: if costs are higher than your revenue, your business is at risk. — The First Frugal Architect Law

FinOps isn't just about cutting cloud costs. Instead, it's about treating cloud costs as an essential part of your business planning from the start. The main goal of FinOps is to make sure every dollar you spend on cloud services brings real value to your business. It associates cost of Cloud to business outputs.

Summary

To explain FinOps simply, think of it as a framework that aligns cloud costs with business value, transforming cloud spending into a non-functional business requirement. How does FinOps accomplish this? That's the topic for our next question.

Thanks for reading. Share if you found it helpful. Have questions or suggestions for future topics? We'd love to hear from you!

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