An introduction to FinOps

What is FinOps, and why does it matter in SAM?

FinOps is all about bridging the gap between technology, finance, and business teams to get a clear view of cloud costs and drive better financial decisions. It’s a framework for managing the financial side of IT, ensuring that you’re getting the best value from your software investments, whether in the cloud or on-premises.

Traditionally, SAM Teams focus on compliance and inventory, ensuring licenses are used efficiently and in line with vendor contracts. But as cloud adoption grows, managing software costs becomes more complex. FinOps adds a layer of financial discipline to the process of acquiring, managing, and retiring software assets, helping SAM Teams manage costs more effectively.

How do FinOps principles help to streamline software spending and governance?

So, how does FinOps actually help with SAM? Let’s break down a few key FinOps principles and see how they apply to software asset management:

Visibility into spend

FinOps emphasizes having complete visibility into your software spending across the board. For SAM professionals, this is crucial. Without visibility, you can’t track how many licenses are being used, whether they’re being over or underutilized, and where waste is occurring. FinOps enables real-time visibility, so you can react quickly to any changes, avoid unexpected costs, and ensure your software budget is under control.

Collaboration between teams

One of the key strengths of FinOps is that it encourages collaboration between departments, especially IT, finance, and procurement. This isn’t always easy when these teams are used to working independently. But by bringing everyone together, FinOps makes it easier to align software investments with business objectives.

Optimization through data

A key aspect of FinOps is leveraging data to drive optimization. For SAM professionals, this means using detailed usage data to make informed decisions about license management. By analyzing usage patterns and costs, you can identify opportunities to optimize licenses, negotiate better deals, and reduce overall software expenses.

Cost accountability

FinOps promotes a culture of cost accountability, meaning that each department using software is responsible for its associated costs. This principle supports SAM professionals in having more productive conversations about software investments and ensures that software spending aligns with actual usage.

Common challenges SAM professionals face with financial operations

Integrating FinOps into SAM isn’t without its challenges.

Lack of visibility: gaining complete visibility into software usage and costs can be difficult, especially with the complexity of cloud-based applications

Evolving license models: keeping up with rapidly changing licensing models from cloud providers can be challenging, making it harder to understand their financial implications

Complex cloud costs: managing costs in the cloud introduces complexities such as dynamic pricing and tiered usage, which can be difficult to predict and control

Siloed teams: getting IT, finance, and business teams to collaborate effectively can be challenging

Unclear accountability: defining who owns the cost of software can be ambiguous, leading to uncontrolled spending and cost overruns

But these challenges aren’t impossible to overcome. By embracing FinOps principles, tools, and collaboration across teams, you will overcome these hurdles, bringing greater transparency and control to software spending.

Bringing it all together

Adopting a FinOps strategy is a powerful way to enhance your approach to SAM. By focusing on how FinOps will inform, optimize, and operate within your SAM processes, you’ll gain better control over software spending and drive more value from your investments.

Speak to our one of our specialists today to embrace FinOps and take your SAM practices to the next level.

Alternatively, please email us at [email protected] or call 01904 562200, and one of our specialists will be in touch to discuss your requirements.