How to navigate the FinOps lifecycle
4th March 2025
Michaela Gray
Blog,
As the growth of cloud services rapidly increases, many organizations find it more difficult to manage the unpredictable cloud costs, leading to overspending, inefficiencies, and lack of visibility. Introducing the FinOps lifecycle will help you to regain control over your cloud spending and align financial management with your goals.
What is FinOps?
FinOps (Financial Operations) brings together finance, operations, and technology teams to manage and optimize cloud spending effectively. It’s focuses on improving visibility, efficiency, and financial accountability. By implementing FinOps practices, you will gain better control over your cloud costs, make informed decisions, and maximize the value of your cloud investments.
Inform: understanding your cloud spending
The first step in the FinOps lifecycle, Inform, is all about getting a solid grasp on your cloud usage and expenditures. This stage involves gathering detailed data on cloud consumption, costs, and resource allocation. By making your cloud expenses transparent and easy to understand, you will boost your financial awareness.
The Inform phase includes:
Data collection and analysis: pulling together information from different cloud providers to get a complete view of your spending patterns
Tagging and categorization: implementing an effective tagging system to organize resources and accurately track costs
Reporting and dashboards: creating comprehensive reports and dashboards that clearly show your cloud costs and usage metrics
Optimize: driving efficiency and cost savings
Once you have a clear view of your cloud spending, the next phase, Optimize, focuses on identifying opportunities for cost reduction and efficiency improvements. This stage is a continuous process of analyzing your cloud usage, making recommendations, and implementing changes to ensure your resources are being utilized effectively.
The Optimize phase involves:
Cost allocation and budgeting: assigning costs to specific departments or projects to ensure accountability and adherence to budgets
Resource right-sizing: adjusting resource sizes and configurations to match actual usage patterns, to ensure you’re not paying for more than you need
Reserved instances and savings plans: taking advantage of long-term commitment options to secure discounts and reduce overall spending
IT and SAM news delivered straight to you
Operate: ensuring financial accountability
The final phase of the FinOps lifecycle, Operate, involves maintaining financial accountability and sustaining the benefits achieved through the previous stages. This involves continuous monitoring, governance, and collaboration to ensure that cloud spending continues to align with business goals and strategies.
The Operate phase includes:
Policy enforcement and compliance: establishing policies and guidelines to manage cloud usage and financial goals are met
Cost anomaly detection: implementing automated alerts and monitoring to quickly detect and address any unusual spending patterns
Performance tracking and KPIs: measuring the success of FinOps initiatives by tracking KPIs and conducting regular reviews
To make the FinOps lifecycle work, your organization needs to embrace a new way of thinking. It’s all about getting finance, operations, and tech teams to work together toward a common goal, managing cloud costs more effectively. By building a culture of transparency, accountability, and ongoing improvement, you can get the most out of your cloud investments and see real benefits.
Discover how to unlock the potential of your cloud investments, enhance efficiency, and achieve financial accountability with License Dashboard now.
Alternatively, please email us at [email protected] or call 01904 562200, and one of our specialists will be in touch to discuss your requirements.
Get in touch today
Michaela has worked within the industry for over 11 years, both within sales and marketing. She works closely with the team to support them with all their marketing needs and maintains and promotes the License Dashboard brand.
Michaela Gray
