What are the three steps to building business cases for FinOps?

So, what are the three steps to building business cases for FinOps?

1. Identify and business objectives

The first step in building a business case for FinOps is to identify and quantify the specific business objectives you aim to achieve. This isn’t just about cost saving, though that’s often a critical component, it’s about understanding how FinOps can drive broader business outcomes. Consider questions like:

• How will FinOps boost efficiency?
• What’s the impact on profitability?
• Can FinOps enhance decision-making across the organization?

Gather insights from different teams like finance, IT, and operations. They’ll each have different priorities that FinOps can address. For example, while IT might focus on optimizing cloud resource utilization, finance may be more concerned with budget adherence and forecasting accuracy.

Once objectives are identified, quantify them. Use metrics such as cost reductions, time savings, or improved financial forecasting accuracy to make your case tangible. For instance, if your goal is to reduce cloud spending by 20%, calculate what that savings looks like in monetary terms and how it will affect the bottom line. This approach gives stakeholders a clear understanding of what success looks like and how FinOps will contribute to it.

2. Build a comprehensive financial model

A compelling business case for FinOps needs an outline of the costs, benefits, and ROI of the initiative. Here’s what to include:

Initial costs: what is the upfront investment? Think software tools, staff training, or consultancy fees

Ongoing costs: factor in recurring expenses like software subscriptions, personnel, and continuous improvement efforts

Projected benefits: link these directly to your goals. For example, if you’re aiming for better forecasting, quantify how much that will save or earn you

ROI calculation: show how the benefits outweigh the costs, including both direct financial gains and softer benefits like better decision-making

Use conservative estimates to keep it realistic and include a sensitivity analysis to show how changes in key assumptions (like cloud usage) could affect your ROI. This builds trust and demonstrates that you’ve covered all the bases.

3. Align stakeholders and secure buy-in

The final step in building a business case for FinOps is to align stakeholders and secure their buy-in. Here’s how to do it:

Tailor the message: different stakeholders have different concerns. The CFO cares about cost savings and ROI, while the CIO is likely focused on efficiency and scalability, so it’s best to customize your pitch accordingly

Engage early and often: involve key stakeholders from the start. This helps you gather the right data and ensures they feel invested in the process

Present clear, actionable insights: focus on how FinOps will benefit their specific areas and contribute to the organization’s success

Use data to build trust: wherever possible, use data to back up your claims. Whether it’s past cloud spending, industry benchmarks, or case studies. Solid data builds credibility

Finally, be ready to address any concerns. Stakeholders might have questions about risks, timelines for returns, or the impact on current operations. Tackle these head-on with well-prepared answers and contingency plans where needed.

Ready to find out more about FinOps, take control of your cloud spending, and drive better business outcomes?

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