Your ultimate guide to Cloud Financial Management
19 April 2024
Michaela Gray
Blog,
Cloud Financial Management (CFM) is the modern management of finance processes, moving away from traditional methods to evolve to meet the demands of the digital age. Find out everything you need to know about Cloud Financial Management now.
Cloud Financial Management is not solely about reining in costs; it’s a dynamic approach to maximizing the value cloud solutions bring to your organization, embracing the agility, innovation, and scale that cloud solutions offer. Discover the essentials of CFM, exploring how it transforms financial practices to align with the fast-paced landscape of cloud computing.
What is Cloud Financial Management?
Applying conventional, static planning, IT budgeting, and cost assessment models to the dynamic landscape of cloud usage can pose significant risks. This mismatch may lead to inaccurate planning and diminish visibility, ultimately resulting in missed opportunities for effective cost optimization and control, hindering the realization of long-term business value. To sidestep these challenges, it’s crucial to actively manage costs throughout the cloud journey, whether you’re building applications natively in the cloud, migrating existing workloads, or expanding your cloud services adoption.
Cloud Financial Management (CFM) solutions play a pivotal role in this transformation, offering tools for enhancing cost transparency, control, forecasting, and optimization. Beyond that, these solutions contribute to fostering a cost-conscious culture that instils accountability across all teams and functions. By leveraging CFM, finance teams gain insights into cost origins, operate with minimal unexpected expenses, strategize for dynamic cloud usage, and achieve savings on cloud expenses as teams scale their cloud adoption. Sharing this financial context with engineering teams equips them with the necessary insights for intelligent resource selection, utilization, and optimization.
What is FinOps?
Fundamentally, FinOps represents a cultural approach to managing cloud costs, emphasizing collective ownership of cloud usage within a framework of established best practices overseen by a central group. Collaborative efforts across cross-functional teams encompassing engineering, finance, product, and more are integral. This collective engagement aims to expedite product delivery while concurrently enhancing financial control and predictability. FinOps encompasses Cloud Financial Management.
The FinOps Lifecyle
The FinOps lifecycle consists of three elements; inform, optimize, and operate.
At any given time, a company can find itself in multiple phases, contingent upon the specific business unit, application, or team undergoing its respective journey.
Inform – visibility and allocation
In the inform phase of the FinOps lifecycle, activities revolve around identifying data sources for cloud cost, usage, and efficiency. Utilizing this data for allocation, analysis, and reporting empowers teams to excel in budgeting, forecast trends, establish benchmarking KPIs, and unveil the business value of cloud spending. Accurate spend allocation, achieved through tags, accounts, or business rules, ensures precise reporting. As teams benchmark against others and assess operational efficiency, combining cloud cost data with sustainability metrics enables key performance indicator visibility. The dynamic nature of the cloud demands continuous data-driven decisions for optimal business outcomes.
Optimize – rates and usage
During the optimize phase of the FinOps lifecycle, activities focus on leveraging insights gained in the inform phase to enhance cloud efficiency. Cloud providers offer diverse avenues for resource optimization, including rightsizing underutilized resources, adopting modern architectures, and automating waste elimination. This phase also entails optimizing cloud rates through visibility, analysis, and reporting for effective management of commitment discount pricing models. Collaboration across teams ensures streamlined processes aligned with the organizationās cloud value goals, ultimately maximizing value from the cloud investment.
Operate – continuous improvement and usage
Within the operate phase of the FinOps lifecycle, activities revolve around instituting organizational changes to operationalize FinOps, utilizing data and capabilities developed in the inform and optimize phases. This encompasses establishing cloud governance policies, monitoring compliance, and empowering individuals through training programs and automation policies aligned with organizational objectives. Success in FinOps requires fostering a culture of accountability, and promoting collaboration among engineering, finance, and business teams for continuous, data-driven action. Throughout this phase, the goal is iterative development, refining workflows, and evolving FinOps operations through ongoing evaluation and adaptation.
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Our Cloud Cost Optimization Services
Effectively managing cloud expenses is crucial for organizations to ensure they allocate resources judiciously. With our Azure Essentials cost management and optimization service, your organization gains comprehensive oversight and authority over its cloud infrastructure. This service streamlines cloud operations, enhancing productivity, collaboration, and overall efficiency for your organization.
Our cost management and optimization service for Microsoft 365 (M365) provides your organization with complete command over your M365 cloud resources. This empowers you to optimize your investments, fostering transformation, collaboration, and knowledge to empower your workforce. Through our M365 service, you gain access to robust Power BI dashboards, meticulous license tracking, enhanced security measures, and a framework for fostering effective user adoption.
License Dashboard’s SaaS Manager plays a pivotal role in supporting your Cloud Financial Management by closely monitoring SaaS subscriptions and cloud spending within your organization. It ensures efficient tracking of usage and helps you stay within budgetary constraints. With a focus on managing costs across AWS, Azure, and Google Cloud Platform, our platform becomes an essential tool for organizations prioritizing the reduction of expenditure in SaaS subscriptions. By vigilantly overseeing both cloud computing and the potential influx of SaaS applications, we contribute to your financial optimization efforts.
How License Dashboard will support with your Cloud Financial Management
Contact us to find out more about how we can support your cloud finance management process.
Alternatively, please email us at [email protected] or call 01904 562200 and one of our specialists will be in touch to discuss your requirements.
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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
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