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FinOps solutions for 2024 cloud challenges

Optimize costs, enhance efficiency, and tackle common cloud economic issues

July 02 2024Max Gaus

Outline: Cloud challenges

Amidst a challenging global economy, organizations face immense pressure to cut operating costs and boost process efficiencies to thrive in competitive markets. This includes IT departments, often perceived as cost centers, yet hindered by unclear ownership of cloud expenses, causing confusion between engineers and financial teams, and resulting in misallocated funds and unwarranted constraints.

Challenge: Financial obscurity impacting cloud economics

Businesses must have full transparency of operational costs to avoid spiraling budgets and remain profitable. Yet, many organizations struggle to maintain visibility of cloud costs across different departments and are unaware of how they should be correctly attributed for business efficiency and financial gains.

FinOps solution one

Clear and in-depth reporting on the costs of shared cloud services is no longer a bonus; it is a necessity for all businesses wishing to streamline their budgets.

A dynamic FinOps service can provide more than a budgeting tool; it promises transparent and in-depth assessments of your consumption of cloud services and expert consultations on cloud budgeting and effective cost allocation so that budgets are not exceeded.

Additionally, a reputable FinOps service will offer assistance from financial experts who deal specifically in cloud economics, providing guidance on how to maximize cloud resources: valuable insights that most businesses do not have access to internally.

Challenge: Inadequate cloud governance restricts innovation

A lack of cohesion across departments can result in stifled innovation and impede progress, with restrictions typically placed on IT teams who are driving businesses to speed progress but face pressure from finance teams to reduce cloud costs.

The disparity between departments will only intensify as the influx of new technologies continues at a lightning pace.

FinOps solution two

An extensive 360-degree view of cloud usage is not only essential for financial reasons, but it also opens up new doors to possibilities.

Ultimately, integration across departments is crucial for cloud success, with a bridge between financial teams and engineers being critical. FinOps facilitates inter-company communications and understanding of cloud costs so that all departments can ensure their needs are met.

Cautious finance teams can assess usage by department, eliminate waste, and identify opportunities for IT, enabling them to flourish.

Challenge: Multi-clouds equal multiple challenges

Large organizations are incorporating multi-clouds into their business models, which brings a fresh set of challenges, including more complex operating environments and inadequate analytics tools that restrict the visibility of assets, leading to financial insecurity.

FinOps solution three

Multi-clouds require even greater reporting scrutiny due to their size and complexity.

Businesses with this model can utilize the advanced analytics tools available with FinOps, which allows assets to be correctly tagged to the right department for a broader visibility of cloud activity in real time, subsequently providing more precise data and enabling quicker decisions.

Additionally, hyperscalers that align their billing methods with FinOps best practices can ensure easier payment processes and consistency across multiple clouds for better cloud budgeting.

Challenge: Limited cloud transparency causes business inefficiency

Most finance and IT teams work in silos with limited transparency, preventing cohesion when aligning internal cloud costs. This wastes time, money, and resources, limiting agility in a competitive and fast-moving market.

FinOps solution four

Businesses must work constantly to improve operating efficiency and avoid unnecessary expenses and delays. A cloud FinOps solution can ensure cloud services are aligned to business KPIs for full traceability and keep projects on track, reducing waste.

Moreover, a good cost visibility and ownership of shared cloud services and assets can eliminate distrust amongst teams, fostering more harmonious working relationships.

Challenge: Cloud wastage leads to economic losses

Even if a business is not fully utilizing a cloud, it must still pick up the bill. This has become common for companies that lack cloud visibility and efficient processes to tackle wasted cloud resources.

FinOps solution five

FinOps’ cloud usage reports can alleviate the financial burden of unused cloud capacity by recognizing inefficiencies and indicating how to cut waste swiftly. Equally, all cloud fees are justified by economic gains, ensuring overpaying is avoided. At the same time, real-time tools can quickly identify when services are interrupted, accurately assess the financial impact, and provide a straightforward course of action to rectify the issue.

The need for FinOps is now

The need of the hour for businesses is cost-efficient transparency. Only through a 360-degree visibility and comprehensive reporting can they map cloud computing costs accurately and determine the business value they create while guaranteeing cost optimization.

Do you want to improve cloud cost optimization, achieve cost savings, and enjoy financial certainty?

In collaboration with Detecon International, T-Systems’ Cloud Migration Services team has developed FinOps capabilities to help organizations implement FinOps processes, whichever level of FinOps maturity they may be in.

Our cloud FinOps approach adheres to best practices as well as standards from the FinOps Foundation, so you can trust that your business is benefiting from the latest in cloud industry solutions.

About the author
Max Gaus

Max Gaus

Principal Cloud Adoption, T-Systems International GmbH

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FinOps solutions for cloud challenges 2024

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