Guest contributor |
During my time as a Microsoft technical evangelist at Kyndryl, I’ve had the opportunity to engage with enterprise leaders around the world. From these interactions, I have discovered that whilst many organisations focus on cost optimisation, they fail to put a framework in place to help mitigate uncontrolled cloud spending. These experiences have also highlighted one of the challenges in cloud management: achieving financial accountability through collaboration among engineering, finance and business teams.
FinOps is an operational framework and cultural practice that aims to solve these challenges and enhance the business value of cloud computing. It is not merely about cost management, it promotes timely, data-driven decision-making and integrates financial accountability, which is critical in today’s dynamic cloud environments.
I often use the ‘Iron Triangle’ as a visual and conceptual tool to help stakeholders understand the inherent trade-offs between speed, quality and cost when I am discussing FinOps. For example, finance teams may be focused on cost containment and measuring success through budget adherence and cost reduction, whereas engineering teams may prioritise technical performance and the reliability of the software they use. Meanwhile, business teams may focus on delivery speeds and customer satisfaction. These differing priorities can make collaboration challenging, as each team’s success metrics may inadvertently undermine another’s efforts.
To overcome this challenge, it is crucial to identify key performance indicators (KPIs) that encourage interdepartmental cooperation. One of the often-recommended KPIs from the FinOps KPI library that aligns with this goal is unit cost efficiency. This KPI measures the cost per unit of output, whether it is transactions, users or another quantifiable element. It is effective because it requires input and cooperation from finance, engineering and business teams, meaning it can bridge the gap between competing priorities. For instance, it can encourage finance teams to work closely with engineering departments to understand the drivers of cost in technology development, giving engineers the chance to demonstrate how optimisations can reduce cost and enhance performance.
This collaborative approach not only aligns the teams towards a common objective, but it also enhances the overall financial discipline of the organisation, ensuring that investments in technology directly contribute to business value.
Jaisson Mailloux is director and Microsoft technical evangelist at Kyndryl
This article was originally published in the Summer 2024 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.