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Switching from a FinOps Observability to a FinOps Orchestration Mindset

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It's one thing to know what you're spending on cloud services. It's another to leverage that insight to drive actual cost savings.

That may seem like a simple truth, but it's one that businesses commonly overlook. In many cases, organizations focus much more on achieving cloud cost observability, which is only a step toward what should be their ultimate goal: Cloud cost orchestration, or the ability to take action based on cloud spending data.

Here's why that's a mistake, along with guidance on what it takes to achieve true orchestration, not just observability, in the context of FinOps and cloud cost optimization.

Why FinOps observability falls short

Most businesses realize that they need observability into their cloud spending. They know that cloud services and billing models are complex, and they recognize the importance of being able to identify what they are spending on which cloud services.

So, they deploy tools that help them monitor cloud costs in order to achieve FinOps observability. These tools quantify what they're spending, how their cloud spend varies over time, how changes to cloud workload configuration affect spending, and so on.

FinOps observability may show which cost-savings opportunities a business could potentially leverage by pooling resources across multiple business units in order to increase its bargaining power when negotiating for discounts with cloud providers. But observability alone doesn't provide the vital business context necessary to understand which services are the most obvious candidates for price renegotiation, for example, or how cloud service usage fluctuates on a seasonal basis. As a result, groups and teams struggle to operate collectively; instead, they focus on their own accounts – a strategy that might help to optimize costs within departments but not across the business as a whole.

That's unfortunate from the perspective of FinOps because some of the most significant savings opportunities are ones that can be applied across the enterprise. If you can negotiate lower rates for cloud services with your cloud provider, the entire business instantly saves money. That beats trying to make individual groups more efficient in their cloud spending without thinking about the business as a whole.

When you think beyond basic cloud cost monitoring, however, bigger-picture savings opportunities come into play. Again, knowing your basic per-unit cloud costs are a step toward unlocking these opportunities, but they're only that – a step. Complete cost optimization requires more than FinOps observability data.

Bridging the gap between technology and people

In addition to gaining the ability to analyze and optimize costs in ways that benefit the business as a whole, maximum cloud cost savings require a way to bridge the gap between technology and people.

This is important because, in most cases, the stakeholders responsible for looking for savings opportunities – people who usually come from a finance background – typically have a limited understanding of the technical requirements of cloud services. They can figure out how much different departments are spending on the cloud and how that affects the business's bottom line, but they often have limited ability to understand which specific cloud technologies the groups are using and whether they need those technologies. This lack of expertise makes it harder to translate spending data into cost-savings opportunities that allow businesses to reduce cloud spending without compromising on the cloud services their teams require.

To put this another way, organizations must be able to bridge the gap between cloud cost reporting teams and cloud operations technology. Cloud consumers need the education and guidance necessary to put cost observability data to work by actually modifying cloud service configurations and consumption patterns.

Taking action is the challenge

When it comes to cloud cost optimization, the most complex challenge is not figuring out what you're spending or what you're spending it on. You can collect that data easily enough by observing your business's cloud spending patterns.

The real challenge lies in taking action based on cost observability data. Due to issues like siloed cost reporting that doesn't extend across the enterprise and uncertainty among financial analysts about which technologies cloud operations teams actually need to do their jobs, cost data isn't always put to optimal use. A further complication is that engineering teams have many competing priorities, and cloud cost optimization is often not at the top of their list. Without concerted effort, your cloud bill is not likely to change, no matter how much spending data you collect.

The good news is that this challenge is easy enough to overcome. The first step is to treat FinOps as being about more than just cost monitoring. Think of FinOps as a process that requires constant data-driven action by stakeholders who possess both the financial and the technical expertise necessary to optimize cloud spending without disrupting cloud workload performance or reliability.

When you adopt that mindset, you extend your FinOps observability strategy into a FinOps orchestration strategy, which is what FinOps is really all about.

Kris Bliesner is the Co-founder and CEO of Vega Cloud.

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