5 Reasons FinOps Projects Fail

Embracing FinOps — a strategy for optimizing spending on cloud computing resources — is easy enough. It's not particularly difficult to find or deploy tools that promise to help businesses identify opportunities for reducing cloud spending.

What is difficult, however, is ensuring that FinOps initiatives actually yield the desired results. For a variety of reasons, FinOps projects can go awry, or at least fall short of delivering real cost savings.

FinOps success, then, hinges on understanding what not to do when embarking on a cloud cost optimization journey. To provide guidance, this article walks through the top five reasons that lead to FinOps failure. It also explains how to avoid these pitfalls in order to launch FinOps projects that deliver fully on their potential value.

1. Lack of Cross-domain Expertise

FinOps is a challenging discipline because it requires expertise in two distinct areas: finance and technology. However, because analysts who can bring both skill sets to the table are in short supply, many businesses turn to finance teams to direct FinOps initiatives.

Those teams understand issues like how to track spending. But they usually don't understand the technical nuances of cloud computing. They may not know the difference between a container and a serverless function, for example, or how a database differs from an object storage service. As a result, they struggle to make financial recommendations that align with technical needs.

Related:5 Out-of-the-Box Approaches to Cutting IT Spending

To do FinOps effectively, businesses need insights that cover both the financial and the technical sides of the equation. This requires bringing finance and technical teams together — or, better, drawing on the expertise of those rare analysts who do understand the financial as well as the technical dimensions of the cloud.

2. Focusing on Narrow Optimizations

A related FinOps challenge is that businesses often struggle to understand the full set of opportunities where they can optimize their cloud spending. Because finance teams don't usually understand the needs of technical teams, and vice versa, FinOps initiatives sometimes end up focusing on relatively narrow cost-savings measures — such as "rightsizing" workloads, which can save some money on a case-by-case basis, but which is often not enough on its own to deliver all available cost savings.

This narrow focus means that FinOps projects miss larger opportunities, like the ability to negotiate discounted cloud service pricing with cloud providers. The latter strategy can deliver dramatic cost savings that benefit every workload that the business operates, without the tedium of having to analyze each workload's unique requirements in order to rightsize it.

Related:6 Tips for Controlling Your Cloud Costs in a Recession

To put this another way, FinOps success is about thinking big. Small-scale optimizations help, but to get the most out of FinOps, businesses need to be as ambitious as they reasonably can about where to implement cost savings.

3. Being Afraid to 'Rock the Cloud Boat'

The typical business has spent the better part of the past decade making massive investments in the cloud. Now that its journey has matured, it hesitates to make changes that might shake its cloud strategy up too much.

From a FinOps perspective, this type of reluctance to make major modifications is problematic. Businesses that are afraid to rethink their cloud architectures or force their cloud providers into renegotiating enterprise service agreements are leaving money on the table.

Cloud environments, and the financial agreements behind them, are never set in stone. FinOps success requires thinking as creatively as possible about how to pursue cost savings, even in situations where changes feel unorthodox.

4. Overly Technical FinOps Tools

There are a variety of tools on the market today that help measure cloud spending. Some can even make automated recommendations about how to save money by rightsizing workloads or changing to different pricing models.

Unfortunately, most of these tools were designed by technical teams, for technical teams. Deploying and using them requires fairly deep knowledge of how cloud services work, how cloud providers bill for those services, and so on.

As a result, it takes a long time for finance teams who lack deep technical expertise to deploy and make full use of these tools. This in turn means that it may be a year, or longer, before investments in FinOps tools begin yielding results at the typical business. Meanwhile, organizations continue to waste money while they wait for their FinOps tools to begin driving actual change.

This is another reason why FinOps requires expertise from the domains of both finance and technology. When your analysts have the technical skills necessary to use FinOps tools, they can begin deriving value from those tools much faster and more easily.

5. Limited Executive Support

Sometimes, the biggest hindrance to FinOps success is lack of buy-in from executives.

This might seem surprising given that one of the focus areas of FinOps is about saving money, and most executives like saving money. However, the problem that arises at some organizations is that executives view FinOps as being only about lowering bills. They ascribe limited value to FinOps, and they don't treat it as a priority.

The reality is that FinOps is more than just a way to lower bills. By allowing businesses to reduce cloud spending without reducing the quality or scale of their cloud services, FinOps serves as an engine of business innovation, investment, and growth. When executives realize this, they are much likelier to get fully on board with FinOps.

Conclusion

Ultimately, the single most important factor in FinOps success is having the right mindset. Businesses should think of FinOps as a wide-reaching, innovative endeavor that impacts all parts of the organization, and that can be pursued in a variety of creative ways. This perspective helps to ensure that businesses treat FinOps as being about much more than just measuring cloud spending or cost-optimizing individual workloads — viewpoints that prevent FinOps initiatives from realizing their full potential.

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