By Madhan Raj J
India’s Public Cloud Services Market grew at US$3.8 Billion in H1 2023, and IDC expects the market to reach US$17.8 billion by 2027. India is experiencing a significant shift in the way businesses approach cloud services. The cloud adoption is driven by the need for digital transformation, scaling businesses in line with market growth, and drive innovation.
But as per an industry report, 84% of respondents of global enterprises have challenges in managing cloud cost. This is mostly due to inaccurate budget forecasts, inefficient cloud architecture, and the complexities of multi-cloud environments. These enterprises have established cloud FinOps as a practice or discipline to align the cloud adoption journey with the business and technical outcomes.
Indian enterprises are uniquely positioned to achieve cloud-led transformation successfully on their first attempt by learning from global experiences and establishing Cloud FinOps early in the journey, a practice reshaping cloud financial management. Cloud FinOps fosters financial accountability throughout an organization’s cloud journey, ensuring strong linkage to the business value created, optimal resource utilization, precise forecasting, and judicious budget allocation. With cloud, the cost model changes from traditional capital expenditure to consumption-based model in the IT budget, a transition that Indian businesses must embrace for sustainable cloud success.
The Essence of Cloud FinOps
Cloud FinOps serves as a robust framework for cloud finance management, aiming to align the goals of business, finance and technology teams. By prioritizing financial accountability, it emphasizes organizations to create a journey in cloud which focuses on business value delivering competitive advantages. Importantly, Cloud FinOps is not merely about adopting new tools or processes; it entails a cultural shift that must permeate all levels of an organization, from the business and IT leaders to business users and developers. FinOps as an extended governance function, is a metric of success for Chief Information Officers, with the entire business and IT teams playing active roles in its implementation.
The basics of Cloud FinOps
Cloud FinOps practitioners focus on cost allocation, visibility, accounting, forecasting, and optimization. Their strategy is to “Make-Measure-Master” the cloud economics:
Make cloud FinOps a strategic priority by developing a robust implementation framework. The cloud finance management is an independent dedicated team working under the CIO and finance. The framework defines the cost accounting structure and cost allocation models to various business portfolios and includes policy, standards, guardrails, and tooling to implement cost visibility.
Measure includes identifying and reporting relevant metrics. Providing portfolio teams with the right level of metrics and analysis on cloud consumption brings a clear understanding of resource usage for business workloads and drives optimization opportunities.
Master the Cloud FinOps Maturity Model by building a culture of cost forecasting, accountability and continuous optimization to align with business value created.
Driving FinOps change management and maturity
An effective cloud adoption strategy, be it single cloud or strategic multi cloud, must align technology with business priorities and more importantly it should maximize the potential value of the services while minimizing costs. But not all organisations have the same maturity level when it comes to managing their cloud environments.
At a basic level, enterprises need to build their FinOps mindset with cloud cost gatekeeping and resource tagging measures. A primary reason for cost creep is the lack of understanding of who is accountable for each of resources on cloud. Develop visibility across all cost drivers and establishing basic governance mechanisms.
At the next level, organizations must enable budgeting for each of the business service lines and implement chargeback mechanisms.
Later enumerate the basic level of optimization like rightsizing, automating switch-off times for workloads that don’t need to run continuously, and leverage pricing model like reserved instances optimally.
Build on this momentum by optimizing architecture, processes and tools with more cloud native approach of being truly dynamic and elastic to business workload needs.
FinOps needs to be part of the organizational culture with teams aware and aligned with the cost accountability. Rigorous financial management, coupled with a clearly defined strategy and execution, will ensure that organisations realize the true benefit of cloud technologies.
Conclusion
While there is no one-size-fits-all solution for maximizing the value realized with cloud, partnering with a proficient cloud FinOps provider will ensure tangible benefits. Under dynamic market conditions, as Indian enterprises look to enhance efficiencies with cloud technologies, they need be optimal in operations including cloud cost with FinOps practices. Already, many organizations in India have begun integrating FinOps into their operations, and this trend is expected to grow as businesses strive for greater cloud efficiency and value realization.
AUTHOR:
Madhan Raj currently leads the cloud solution strategy at Infosys Cobalt and is responsible for conceptualization and creation of solutions to help enterprise customers create business value with technology. He has a cumulative experience of over 30 years and 20+ years at Infosys in various technology leadership roles. He has led large transformation projects of population scale in India, winning the “National award for e-Governance” in 2011, and the views expressed in this article are his own.
Madhan holds a bachelor’s degree from College of Engineering Guindy and master’s from IIT Madras in electrical engineering.
