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FinOps plan & execution

“FinOps is an operational framework and cultural practice which maximizes the business value of cloud, enables timely data-driven decision making, and creates financial accountability through collaboration between engineering, finance, and business teams.” (FinOps Foundation)

FinOps is an operational framework and cultural practice that, through collaboration among engineering, finance, and business teams, enables timely data-driven decision-making, establishing financial transparency and accountability while maximizing the value of cloud business.

Establish cost optimization process

The FinOps Framework presented by the FinOps Foundation outlines the principles, domains, capabilities, stakeholders, and stages for cost optimization as shown in the figure below.

To understand the core concepts and processes of cloud cost optimization, let’s examine the elements of the FinOps Framework.

Figure. FinOps Framework by FinOps Foundation( https://FinOps.org)

FinOps Framework: Principles(Principles)

The principles presented in the FinOps Framework are as follows.

Team Collaboration
Since cloud services incur costs per resource and per hour, finance, engineers, product/service, and business teams must collaborate continuously. Each team continuously collaborates to improve efficiency and drive innovation.
Decision-making based on the business value of the cloud
Per-unit economic efficiency and metrics reflect the impact on the business better than total spending. Consider trade-offs among cost, quality, and speed. We see the cloud as a driving force for innovation.
Assign responsibility for cloud usage to all parties
Responsibility for usage and cost extends to lower-level organizations and businesses, and engineers are accountable for costs from architectural design through ongoing operations. Each functional team and product team manages cloud usage within their department’s budget limits.
- Distribute decision-making on cost‑effective architecture, resource utilization, and optimization to each department. The technical team should consider cost as a new efficiency metric from the early stages of the software development lifecycle.
Real-time FinOps Data
Cost data is processed and shared immediately upon creation. Ensuring real-time data visibility increases cloud utilization. Rapid, continuous feedback on data contributes to producing efficient results. Information about cloud spending costs is provided to all departments of the organization in real time. Generate, monitor, and improve real-time financial forecasts and plans. We conduct trend and variance analysis to understand the causes of cost increases. Promote best practices and celebrate achievements through internal team benchmarking. We evaluate our performance by benchmarking against peer organizations in the industry.
Dedicated team leads FinOps
While each department is responsible for its own area, the dedicated team serves to recommend, disseminate, and support best practices. The executive team supports FinOps and its practices and processes. We integrate management of fees, contracts, and discount optimization to leverage economies of scale. Engineers and the operations team focus on optimizing usage in their respective environments and do not get involved in discount negotiations.
Utilizing the Cloud’s Variable Cost Model
We view the cloud’s variable cost model as an opportunity to deliver greater value rather than a risk. Predict, plan, and purchase capacity when needed (just-in-time). Establish agile iterative plans rather than static long‑term plans. Do not let irregular pushes force you to tidy the system; achieve cloud optimization through proactive system design and continuous adjustments.

FinOps Framework: Persona(Persona)

To implement FinOps, various stakeholders within the organization, i.e., personas, need to work with the FinOps team.

FinOps activities are not performed only by the FinOps team.

All individuals involved in the use, tracking, management, or direction of cloud utilization are stakeholders in FinOps, and through collaboration within the FinOps Framework, each gains benefits.

The following table shows the core FinOps stakeholders, associated organizations, and their roles.

FinOps stakeholder	role	Subject classification
FinOps practice	FinOps practice serves as a bridge between business, engineering, and finance teams, optimizing cloud usage and maximizing business value through data-driven decision making. Focuses on establishing a FinOps culture and supporting stakeholder teams, providing best practices based on practical knowledge of the FinOps framework’s principles and functions. Also performs a central FinOps dedicated function within the organization.	Core
Executive team	CTO/CIO and other executives focus on strengthening accountability, ensuring transparency, improving team efficiency, and preventing budget overruns	Core
Product/Service	Product managers (PM) and others focus on the value that IT provides to customers and members, and manage the organization’s business and products/services. They operate the business units and, in collaboration with the engineering team, develop applications and systems that create cloud-based digital value.	Core
engineer	When designing and building IT systems in a cloud environment, consider the efficient use of resources and take responsibility for cloud utilization rates Perform activities such as selecting appropriate resource locations, scaling, workload management, removing unused resources, and monitoring spending anomalies Engineering teams that adopt FinOps use cost and resource usage as performance metrics	Core
Finance	The finance officer collaborates with FinOps operations to analyze historical billing data and establishes plans and budgets based on accurate predictive models They also play a key role in cloud provider reports, payments, committed discount purchases, and invoice management	Core
Purchase	The purchasing manager sources and purchases products and services from cloud platform vendors using insights provided by the FinOps team They collaborate with FinOps to ensure contract terms are fulfilled and to manage the purchasing process	Core
ITSM / ITIL	The IT Service Management team collaborates with FinOps practitioners to standardize and streamline IT service operations Improving service quality and reliability, and ensuring that service levels and performance targets are balanced with cloud cost management priorities	Related organization
ITAM	IT asset management team collaborates with FinOps operations to manage IT assets that affect cloud usage Leveraging both parties’ expertise and data, we optimize costs, ensure compliance, and support strategic business objectives	Related organization
Sustainable Management (ESG)	Manage cloud usage to minimize environmental impact, promote responsible use, and maintain a balance between cost-management priorities and sustainability goals	Related organization
Security	Leverage FinOps expertise and insights to optimize cloud security spending, improve IT security financial governance, and strengthen the organization’s cloud security posture.	Related organization
ITFM	IT financial management ensures transparency of IT spending and supports data-driven decision making Cloud and existing IT investments align with business priorities, are cost-effective, and deliver tangible value to the organization	Related organization

Table. FinOps Persona

FinOps Framework: Phase (Phase)

FinOps repeatedly performs the three steps of Inform (notification), Optimize (optimization), and Operate (operation) while carrying out framework tasks.

Inform: Visibility and Allocation

In the Inform stage, activities are carried out to collect and analyze data on cloud costs, usage, and efficiency.

This stage includes identifying data sources, allocating and analyzing data, and then preparing a report.

Through this, each team can acquire the capability to develop metrics that enable budgeting, trend forecasting, KPI establishment, and explaining the business value of cloud spending.

When cloud spend is accurately allocated by tags, users, or business rules, precise reporting becomes possible, and business and finance teams can increase ROI within budget and forecast spend and carbon costs.

Cross-team benchmarking provides a useful metric for evaluating an organization’s operational efficiency.

Additionally, by linking cloud cost data with sustainability, efficiency, utilization, and performance benchmarks, you can derive key performance indicators (KPI) and unit metrics for the organization’s cloud usage.

The cloud possesses characteristics such as on-demand, elasticity, and various price discounts, and organizations must, based on this, establish a data-driven decision-making system and monitor spending in real time, thereby continuously communicating business objectives to each department.

Optimize: Charges and Usage

In the Optimize phase, opportunities to improve cloud efficiency are identified by leveraging the data and capabilities collected during the Inform phase.

In this stage, you use the resource optimization tools provided by the cloud provider to adjust underutilized resources to appropriate sizes, apply the latest architecture, manage workloads, and eliminate unnecessary resource waste.

It also includes visibility, analysis, and reporting features to strengthen the purchase and management of pricing models such as contract discounts and Cost Savings.

In this stage, areas where cloud performance does not align with the organization’s value goals are identified, and cross‑team collaboration is carried out to optimize reporting and management processes based on unit metrics.

Conflicts may arise between optimization directions, but the ultimate goal is for the organization to create more value through cloud investment.

Operate: continuous improvement and usage

In the Operate phase, we implement changes to embed FinOps within the organization, based on the data and capabilities secured during the Inform and Optimize phases.

This stage includes establishing cloud governance policies, compliance monitoring, developing training programs aligned with organizational goals, establishing team guidelines and automation policies, and granting individual permissions.

For FinOps to succeed, engineering, finance, and business teams must collaboratively take continuous, incremental actions based on the data generated in the Inform stage.

Also, you must select the optimal opportunities identified in the Optimize phase and build a culture of accountability for the actions implemented across the organization.

In the Operate phase, we set goals to repeatedly develop strategies and improve workflows, and when necessary, we return to the Inform and Optimize phases to mature activities and introduce new capabilities.

Through this, you can continuously improve the organization’s FinOps operations.

FinOps domain and activities

The domains of the FinOps Framework are the fundamental business outcomes that an organization must achieve through FinOps, and FinOps activities refer to the tasks performed within each domain.

The first domain is about understanding cloud usage and costs.

In this area, we collect and analyze cost-related data, detect anomalies, and manage them.

activity	Explanation
Data Collection Data Ingestion	Collects, transmits, stores, and normalizes data from various sources to create a context‑based dataset that enables comprehensive analysis of cloud usage and costs.
Allocation Allocation	Assign cloud costs to teams and projects within the organization and hold them accountable using users, tags, labels, and other metadata.
Report and Analysis Reporting & Analytics	Analyze cloud data and generate reports to gain insights into usage and spending patterns, identify improvement opportunities, and support decision-making based on cloud resource information.
Anomaly Management Anomaly Management	Detect, identify, alert, and manage unexpected or unpredictable cloud cost and usage irregularities in a timely manner to reduce cost risk in cloud operations.

Table. Activities of the Cloud Cost Understanding Domain

The following domain is business value quantification.

In this area, we quantify the potential costs and value of the business and conduct activities that analyze economic feasibility through benchmarking.

activity	Explanation
Planning & Estimating Planning & Estimating	Estimate and explore the potential cost and value of workloads when implementing a specific model or models in the organization’s cloud environment.
Prediction Forecasting	Generate a model of the expected future cost and value of a cloud system by leveraging statistical methods, past spending patterns, planned changes, and related metrics.
Budget Budgeting	A strategic and ongoing process to set limits aligned with business objectives, monitor and manage cloud spending, and ensure accountability and predictable financial outcomes for cloud-based systems.
Benchmarking Benchmarking	Use efficiency metrics to assess value by comparing cloud optimization across departments within the organization or with peer companies in the same industry, inform decision-making, and align FinOps with business objectives.
Unit Economics Unit Economics	Develop and track metrics that enable understanding of how an organization’s cloud usage and cloud management practices affect the value of its products, services, or activities.

Table. Activities of the Business Value Quantification Domain

The third is the domain of cloud usage and cost optimization.

In this area, we measure the usage of the cloud workloads being performed and develop and implement strategies to optimize costs.

activity	Explanation
Cloud Architecture Design Architecting for Cloud	Design and modernize solutions with cost awareness and efficiency to maximize business value while achieving performance, scalability, and operational goals.
Rate Optimization Rate Optimization	By using contracts, Cost Savings, and other measures, enhance cloud cost efficiency to meet the organization’s operational and budget goals.
Workload Optimization Workload Optimization	Analyze and optimize cloud resources to fit specific usage patterns, while ensuring workloads operate efficiently and deliver sufficient business value relative to cost.
Cloud Sustainability Cloud Sustainability	Integrate sustainability criteria and metrics into cloud optimization so that environmental efficiency balances financial value and cloud optimization decisions align with organizational goals.
Licensing & SaaS Licensing & SaaS	Understand licensing terms, usage rights, and pricing options for each vendor, and plan appropriate usage by avoiding over- or under-licensing. Understand and optimize the impact of SaaS adoption on the organization’s cloud cost structure and value

Table. Activities in the Cloud Usage and Cost Optimization domain

The last is FinOps execution management.

We establish a culture and organization that implement cloud strategy within the organization through FinOps strategies and processes.

activity	Explanation
FinOps Execution Operations FinOps Practice Operations	By continuously implementing FinOps strategies and processes, we operate an effective FinOps team that strengthens FinOps practices and cultivates a culture of responsibility.
Cloud Policy & Governance Cloud Policy & Governance	Establish and evolve policies, controls, and governance mechanisms to ensure cloud usage aligns with business objectives, complies with regulatory requirements, and efficiently optimizes cloud resources.
FinOps Assessment FinOps Assessment	To gain insights into the strengths and improvement areas of FinOps activities, we repeatedly measure and analyze FinOps maturity within the context of the FinOps framework.
FinOps Tools & Services FinOps Tools & Services	Developed criteria and methodology for effectively integrating FinOps tools and services that align with framework capabilities to strengthen FinOps use cases.
FinOps Education FinOps Education & Enablement	Through education, technology development, and practical activities, teams across the entire organization can adopt and deliver FinOps use cases.
Settlement Management Invoicing & Chargeback	By collaborating with the product/service and engineering teams, the finance team develops a cloud settlement model and adjusts cloud cost data and reports to meet budgeting and accounting requirements.
Workload Transition Onboarding Workloads	Coordinate system migrations across or within cloud environments in a manner that provides transparency into cost, usage, and impact, and supports operational objectives.
Collaboration with related departments Intersecting Disciplines	Coordinate activities with related departments (ITAM, ITFM, sustainability, security, etc.) to manage responsibilities that are broader than cloud and integrate them into the organization’s cloud strategy through collaboration with FinOps.

Table. Activities of the FinOps Execution Management domain

FinOps maturity

FinOps activities are performed repeatedly, and through this, the maturity of processes, domains, and activities improves.

The FinOps maturity approach starts small and gradually expands in scale, scope, and complexity.

By taking swift, necessary actions within a small, limited scope and performing FinOps, you can later expand FinOps activities in a larger, faster, and more granular manner based on the results of those actions.

The table below shows FinOps maturity.

Maturity	Characteristic	KPI example
Crawl	There are few reports and tools The measurement results provide only insight into activities Basic KPI measuring the degree of success Basic procedures and policies are defined around activities Major departments within the organization understand the activities but are not actively participating Plan-focused and easily achievable	Minimum 50% allocation Resource commitment compliance rate 60% Difference between forecasted and actual spending is within 20%
Walk	Some departments within the organization carry out activities Difficult operational situations arise, but those cases are treated as exceptions for decision-making All activities are automated and streamlined Operational cases that threaten the organization’s financial stability have been identified and are being addressed Setting success goals/KPIs for mid- to senior-level	Minimum 80% allocation Resource commitment application rate 70% Difference between forecast and actual spending within 15%
Run	All teams within the organization carry out activities Solve high-difficulty practical cases Top-tier success goals/KPI Preference for automation	Minimum 90% allocation Resource commitment compliance rate 80% The difference between forecasted and actual spending is within 12%

Maturity

Characteristic

KPI example

Crawl

There are few reports and tools

The measurement results provide only insight into activities

Basic KPI measuring the degree of success

Basic procedures and policies are defined around activities

Major departments within the organization understand the activities but are not actively participating

Plan-focused and easily achievable

Minimum 50% allocation

Resource commitment compliance rate 60%

Difference between forecasted and actual spending is within 20%

Walk

Some departments within the organization carry out activities

Difficult operational situations arise, but those cases are treated as exceptions for decision-making

All activities are automated and streamlined

Operational cases that threaten the organization’s financial stability have been identified and are being addressed

Setting success goals/KPIs for mid- to senior-level

Minimum 80% allocation

Resource commitment application rate 70%

Difference between forecast and actual spending within 15%

Run

All teams within the organization carry out activities

Solve high-difficulty practical cases

Top-tier success goals/KPI

Preference for automation

Minimum 90% allocation

Resource commitment compliance rate 80%

The difference between forecasted and actual spending is within 12%

Table. FinOps Maturity

Cost Requirements Analysis

Tasks concerning cost requirements can be derived for each FinOps execution stage discussed earlier.

The ultimate goal is to reduce total costs through cost optimization, but tasks and task objectives can be defined for each implementation stage to achieve this.

The following outlines the requirements for each execution phase.

Inform phase

Requirements	Explanation
Map expense data to the business	Link expenditure data to the organizational structure to meet the analysis needs of finance, business, and engineering teams.
Showback and Chargeback Management	Assign expense responsibility to each department and connect it to the internal system.
Budget and forecasted cost confirmation	It should be possible to use available data to predict cloud usage across multiple projects and control the budget.
Establishing tag rules and compliance measures	To prevent arbitrary tagging, quickly establish tag rules and apply them to resources.
Allocate shared costs fairly	Allocate the costs of services and support services shared by all teams in an appropriate proportion.
Dynamic calculation of custom rates/depreciation expenses	Commitments and discounts must be reflected in all cost data.
Trend and deviation analysis	To differentiate the causes of expenditures, costs must be viewable from time-based and resource-based levels up to the project level.
Creating assessment forms and benchmarking	Developed an assessment form to benchmark project teams on cost, speed, and quality optimization.
Table. FinOps Phase-wise Cost Requirement Analysis - Inform Phase

Optimize stage

Requirements	description
Check for abnormal signs	It must be able to detect abnormal usage spikes, including checking cost thresholds.
Identify and report low-usage services	It must be able to identify resources that are unused or have low utilization.
Central Management of Reserved VMs	Review the organization’s entire cloud portfolio and manage centrally to enhance the effectiveness of committed discounts.
Comparison of Pricing and Workload Placement	Review infrastructure requirements and optimize workload placement to reduce cloud costs.
Table. FinOps stage-specific cost requirement analysis - Optimize stage

Operate stage

Requirements	Explanation
Provide expense data to stakeholders	Provide periodic cost data so that all departments can understand cloud spending. Automate to enable report generation and utilization.
Cultural change aligned with the goal	You can receive training and authority to understand, explain, and collaborate with multiple teams to drive innovation.
Appropriately sized server type	The engineer applies the recommendations derived in the Optimize phase.
Cloud usage governance and control	Continuously assess the agreed criteria for selecting which type of cloud service to use.
Continuously improve efficiency and innovation	We implement a process that continuously and iteratively refines purpose and goals to achieve better business performance.
Resource Optimization Automation	A well-trained team provides a feature that programmatically detects required changes for incorrect resource sizes and automatically cleans up underutilized resources.
Integrate recommendations into the workflow	Allow the Application owner to check via the FinOps management tool instead of having to log in each time to view the recommendations.
Policy-based tag cleanup, storage modification cycle policy	Organize tags using tag policies. Create a policy-based storage lifecycle so that data is automatically stored in low-cost storage.

Table. FinOps stage-by-stage cost requirement analysis - Operate stage

reference

Showback It is the process by which an organization tracks cloud costs and communicates them to internal departments or business units. It is used to provide transparency and raise awareness of how many resources or services are being consumed across various departments, even without actually charging costs.
Chargeback It is the process of allocating and billing actual cloud costs to the respective internal department or business unit. Issue cloud cost invoices for departmental consumption based on predefined rates or cost models.

Cost modeling

In an on-premises environment, demand is forecasted, and fixed costs are invested at the early stage to build the information system.

In contrast, in a cloud environment, resource costs are incurred based on actual demand, and the costs can vary on a monthly, daily, or hourly basis.

Therefore, using the cloud improves efficiency and agility, but the variability of cost and usage also increases.

When customer demand increases, resources also scale up, leading to higher costs, but if efficiency improves, the cost increase can be reduced.

The cloud’s flexible characteristics also affect cost and forecasting.

It is necessary to develop plans that reflect changing business requirements and demand, and to incorporate this volatility into the existing organization’s budgeting process.

To predict the cost of a new workload, cost modeling must be considered.

Cost modeling is the process of setting goals with FinOps stakeholders through financial analysis based on an understanding of cloud costs, and identifying cost optimization opportunities.

The methods for identifying volatility for forecasting include a Business Practice approach and a Data Analytics approach, and the items to check for each approach are as follows.

Business Practice approach
- Identify periods of periodic user increase, such as peak seasons and holidays.
- Future plans to increase users, such as projects, marketing events, etc.
- Data collection cycle for forecasting
Data Analytics approach
- Verify whether past data of periodic user growth is reflected
- Check if past data is reflected in the business event
- Gap analysis between predictions and actual results
- Long-term trend forecast

Next, we need to segment the data to define costs.

The level of granularity can vary depending on the organization’s structure and internal processes, as well as specific requirements and The granularity level is determined according to the organization’s circumstances.

Through this, you can perform cost modeling based on the following example.

Group all expenses according to the classification criteria.

Calculate the average expenditure over the past three months for each group.

Calculate the average value for the same period one year ago.

Compare the two averages to identify trends and apply growth rates to each group.

Reflect all future plans.

Share with the FinOps stakeholders and align opinions.

CiO-based cost management

CiO is Samsung SDS’s collaboration platform designed to support FinOps processes.

This platform supports real-time information sharing, inter-team communication/collaboration, and immediate execution.

Enterprise-wide FinOps Adoption Platform Providing information, execution guides, and processes for Hybrid and Multi-Cloud execution/operation.
Activating collaboration through real-time cloud information sharing and communication Confirm the purpose, method, and scale of resource usage. Verify how much effort the development/operations department is putting into resource optimization. Check how much cloud cost reduction is being achieved at the enterprise level.
Providing platform value for cost discount/resource optimization Usage pattern-based fee discount and resource optimization recommendation/execution (Short-term) Additional profit sharing (Long-term) of the Enterprise Discount Program through integrated resource management
Providing FinOps standard processes and continuously updating execution-based implementations Traditional resource management process → Establishing optimal collaboration processes for cloud environments

CiO provides concrete execution strategies and a collaboration platform to advance FinOps to the ‘execution’ stage.

Executing FinOps is challenging when only actual usage and cost information are provided.

Accordingly, CiO defines management metrics and processes for performing FinOps and supports their execution.

Question	description
How effectively are resources being used?	Are you using resources at the appropriate scale? (Rightsizing execution) Are you managing long‑term unused resources? (Unused Resource Identification execution) Are you managing resources that are used only at specific times? (Scheduling execution)
How well are you executing resource optimization?	Are you executing resource optimization according to the established criteria? Are you reviewing resource optimization targets promptly and executing them?
How aggressively have you configured cost efficiency?	How much are you applying the commitment discount services provided by the CSP? (Reserved Instance or Savings Plans, etc.)
How well are we executing cost efficiency?	Are you properly managing the fulfillment rate of the CSP’s commitment discount services? (Reserved Instance or Savings Plans, etc.)

Table. FinOps management metrics

Through FinOps management metrics, you can intuitively and quantitatively understand the status of cloud resources and cost management.

The outcomes of each metric item are tied to improvement activities, allowing for continuous governance.

It is necessary to define management levels based on the organization’s current state and to systematically execute change management.

For efficient decision-making, collaboration among FinOps participants is essential.

The above figure shows the process established by applying FinOps’s basic process Inform → Optimize → Operate.

To ensure that the process defined in this way can be continuously executed and managed, systematic systematization is required.

The CiO of Samsung Cloud Platform is one of Samsung SDS’s Managed Service offerings, and for more details, please refer to Samsung SDS Cloud in One.