FinOps 전략 수립 및 실행

“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, establishes financial transparency and accountability, and maximizes the value of cloud business.

Establishing a Cost Optimization Process

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

We will examine the elements of the FinOps Framework to understand the key concepts and processes of cloud cost optimization.

FinOps Framework: Principles

The principles presented by the FinOps Framework are as follows.

• Team Collaboration

• Since cloud costs are incurred per resource and per hour, the Finance, Engineering, Product/Service, and Business teams must collaborate frequently.
  • Each team collaborates to continuously improve efficiency and drive innovation.

• Make decisions based on cloud business value

  The economic efficiency per unit and metrics better reflect the impact on the business than total spending.

  • Consider the trade-offs between cost, quality, and speed.
  • We view the cloud as a driving force for innovation.

• Assign responsibility for cloud usage to all entities

• Responsibility for usage and costs extends to sub-organizations or business units, and engineers are responsible for costs from architecture design through to current operations.
  • Each functional team and product team manages cloud usage within the scope of their department’s budget.
  • Distributes decision-making regarding cost-efficient architecture, resource usage, and optimization to each department.
• Technical teams should consider cost as a new efficiency metric from the early stages of the software development life cycle.

• FinOps Data Available in Real Time

  Cost data is processed and shared immediately upon creation.

  • Securing real-time data visibility increases cloud utilization.
  • Rapid, continuous feedback on data contributes to deriving efficient results. Information about cloud spending costs is provided to all departments of the organization in real time.

• Create, monitor, and improve real-time financial forecasts and plans.
  • Perform trend and fluctuation analysis to understand the causes of cost increases.
  • Promote best practices and celebrate achievements through internal team benchmarking.
  • Evaluate your company’s performance by benchmarking against industry peers.

• Dedicated team leads FinOps

  When each department is responsible for its own area, the dedicated team serves to recommend, disseminate, and support best practices.

  • Management supports FinOps, its practices, and processes.
  • Centrally manage rates, commitments, and discount optimization to leverage economies of scale.
  • Engineers and operations teams focus on optimizing usage in their respective environments and do not get involved in discount negotiations.

• Leverage the cloud’s variable cost model

  • View the cloud’s variable cost model as an opportunity to deliver greater value, not a risk. Predict, plan, and purchase capacity just-in-time when needed.
  • Establish agile iterative plans rather than static long-term plans.

• Don’t just tidy up the system sporadically; achieve cloud optimization through proactive system design and continuous adjustment.

FinOps Framework: Persona

To implement FinOps, various stakeholders within the organization, i.e., personas, must collaborate with the FinOps team.

FinOps activities are not performed solely by the FinOps team.

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

The following table outlines the key FinOps entities, associated organizations, and roles.

FinOps Framework: Phase

FinOps performs framework tasks while iterating through the three phases of Inform, Optimize, and Operate.

Share with the FinOps stakeholders and coordinate feedback.

Inform: Visibility and Allocation

Providing FinOps standard processes and continuously updating based on execution

This step involves identifying data sources, allocating and analyzing data, and creating a report.

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

Accurately allocating cloud spending by tags, users, or business rules enables accurate reporting, allowing business and finance teams to maximize ROI within budget and forecast spending and carbon costs.

Inter-team benchmarking provides useful metrics for evaluating organizational operational efficiency.

Additionally, by correlating cloud cost data with sustainability, efficiency, utilization, and performance benchmarks, you can derive Key Performance Indicators (KPIs) and unit metrics for your 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: Cost and Usage

The Optimize phase identifies opportunities to improve cloud efficiency by leveraging the data and capabilities gathered during the Inform phase.

In this phase, you leverage resource optimization tools provided by cloud vendors to right-size low-utilization resources, apply modern architectures, manage workloads, and eliminate unnecessary resource waste.

It also includes visibility, analysis, and reporting features to enhance the purchasing and management of pricing models, such as commitment discounts and Cost Savings.

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

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

Operate: Continuous Improvement and Usage

In the Operate phase, you implement changes to embed FinOps within the organization based on the data and capabilities acquired in the Inform and Optimize phases.

This phase includes establishing cloud governance policies, compliance monitoring, developing training programs aligned with organizational goals, establishing team guidelines and automation policies, and empowering individuals.

To succeed in FinOps, engineering, finance, and business teams must jointly take continuous and incremental actions based on data generated in the Inform phase.

Additionally, select the optimal opportunities identified in the Optimize phase and build a culture of accountability for actions taken across the organization.

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

This enables you to continuously improve your organization’s FinOps operations.

FinOps Domains and Activities

The domains of the FinOps Framework are the fundamental business outcomes that organizations 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.

This area collects and analyzes cost-related data, detects anomalies, and manages them.

The next domain is Business Value Quantification.

This area quantifies the potential costs and value of the business and analyzes economic viability through benchmarking.

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

In this area, you measure the usage of running cloud workloads and establish and execute plans to optimize costs.

The last one is FinOps Execution Management.

Build a culture and organization within the organization that executes cloud strategy through FinOps strategies and processes.

FinOps Maturity

FinOps activities are performed iteratively, thereby improving the maturity of processes, domains, and activities.

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

Perform FinOps by quickly taking the necessary actions within a small, limited scope, and then, based on the results of those actions, expand FinOps activities to a larger, faster, and more granular approach.

The table below shows FinOps maturity.

Cost Requirements Analysis

Tasks regarding cost requirements can be derived for each of the FinOps execution phases reviewed previously.

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

The following content outlines requirements for each execution phase.

Inform Phase

Optimize stage

Operate stage

Cost Modeling

In an on-premises environment, you build information systems by investing fixed costs in the initial stage to anticipate demand.

Conversely, in cloud environments, resource costs are incurred based on actual demand, and costs can fluctuate on a monthly, daily, or hourly basis.

Therefore, while leveraging the cloud enhances efficiency and agility, it also leads to greater fluctuations in costs and usage.

As customer demand increases, resources scale up and costs rise, but improving efficiency can reduce the magnitude of cost increases.

The flexible nature of the cloud also impacts costs and forecasting.

Establish plans reflecting changing business requirements and demand, and reflect this volatility in the existing organization’s budget process.

To estimate the cost of new workloads, you should consider cost modeling.

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

Methods for understanding volatility for forecasting include the Business Practice approach and the Data Analytics approach. The items to check for each approach are as follows.

• Business Practice Approach

  • Identify periodic user increase periods, such as peak seasons and holidays
  • Future plans to increase users, such as projects and marketing events
  • Data collection cycle for forecasting

• Data Analytics Approach

  • Check if historical data for periodic user increases is reflected.
  • Check whether historical data for business events is reflected
  • Gap analysis between predictions and actual results
  • Long-term trend forecast

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

The level of granularity may vary depending on the organization’s structure and internal processes, and specific requirements and You will determine the level of granularity based on the organization’s situation.

You can perform cost modeling based on the following example.

• Groups all expenses based on classification criteria.

• Calculates the average expenditure for each group over the last three months.

• Calculates the average value for the same period one year ago.

• Compare the two average values to identify trends and apply growth rates to each group.

• Reflects all future plans.

Share with the FinOps stakeholders and coordinate feedback.

CiO-based Cost Management

CiO is a collaboration platform by Samsung SDS to support FinOps processes.

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

• Platform for enterprise-wide FinOps adoption Providing information, execution guides, and processes for Hybrid, Multi Cloud execution/operation.

• Enhancing collaboration through real-time cloud information sharing and communication Check how resources are being used, for what purpose, and at what scale. Check how much effort the development/operations departments are putting into resource optimization. Check how much cloud costs are being saved at the enterprise level.

• Providing platform value for cost discounts and resource optimization
  Usage pattern-based cost discount and resource optimization recommendation/execution (Short-term) Additional profit sharing for the Enterprise Discount Program through integrated resource management (Long-term)

• Providing FinOps standard processes and continuously updating based on execution Traditional resource management process → Establishment of optimal collaboration process for cloud environments

CiO provides concrete execution strategies and collaboration platforms to advance FinOps to the ’execution’ phase.

Executing FinOps solely by providing actual usage and billing information presents many challenges.

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

You can intuitively and quantitatively grasp the status of cloud resources and cost management through FinOps management metrics.

The results of each indicator item are linked to improvement activities, enabling continuous governance execution.

It is necessary to define the management level reflecting the organization’s current status and systematically perform change management.

A collaboration process among FinOps participants is essential for efficient decision-making.

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

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

Samsung Cloud Platform’s CiO is one of Samsung SDS’s Managed Service offerings. For more information, please refer to Samsung SDS Cloud in One.