How cloud FinOps helped public sector agencies to optimize their cloud spending

Many agencies are having sticker shock at month-end from cloud bills. Why is cloud spending costing more than expected and how can federal agencies apply cloud FinOps to optimize cloud expenditures?

In brief

• Federal agencies rapidly migrated their workloads to cloud environments for increased system capacity, stability and security.
• With performance increases, system owners also expected diminished hosting costs in comparison to previous federal data center expenditures.
• Cloud resources are incredibly easy to initiate for developers, testers and ultimately end users. 

What is cloud FinOps?

FinOps provides disciplined processes to build and execute cloud-transparent financial management that unites business goals within an agency culture. Cloud FinOps is an emerging practice initiated within the commercial sector that is now finding direct relevance and influence in the federal marketplace to unite the efforts of workload owners, infrastructure DevSecOps teams and CFOs.

Organizations without or with limited FinOps processes create ad hoc budgets, forecast using trend data, and are not integrated with DevSecOps teams to create cloud cost forecasts or evaluate discrepancies from forecasted spending. In these organizations and as reported by The State of FinOps Report 2022 , monthly cloud bills can vary by more than 30% per month, whereas successful FinOps programs get costs in check while identifying where to focus agency efforts to optimize cloud spending and limited internal cloud resources.

Understand the roles and scope of the FinOps office

Today, technology is consumed “as a service” and on demand. Most organizations are not set up for and lack the appreciation of how on-demand cloud consumption changes cost management and the impact to streamlined IT budgets.

In the not-too-distant past, many government agencies did not build the costs of operations and maintenance into their budgeting — cloud FinOps helps agencies avoid that same peril with the cloud. Traditional budgeting and accounting processes are no longer fit for the same purpose and need to evolve for dynamic technology spending. 

FinOps is about democratizing cost management by balancing and paying for the cloud services that are most useful and used. The first step with cloud FinOps is to get DevSecOps teams, the chief information officer, the chief financial officer and the Office of the Chief Procurement Organization to collaborate and work together.

In most agencies, there is a lack of communication, continued finger-pointing and limited coordination between multiple tech, operations, project management office and business teams. There is also a disconnection between the overall IT organization budget and the individual cloud spend of individual programs.

The lack of control and visibility across the entirety of an agency’s cloud spending is limited due to disparate acquisition mechanisms, reporting tools and competing budgets. Therefore, building FinOps processes that put humans at the center and define who is responsible, accountable, consulted and informed (RACI) within each step of the process is key to uniting business, finance, and IT and DevSecOps.