Using FOCUS to Standardise FinOps for Multi-Cloud

Introduction to Multi- Cloud

Since more organizations are turning towards multi-cloud environment, the problem of Cloud Finance is more emerging than ever before. However, using multiple cloud providers’ flexibility and scalability bring issues in costing, budget, and financial responsibilities. That is where the concept of Financial Operations or FinOps steps in. FinOps is the method of uniting finance, technology and business to work on the cloud. To consistently tackle many of these challenges across different cloud environments., the FinOps process is guided by the FOCUS framework. Now we will look at how FOCUS is used to understand and standardize FinOps when managing multi-clouds. 

Understanding FinOps 

To begin with, let’s understand first what FinOps is. Any environment in the cloud, not limited to EC2 instances, FinOps is a system, processes, and tools to optimize cloud financial operations. It focuses on cross-functional teamwork, when it comes to managing the cloud cost in relations to finance, engineering, and the product team. FinOps improves visibility into cloud costs, budgeting, and resource utilization decision-making.

Fig 1 : FinOps Principles

Challenges in Multi-Cloud FinOps 

Managing finances across multiple cloud platforms introduces various challenges: 

1. Cost Visibility: Those specific cloud providers' prices vary, and many are opaque, making it challenging to track overall expenses.

2. Budgeting and Forecasting: Being erratic, the regularities make accurate budgeting a challenge because scale and usage, as well as billing cycles, may differ.  

3. Cross-Functional Collaboration: Finance and engineering are usually two different functions and therefore it may be very difficult for these two to work hand in hand if they have different objectives and key performance indicators.

4. Resource Optimization: Sometimes there are idle assets in one or more clouds, or some assets are extravagantly provided, and their identification is a complex process.

5. Compliance and Governance: The examination of so many different cloud environments and problems of financial compliance can be quite complicated and time-consuming if there are no unified criteria among them.  

The Need for Standardization in Multi-Cloud 

Every provider employs a unique set of pricing strategies, cost modes and reporting structures, therefore making it difficult to get an overall vision of the expenditure incurred. Therefore, Standardization becomes critical: 

1. Enhanced Cost Visibility: A unified approach provides for a more accurate identification of cloud costs and their subsequent reporting. 

2. Improved Budgeting and Forecasting: It is important for organizations to maintain standardized approaches that will enable them to come up with workable budget across multiple cloud systems.

3. Cross-Functional Alignment: It provides a consistent approach, helps to integrate the work of the finance team and engineering teams together into a unified goal and key performance indicator system.

4. Streamlined Resource Optimization: The major advantage of standardization is that it allows organizations to review the various platforms and see cost saving measures.

5. Regulatory Compliance: Integrated operations of finances make it easy to deal with compliance and governance standards within an organization.

6. Scalability: In a larger organization, it is possible to set up a standardized FinOps model so that adding a different cloud provider or service is easily done.  

Introducing FOCUS: (FinOps Open Cost & Usage Specification) 

The FOCUS framework or the FinOps Open Cost & Usage specification offers a set of practices for the management of multi-cloud FinOps. Its main goal is to standardize communication and approach to measure and define costs related to cloud environments.

Fig 2: FinOps Open Cost & Usage specification

Key Components of FOCUS 

1. Open Specification: FOCUS is deliberately developed as an open specification and can be implemented by any organization regardless of its type and size. Openness fosters cooperation and knowledge of how to do things better between the FinOps community members.

2. Cost Visibility: FOCUS enhances broad cost visibility because it prescribes the way costs are recognized and recorded. This in turn makes it easier to track spending more effectively across multiple platforms within the cloud.

3. Usage Metrics: This framework integrates usage metric as one of the criteria that need to be constantly measured. Thus, having a consistent and coherent manner of tabulating the data usage, the management makes wiser decisions on resource allocation.

4. Collaboration: Minimizing costs and time is achieved through close collaboration of the finance, engineering, and operations departments through FOCUS. It is better to find out major keys that everyone has an understanding about the cost and usage or at the least cloud costs so that collective efforts can be made for effective management of expenditure on cloud.  

Implementing FOCUS in Your Organization 

To effectively implement the FOCUS framework, organizations should follow these structured steps: 

Step 1: Assessment and Planning: When implementing FinOps the first step is to evaluate your current FinOps plan. Find areas where cost visibility and usage metrics are least provided in processes and tools. FOCUS should be incorporated to match the needs of the organization, and the plan should be formulated for its implementation. 

Step 2: Establish Open Specifications: Conduct the activities to implement the open specifications described by FOCUS. This is to ensure that the teams working on cloud are fully informed on the language and approach of the evaluation of cost and cloud usage. It is important in order to ensure that there is cohesion between various teams and subgroups.  

Step 3: Integrate The Tools: Whenever you want to select a tool, make sure it is compatible with the FOCUS framework and all the cloud providers. Having tools that can enable tagging, tracking, and reporting with the aid of a successful implementation of a solid tracking system will guarantee the tracking of data that has been collected. 

Step 4: Standard Reporting Processes: When it comes to reporting, the company should standardize this area and provide written policies on how cost and usage of the cloud should be reported. It is equally important that all the stakeholders are familiar with these processes and that they are featured in the organization’s financial reporting processes. 

Step 5: Train and Educate Teams: The next course of action should be to organize training to ensure that all your teams comprehend what the FOCUS model entails and the effects it will have on cloud financial management. 

Step 6: Monitor: Another focus of this plan is on the constant assessment of the rate of successful FOCUS implementation. The feedback be taken commonly from regard stakeholders to enhance the processes as well as performances. 

FOCUS Framework

The FOCUS framework emphasizes clarity and alignment in financial operations across multiple cloud environments.

Performance Measurement

Establishing KPIs and metrics to assess the effectiveness of FinOps strategies aids in continuous improvement.

Benefits of Adopting FOCUS 

Implementing the FOCUS framework can lead to several significant benefits for organizations:   

1. Increased Cost Efficiency: When a specific structure of cost capture and report is implemented, it will be easier for an organization to manage its costs so that general expenditure is minimized.
2. Enhanced Decision-Making: By providing teams with more information about the costs and usage of a product or service they can better allocate resources efficiently.
3. Improved Accountability: FOCUS makes sure that every team is practicing Cloud cost control, and in the end, every team becomes responsive.
4. Greater Agility: FOCUS allows organizations to respond more flexibly to emerging trends in cloud costs, and the consumption patterns, which in turn facilitates long range planning and forecasting.
5. Strengthened Collaboration: FOCUS encourages cross-functional harmony between the finance, engineering, and operations departments with programmatic goals and directions for cloud financial management.
6. Enhanced Risk Management: Major financial risks relating to cloud adoption can be managed when SOPs and KPIs are developed; this approach helps to recognize these risks at an early stage.

7. Data-Driven Culture: Implementing FOCUS creates a culture of focus on financial data to drive decision making instead of relying more on feelings or intuitions.