FinOps

FinOps is an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance, technology and business teams to collaborate on data-driven spending decisions.

1Insights.
Harness the power of Cloud Forecast Lens to align disparate data sources, providing a unified view of anticipated cloud expenses. Drive cost improvement and resource allocation to bolster growth.

2Forecasting.
Leverage Cloud Forecast Lens for dynamic, team-driven forecasting, boosting transparency and strategic planning. Utilize shared insights for effective cost control, aligning cost management with business objectives.

3Team Allocation.
Foster a culture of ownership and financial responsibility through clear cost allocation with Cloud Forecast Lens. Assign cloud expenses to the appropriate teams, driving a sense of accountability and alignment with business goals.

Measuring Unit Costs
Managing Shared Costs
Forecasting
Data Ingestion & Normalisation
Cost Allocation (Metadata & Hierarchy)
Data Analysis & Showback

Measuring Unit Costs
Forecasting
Budget Management

Workload Management & Automation
Resource Utilization & Efficiency
Data Analysis and Showback

Managing Shared Costs
Establishing FinOps Culture
Chargeback & Finance Integration
Budget Management
Intersection of FinOps & TBM

Measuring Unit Costs

Many organizations are using Unit Economics to communicate value delivered by IT spend. Metrics like application cost per customer or support desk cost per ticket help uncover utilization, drive profitability and help get the best deals from your vendors.

Using YäRKEN you can accurately calculate the unit costs of all your IT Solution Offerings. Solution Offering costs can be distributed to business units or products, allowing you to see your Unit Costs based on real consumption metrics.

Managing Shared Costs

Allocating the cost of shared platforms to the applications, products & services they support enables informed decision-making through product owners understanding how their behavior drives shared cost allocation and shared platform owners understanding how their application is being consumed.

Shared cost allocation in YäRKEN can range from assumptive even spread to consumption-based allocation. These strategies are managed and maintained in a consistent manner using automated rules.

YäRKEN also supports exposing shared costs as a standalone service. This is particularly helpful when shared costs come from a centralized budget.

Forecasting

Forecasting IT spend has become increasingly important with the move to Cloud because of its elastic nature and engineers' ability to initiate workloads without procurement. Forecasting for Cloud requires a collaborative effort and YäRKEN provides the workflow to facilitate the process.

YäRKEN supports trend-based & rolling forecasts. A forecast can be pushed forward based on trend. Technical teams can supplement this and adjust their forecasted spend manually to consider any new projects or changes they anticipate.

Team forecasts are compared to actual spend and in a timely manner and variances can be quickly investigated and re-forecasted. To encourage continuous improvement, forecast variance is compared across teams on a leaderboard.

Data Ingestion & Normalization

Effective IT cost management requires the consolidation of a wide range of diverse data sources to a unified standard based on the requirements of business, reporting, cost allocation and cost optimization.

YäRKEN makes this process seamless through integration with multiple data sources, including reports from Cloud providers.

Using TBM and FinOps standards, Cloud costs are automatically aligned to TBM Cost Pools and Towers and ready to be allocated to the IT Services they support.

Ingestion frequency can match the requirements of the business and the granularity is configurable.

Cost Allocation (Metadata & Hierarchy)

With the amount of data we have on Cloud and IT spend, it is important to employ a reporting mechanism in which the data can be analyzed and ready to answer key business questions.

Cloud-native tools provide granular cost and usage data which is used as a base in YäRKEN to create insights and reports. With YäRKEN, you can supplement Cloud data with supporting costs such as labor or licenses which are not billed through the Cloud providers. By using a cloud-agnostic taxonomy like TBM, this allows you to build out a more complete Cloud or total IT cost database which enables reporting on fully-loaded service costs.

Data Analysis and Showback

With the amount of data we have on Cloud and IT spend, it is important to employ a reporting mechanism in which the data can be analyzed and ready to answer key business questions.

Cloud-native tools provide granular cost and usage data which is used by YäRKEN to build out the reporting cubes. With YäRKEN, you can supplement this with any supporting costs such as labor or licenses which do not come from the Cloud providers. By using a cloud-agnostic taxonomy like TBM, this and allows you to build out a more complete Cloud or total IT cost database which enables reporting on fully-loaded service costs.

Budget Management

Collaboration is key when it comes to Budget management. Budgeting is typically the responsibility of Finance but knowledge of planned projects, usage and pricing usually sits with technical teams. YäRKEN IT Planning has a workflow to facilitates collaboration between these roles to budget more efficiently and accurately.

Costs already ingested and allocated in YäRKEN can be used to quickly build out a future year’s base budget. Budget requests and approvals are managed centrally in the platform without the need of manual spreadsheets.

As spend is ingested and compared against budget, alerts and insights give timely feedback into problem areas before they become burdensome.

Intersection of FinOps & ITFM/TBM

TBM & FinOps disciplines both focus on IT transparency, cost optimization and alignment of spend to business objectives. There are differences in methodology but ultimately both are built around maximizing the business value of your IT investments.

While FinOps is Cloud specific, TBM supplements this as it addresses full IT spend. This enables organizations a gain a more holistic view of their Cloud environment through not only viewing Cloud provider costs, but also adding in labor, software & management costs.

Both disciplines can be successful on their own but when brought together, the top-down view of TBM complements the bottom-up view of FinOps to enable more informed decision-making and better outcomes.

Chargeback & Finance Integration

Chargeback extends the showback capability to give Finance the tools they need to charge IT costs back to Business Units who consume them.

Having full cost transparency of IT services and using real consumption data to allocate spend to Business Units or departments, ensures the YäRKEN showback process is defendable. This creates the basis on which Chargeback can occur. A chargeback report can be produced in YäRKEN which can be used by Finance to post transactions to the Finance system’s P&L.

Establishing FinOps Culture

Collaboration and accountability stand as pivotal elements in effectively instilling the FinOps culture within an organization.

YäRKEN enhances collaboration by allowing spend and value to be expressed at various levels throughout the organization on a centralized platform in a timely and easily accessible manner.

Ownership and accountability are driven through allocation of IT spend to the resources or departments responsible. The advanced allocation and data engine ensures the results are defendable.

Managing Commitment Based Discounts

Cloud Service Providers encourage customers to commit to their resources by providing discounts which can be spend-based or resource usage-based. This allows customers to get better rates than on-demand rates by giving up some flexibility in resource usage. Organizations require careful planning, accurate forecasting and knowledge of future work to set the commitment at the correct level.

Workload Management & Automation

Workload Management & Automation focuses on running resources only when they are needed, and creating the mechanisms to automatically adjust what resources are running at any given time. This Capability is intended to give FinOps teams the ability to match supply to demand most efficiently, and effectively optimize cloud usage through measurement of workload demand and provisioning capacity dynamically. -FinOps Foundation

YäRKEN provides links into Cloud-native tools to manage workloads and automation

Resource Utilization & Efficiency

In context to FinOps, resource utilization is about ensuring there is sufficient business value for the cloud costs associated with each class or type of resource being consumed. It is necessary to observe a resource’s utilization over time to understand if the performance, availability or other quality metrics are of value for the expense incurred. - FinOps Foundation

YäRKEN provides links into Cloud-native tools to manage resource utilization.

FinOps is an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance, technology and business teams to collaborate on data-driven spending decisions.

Empowering Teams to increase Cost Predictability, Preventing Bill Shock.

With Cloud Forecast Lens, organisations can:

Empower Efficiency with Forecasted Spend Insights.

Maximize Budgeting with Agile Forecasting.

Boost Accountability with Team Cost Allocation.

FinOps Domains supported by YäRKEN

Understanding Cloud Usage and Cost

Performance Tracking & Benchmarking

Real-Time Decision Making

Cloud Rate Optimization

Cloud Usage Optimization