Why thinking like a detective can help businesses’ digital transformation while still cutting costs

This article is part of our Opinions section.

Recognising the cloud as an engine for growth, organisations are constantly evolving how they use the cloud in response to ever-changing business requirements and opportunities. But now, with a second global recession in less than 20 years looming, these corporations are expected to deliver more innovation with limited budgets. This puts them in a challenging position, especially when it comes to adopting game-changing technologies like Gen AI, optimising cloud and proving its return on investment in the boardroom.

Adding to the complexity, FinOps practitioners find themselves in a catch-22 situation. Despite considering waste reduction and efficient resource utilisation as top priorities, they lack clarity on their companies’ exact spending on cloud services. In fact, according to the State of FinOps 2024 report, 70% of companies are uncertain about their cloud spending.

However, there is a way forward – a data-driven approach to optimise cloud spending and resources.

Unleashing the power of cost accountability and targets

Did you know that organisations can reduce their cloud spending by up to 30% through cost accountability and clear targets?

The first step is to thoroughly examine the details of cloud investment to identify key stakeholders and establish cost ownership. This ensures that every individual within the business is responsible for their cloud resource consumption. When everyone fulfils their role, the combined effort yields successful outcomes. Additionally, having specific cost reduction targets creates a sense of purpose and urgency within teams. This means that by actively seeking optimisation opportunities, they become catalysts for change.

These targets should also align with financial benchmarks that support the business goals. This empowers FinOps practitioners to effectively measure progress and identify areas that require further attention. Think of it as a team of athletes training for a major race; they understand that by setting clear time targets and holding themselves accountable at every training session, they can enhance their performance and achieve their goals. The same principle applies to organisations managing their cloud spending. Not only does this boost their financial success, but it also improves their overall agility in the competitive business landscape.

To make this a reality, organisations need to bring together their FinOps practitioners, finance and IT teams — just like athletes collaborate with their coach and trainers — to foster collaboration and ensure everyone understands their role.

Uncovering opportunities for optimisation with data analysis

Data analysis is a game-changer when it comes to optimising cloud spend. FinOps practitioners can use a variety of tools and techniques to gain valuable insights into resource utilisation, cost trends and potential areas of waste.

In the case of cloud spending optimisation, data analysis plays a detective-like role. Similar to uncovering clues, FinOps practitioners can exploit a range of tools and techniques to reveal insights into resource utilisation, cost trends and areas of potential waste. Businesses can do this by analysing historical cloud usage data — patterns and trends can be identified, much like examining past crime scenes. With this understanding of peak usage periods and resource bottlenecks, FinOps practitioners are empowered to make informed decisions, optimising resource allocation and reducing costs during periods of low demand.

Combining this analysis of historical cloud usage data and also implementing real-time monitoring and alert systems is one of the most effective approaches a business can take when it comes to optimising cloud spend. This is because they can understand usage patterns, identify resource bottlenecks, and establish alerts – which ultimately leads to a more informed decision-making process, reducing costs and enhancing resource allocation.

Building a foundation for sustainable cost optimisation

Picture a construction project. In this context, imagine the primary focus is on building a strong and durable foundation. Similarly, when it comes to cloud cost optimisation, establishing policies, controls, and monitoring guidelines plays a crucial role, just like constructing a solid foundation. These measures ensure responsible cloud resource usage throughout the organisation and prevent unnecessary spending.

Tag and/or label your resources

One effective strategy is to implement tagging/labelling policies for cloud resources, similar to labelling construction materials based on their purpose. By categorising resources based on their purpose, department or project, FinOps practitioners can easily track and allocate costs to specific teams. This not only provides better cost visibility but also promotes accountability and encourages teams to optimise their resource usage, similar to how construction teams are responsible for using materials efficiently.

Automate your guardrails

Additionally, implementing automated cost control mechanisms is akin to having smart systems in place to manage resource usage, like sensors that automatically turn off lights in empty rooms. By setting up resource usage limits and automated shutdown schedules for non-production environments, organisations can minimise costs without compromising productivity. This is comparable to having systems that ensure resources are used efficiently, similar to how energy-saving devices help reduce electricity bills.

To ensure sustainable cost optimisation, FinOps practitioners should implement policies, controls, and monitoring guidelines. These measures enforce responsible cloud resource usage across the organisation and prevent unnecessary spending.

FinOps practitioners face the challenge of reducing waste and optimising resources. However, by adopting a data-driven approach, these professionals can unlock efficiency and drive cost savings. Establishing cost accountability, leveraging data analysis, and implementing policies and controls are crucial steps towards optimising cloud spending.

With these strategies in place, FinOps practitioners can navigate the catch-22 situation and effectively reduce technical waste while increasing efficiency in cloud spending. By embracing a culture of continuous optimisation, organisations can stay ahead in the dynamic world of cloud computing.

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