For most business roles, it’s easy to gauge if you are successful or not. In sales, you either make a sale, or you don’t. In Finance, you either save the organization money, or you don’t. In cybersecurity, you either protect your organization’s assets or there are breaches. Unfortunately, being successful in FinOps isn’t quite as binary.
FinOps activities are collaborative and require context. For example, when it comes to Resource Utilization & Efficiency, FinOps groups don’t directly own the resources that need to be rightsized. Therefore, if $500 of rightsizing savings are made, how should that be reported? Moreover, if the engineers, product owners, and other stakeholders don’t get credit for their work toward savings, will they be motivated to do it?
One Fortune 500 company I worked with found it difficult to drive rightsizing savings on their own. As a solution, they reframed the Rightsizing Savings as a collaborative success. All the Rightsizing Savings were attributed to both the FinOps team and the engineering team. This created a win-win for the organization as the FinOps team didn’t have to do all the work on their own, and the engineering team received credit for generating cloud savings through rightsizing.
There are many metrics that should be measured to gauge the success of FinOps practices. Including Rightsizing Savings, forecasting accuracy, tag compliance, and more. The best place for FinOps organizations to start measuring success is by calculating how much is being saved through commitments.
Most of the cloud cost savings that FinOps organizations will generate are through spend agreements with Cloud Service Providers and commitments like Reserved Instances, Savings Plans, Committed Use Discounts, etc. Tracking the savings being generated by those activities will help ensure that commitments are being purchased on a timely basis and groups are driven to fully utilize the commitments.
Cloudability is a great tool to use to track these commitment savings. However, there are a few things that you’ll need to agree upon before putting these metrics into action.