Cost Management Never Stops

Are you finding it hard to manage your cloud computing costs and looking for savings or resource optimisation opportunities?

Many think cost management and cost optimisation are the same. But there’s a key difference that can change how you align your cloud resources and spending with your business goals. Explore FinOps in more detail to learn the main differences and how to effectively manage cloud computing costs.

Cost Management vs Cost Optimisation – Simplified

Cost Management is about keeping track of what you’re spending in the cloud. It answers questions like:

• How much are we spending?
• Where is the money going?
• Are we staying within budget?

Think of it like your monthly credit card statement — it helps you monitor costs but doesn’t necessarily reduce them.

Cost Optimisation goes a step further — it’s about making smarter decisions to reduce waste and increase value. It answers:

• Are we using the right services for the job?
• Can we scale down unused resources?
• Are there more efficient options?

It’s like refinancing your mortgage — you’re still paying, but now in a smarter, more cost-effective way.

Key Takeaways

• Cost management is a key step in managing cloud costs, and precise actions are needed to optimise cloud spending.
• Cleaning up unused resources helps manage space, but doesn’t optimise usage. It’s like cleaning a room to free up space.
• Optimising cloud spending means paying for only what you need and using resources that fit your usage.
• FinOps covers the technical, business, and operational sides of managing cloud finances, requiring teamwork with wider business teams.
• Cloud cost management aims to cut cloud expenses, while FinOps focuses on making sure cloud spending aligns with business goals.

Rethinking Cost Optimisation

In today’s fast-paced business world, cost optimisation is more than just cutting costs. It’s a strategic way to match cloud resources with what the company really needs, which should ensure efficiency and value for money. Cost management is key to this approach, leading companies to big savings and a sustainable future.

The Crucial Role of Cost Management

FinOps (Financial Operations) starts with cost management. It gives a clear view of how much an organisation spends on cloud computing/resources. By monitoring and understanding cloud costs, companies can spot waste and opportunities to save. This helps in making plans to cut costs and use your cloud resources more efficiently.

How FinOps Helps a CIO with Cost Optimisation

FinOps (Financial Operations) is a collaborative approach that brings finance, tech, and business teams together to:

• Understand and forecast cloud spend in real time.
• Build accountability by giving teams visibility and ownership of their cloud usage.
• Drive optimisation by identifying savings opportunities (e.g., right-sizing instances, committing to savings plans).
• Align cloud spend with business value, ensuring you invest where it matters most.

CFO’s, does your organisation struggle with technology costs that you can’t explain? Strategic IT Cost Optimisation – 4 Areas of Focus

The Power of True Cost Optimisation

True cost optimisation is more than just cutting costs. It’s about working together to make sure cloud use aligns with business goals. For example, a software company cuts its cloud costs by using Amazon SQS more wisely or turning off non-production instances when not in use, not just by simply cutting costs.

By changing how they think about cost optimisation, companies can make the most of their cloud investments. This leads to better efficiency, savings, and alignment with their business goals. This approach to cloud cost management and FinOps helps businesses succeed in the digital world.

Cloud Cost Management vs FinOps

More companies are utilising and relying on cloud computing platforms (e.g. AWS, Google, Azure), making it essential to manage costs well. Cloud cost management and FinOps seem similar, but are not the same. It’s important to know the differences to spend wisely on the cloud and achieve business outcomes.

Cloud cost management aims to reduce overall cloud spend. IT teams should actively monitor and manage how cloud resources are used. They find and cut costs that aren’t needed. The main focus is on numbers like total cloud spend, costs per service, or resource groups.

FinOps looks at the big picture, trying to optimise cloud spend against business goals. It brings together people from different parts of the company, like engineers, finance teams, and key product owners. FinOps looks at more than just money, like user satisfaction and business agility

Cloud cost management mainly looks at the technical side of cloud costs. FinOps is a broader approach that links cloud costs to business outcomes. Using FinOps helps companies spend on the cloud in a way that supports their goals, which can lead to more value and efficiency.

Conclusion

We have looked at the differences between cost management and cost optimisation. It is critical to use a FinOps approach for cloud financial management. Cost management is key to controlling expenses, but cost optimisation goes deeper.

As a CIO, FinOps helps you:

• Make data-driven cloud decisions.
• Avoid unexpected budget blowouts.
• Drive a culture of cost awareness across teams.
• Link every dollar spent to a clear business outcome.

By focusing on cost optimisation and FinOps together, businesses can get more value from the cloud. They can cut unnecessary costs and set themselves up for success. However, the goal must be to do more than just cut costs. It’s about using data for decision-making and working together across teams. With the right approach and tools, companies can manage costs well and make the most of cloud computing.