The cloud is a powerful, flexible tool that many businesses are able to use to their advantage. However, because the public cloud decentralizes access to cloud resources, cloud users are challenged with runaway costs and poor visibility, making it hard for finance to close the books.
To overcome these challenges and ensure your organization is successful in the cloud over the long-term, you need to create an overarching strategy for cloud financial management.
What is Cloud Financial Management?
Cloud Financial Management (CFM), also known as FinOps or Cloud Cost Management, is a function that helps align and develop financial goals, drive a cost-conscious culture, establish guardrails to meet financial targets, and gain greater business efficiencies.
The ever-changing nature of the cloud, as well as your evolving business objectives, will require your CFM to be extremely adaptive. Proper CFM can help you better optimize and manage your cloud costs, but only if it’s treated as an ongoing process rooted in cross-collaboration and involves teams and projects across your organization. can help you manage your cloud financial costs.
Building a successful CFM can be achieved involves establishing the following four key pillars: visibility, optimization, automation and governance, and business integration.
In order to help ensure that CFM starts off with a solid foundation, and remains successful long after its implementation, an overarching, collaborative working group needs to be in charge. For leading organizations, a formalized Cloud Center of Excellence (CCoE), sometimes known as a Cloud Strategy Office or Cloud Program office, is created.
What is a Cloud Center of Excellence?
A Cloud Center of Excellence is a cross-functional working group that governs the usage of the cloud across an organization, driving best practices across functions.
The CCoE has three key responsibilities: executing the cloud strategy, driving collaboration and best practices across key stakeholders, and evaluating and utilizing technology to support business initiatives. Because the CCoE is composed of stakeholders from throughout the organization—notably finance, operations, and security—the projects and initiatives they create have context and buy-in from numerous functional areas to ensure everyone is working towards what’s best for the organization.
The CCoE is tasked with creating a culture of financial awareness and accountability, both of which are crucial to operating a successful CFM function. In return, you’ll be able to increase gross profit margins, decrease your cloud spend, and become proactive when it comes to overall management of your cloud environment.
If you want to learn more about how you can build your own Cloud Financial Management strategy, check out our whitepaper “Building a Successful Cloud Financial Management Practice”. The whitepaper breaks down the four pillars of CFM, what responsibilities the CCoE should have, and tips on how to create an action plan to achieve a successful CFM in your company.