3 Ways for Engineering Leaders to Kickstart a FinOps Program

by Elisa Hebert on August 3, 2022

As an engineering leader you need to be BFFs with your CFO. It’s that partnership that gives you a deep understanding of the business – and gives your CFO a view into the drivers of your domain strategy and decisions.

Your CFO wants one thing – a successful business. Success looks like a lot of things, and learning how to speak each other’s language and partner is the groundwork for decision making that is strategic, forward-thinking, and what changes you from being a good engineering leader to a good leader.

FinOps greases those wheels. It encourages demands partnership, transparency, communication, and accountability. It sits at the center of people, process, and technology – the mantra of every cloud consultant sliding into your DMs to help accelerate your cloud native journey.

To be a solid FinOps leader there are three big things you need to think about:

Good vs useless data
Culture of accountability
Bias for action

1. Good vs Useless Data

One of the core pieces of FinOps is unit measurement. Understanding the cost per unit is only valuable if you’re measuring the right unit.

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You can measure cost per customer, cost per Kubernetes cluster, cost per revenue dollar, cost per xxx. These are interesting unit costs – but not all of them will be valuable.

I love a good spreadsheet. Part of what makes it good is knowing when to trash a tab or chart because while it might be pretty and show a line up and to the right (or in the case of cost efficiency down and to the right) pretty ≠ good.

How to start:

Open up your cloud billing and grab the cost data by a few different parameters (account, type, etc)
Get some business level data (revenue, customer count, cluster count, etc) from your BFF the CFO.
If you’re using Fairwinds Insights to measure Kubernetes costs, grab some of the info under the efficiency tab.
Make a mess – be quick and dirty about it – do some calculations of unit costs. You’re not looking for perfection, you’re looking for a signal.
Highlight the things that seem valuable and write down why. If you can’t explain to yourself why the metric is valuable quickly… it’s probably not. Iterate. Trash the trash.
Benchmark. The first few iterations are going to be confusing and probably wrong. But there will be some nuggets of gold in there that you might want to come back for. Keep a point in time copy for future reference as you continue to iterate.
Keep going.

2. Culture of Accountability

The silos that can develop in enterprise organizations and even in smaller startups need to be crushed. We are all accountable to the business – and for that to be true, there needs to be clarity and transparency.

Every person in an organization should understand how the pieces fit together. There are levels and depth of context, sure – not everyone needs all the gritty details of every decision or line item. But everyone should understand the business strategy behind decisions and the related impact.

Spinning up a new environment might accelerate the team, but it comes with a cost. Each engineer should understand the costs (and savings) of their decisions. And your CFO or finance partner needs to understand the economy of scale, speed to get features out the door, or another x factor that a broader cloud footprint can offer.

Which brings us back up to unit costs – how do our decisions impact unit cost? Just having that thought kicking around increases accountability.

3. Bias for Action

Distributed authority with centralized strategy keeps you nimble (it has a lot of other valuable outcomes – especially related to leadership development – but that’s another post). Push decisions to the edge, centralize strategy, and create a framework for ensuring alignment across the business. With the ability to balloon your cloud bill in a hot second vs the old days of long-cycle procurement and finance approval, it’s critical that decisions – both to start and to stop – can be made quickly, with rigor, and with autonomy.

Ensuring you’re watching and measuring the right things, and having the authority to act quickly when something is out of whack – that’s the sweet spot. You most likely won’t be there out of the gate. Keep going.

FinOps is a practice, a partnership. It will push your organization to mature and evolve, and it will give you a framework to encourage a lean, flexible, and accountable approach to where your business meets the cloud.

If you’re curious about how Fairwinds Insights can help you in your FinOps practice: