Best Practices on FinOps
By Nimika Grover | April 18, 2023
Introduction: AWS FinOps is a set of practices that focuses on the management and optimization of cloud costs in Amazon Web Services (AWS). It aims to align financial goals with technical decisions to optimize cloud costs while ensuring that the cloud resources are used efficiently and cost-effectively.
1. Cost Allocation: Cost allocation is a crucial practice of AWS FinOps that helps organizations to attribute the cost of cloud resources to specific business units, departments, or teams. It enables better tracking and analysis of cloud costs, which is essential for optimizing cloud costs.
To implement cost allocation, organizations can leverage various tools such as AWS Cost Explorer, AWS Cost and Usage Reports, and AWS Cost Categories. These tools enable organizations to identify the cost of cloud resources used by each team or department and allocate the cost accordingly.
2. Cost Optimization: Cost optimization is another key practice of AWS FinOps that involves identifying cost-saving opportunities in the cloud. Organizations can achieve cost optimization by implementing various techniques such as right-sizing, instance reservations, and using spot instances.
Right-sizing involves identifying the optimal size of the cloud resources required to meet the workload requirements. Instance reservations involve committing to the use of cloud resources for a specific period, which can result in significant cost savings. Using spot instances involves leveraging unused EC2 capacity at a lower price point, which can help organizations save costs.
3. Cloud Governance: Cloud governance is a critical practice of AWS FinOps that involves establishing policies and procedures to ensure that cloud resources are used efficiently and cost-effectively. It includes various aspects such as security, compliance, and regulatory requirements.
To implement cloud governance, organizations can leverage various tools such as AWS Config, AWS CloudTrail, and AWS Organizations. These tools enable organizations to establish policies and procedures to ensure that the cloud resources are used efficiently and cost-effectively, and comply with security, compliance, and regulatory requirements.
4. Automation: Automation is a critical practice of AWS FinOps that involves leveraging automation tools to optimize cloud costs. Automation enables organizations to monitor cloud usage and costs, identify cost-saving opportunities, and implement cost optimization techniques.
To implement automation, organizations can leverage various tools such as AWS Lambda, AWS CloudFormation, and AWS Systems Manager. These tools enable organizations to automate various processes such as cost optimization, monitoring, and reporting.
5. Collaboration: Collaboration is a crucial practice of AWS FinOps that involves encouraging collaboration between business and technical teams. Collaboration enables better alignment of cloud usage with business objectives, which is essential for optimizing cloud costs.
To implement collaboration, organizations can leverage various tools such as AWS Chatbot, AWS Chime, and AWS SSO. These tools enable organizations to encourage collaboration between business and technical teams and ensure that cloud usage aligns with business objectives.
Conclusion: AWS FinOps is a set of practices that aims to optimize cloud costs while ensuring that cloud resources are used efficiently and cost-effectively. It includes various practices such as cost allocation, cost optimization, cloud governance, automation, and collaboration. By adopting AWS FinOps, organizations can achieve greater transparency and accountability in their cloud usage and optimize their cloud spending to achieve maximum return on investment.