5 Ways to Implement a Cost-Aware Organizational Culture
With the maturity of cloud computing and the complexities resulting from the conflation of cloud native, edge, 5G, AI and more, companies are navigating a cultural transformation unlike anything we’ve seen before. At the heart of it is how enterprises manage cost, and that starts with a cost-aware culture.
In the early days of most digital transformation initiatives, less attention is paid to the cost of infrastructure and more attention on setting up consistent, resilient cloud-based systems that meet performance expectations at scale. However, as cloud computing offerings mature, both in potential and complexity, the real transformation has to happen internally at a cultural level. Below are five ways to approach and consider a cost-aware organizational culture.
1. Employ a Top-down plus Bottom-up Approach
A top-down approach refers to achieving buy-in from the highest levels of organizations, typically the C-suite. If the CEO, CTO, CIO and/or CFO mark as priority a cost-aware cloud culture, a big hurdle is overcome. If not, people within the organization may ask why the initiative is being pursued and create roadblocks that could stifle traction at the outset.
Fortunately, due to organizations like the FinOps Foundation, there’s plenty of awareness about the impact of cloud costs — and what CFO doesn’t want to save money, in the cloud or otherwise, if there are very achievable steps to cut costs without compromising business objectives? At the same time, buy-in from the bottom up — developers, cloud architects— is key because they are on the front lines of dealing with systems and cloud native applications. They’re best able to understand how to support the customer, what can be turned off and what can’t, and the technology and tools needed to do their jobs. A cost-aware cloud culture that takes these perspectives into account and brings them together as one team is more likely to succeed and be supported.
2. Develop Strategies to Eliminate Waste and Measure Accountability
Understanding regular cloud usage patterns is an easy first step to eliminating cloud waste. What can be shut down or scaled-down outside of business hours? This “easy things first” approach is detailed in more depth in the Cloud FinOps O’Reilly Book, and reading it helps create a foundation or culture for further success. First, tackle the low-hanging fruit. Consumption monitoring is about understanding what’s being used, which also goes hand-in-hand with attribution. Label it. Know what is being used, and who is using it. Once the “who” is identified, that person can be asked if there are more efficient or better ways to consume the cloud service. That simple conversation can yield positive outcomes, or at the very least a level of accountability. It doesn’t always have to be about cutting services or costs; they may actually need more resources than they currently have.
Sometimes it’s about using your “spend” more wisely. If you’re doing the right things while also growing your business and gaining more customers, your costs will naturally go up. That’s a good problem to have! However, during that growth, you need accountability so things don’t get out of hand.
3. Develop Shared Goals with a Centralized View
A shared goal could be as simple as reducing cloud-related expenses by 20 percent. If consumption is labeled and attributed, as mentioned previously, there will be true visibility to what’s going on in the environment. On a practical note, make sure that the finance and tech teams are talking about the same things, and using terminology in the same way, because today a lot of terms are overloaded, which can cause confusion. A centralized view allows the organization, including both the tech and finance teams, to roll up everything at a high level. Of course, identity-based guardrails should be in place to make sure that everyone who has access can see what they need or are authorized to see. This centralized view can provide visibility that, in turn, helps determine cloud waste and informs a remediation process.
4. Make Data-Driven Decisions
Data-driven decision-making allows for consistency; how you measure, what you measure and the time frames in which you measure, can all stay the same over time and provide interesting data points (change, spikes, usage patterns, etc.).
Consider this: Organizations often run into problems because they measure spending on a monthly basis. Well, not every month is the same number of days. The way you measure your data must be consistent. Also consider cyclical patterns within the organization. For example, some companies have significant spikes that happen around Thanksgiving (Black Friday), Christmas and other public holidays. Understanding the data beyond those cyclical patterns will help the organization forecast needs around cloud resources and services. Other usage patterns, such as the opportunity to scale down during non-business hours or making adjustments due to weekend usage changes or even seasonal considerations can provide data that can identify cloud waste and cost-saving opportunities.
5. Process and Governance
Previously discussed best practices around labeling, attribution, monitoring and visibility are only useful if the organization employs consistent processes. On a more practical level, governance over the organization’s environment (for example, not running things in the environment that aren’t tagged) will help with oversight, especially if safeguards are set up to shut down all non-tagged services within a short timeframe. Governance makes sure the organization is living up to the rules, because if not, the data becomes unreliable, and you face more difficulties in your efforts to reduce or add services as needed.
Enacting a cost-aware cloud culture can have a significant effect on an organization’s bottom line. But, beyond the benefits to the company, think of the impact on other data centers from a real-world perspective. The reality is that electric plants are fired up to handle the load to run systems that, in many cases, don’t need to be running as many resources as they do. There is an environmental aspect to creating a cost-aware cloud culture. It’s the same idea as the old adage from our parents: “Don’t leave the door open; you are air conditioning the whole neighborhood.” This bigger picture requires us to be better stewards of the cloud resources available to us and the results are better business outcomes. A cultural transformation that prioritizes these values gets us all there together.