In this episode of Valorem Visions we discuss the importance of FinOps and managing a mature finance operation.

Transcript

What is the trend?

So, for the trend of FinOps which is, you know, fairly recent in the cloud. What it means to our customers is ownership of your data - yearly trends, seasonal data, Microsoft doesn't retain that and it's important that you own and retain your financial data. It also means that with the wealth of historical data that you own, you now can do accurate forecasting. Things like seasonality and pulse uses when you notice things such as social or viral kind of content when that happens, allowing you to see that data and forecast is very important to knowing what your cloud expenditures are. Another thing that's very important in FinOps is that this brings to the table is integrity, Integrity of your data, making sure you have high quality data in order to allocate, chargeback, Financial Accounting, making sure that you're not missing tags like cost center, owner environment, application, this is very very important in the trend. And then finally it's the one of the main purposes is just understanding how you can operate more efficiently and effectively and if you can do that better than your competitors that will give you a competitive advantage and drive more profitability that can be used for other initiatives in your company.


Why is this trend important?

Well the importance of financial operations- is important now in the cloud because in the data center days you bought the hardware for a project and it was a sunk cost. So you didn't really care so much about the utilization of that equipment. Typically, on-premise you might utilize that equipment at anywhere from 0 to 15% utilization, well-run organizations get up to around 15%. Typically people who aren't so well-run are in the 5 to 10% range on their on-premise equipment utilization but in the cloud, you can optimize your cost to be more towards the 100% utilization and if you do that you save 10x potential cost if you save it. But because of the dynamic agility of the cloud and the rapid deploying of the equipment, if you make a mistake and leave it deployed when it's not being used, you could actually make those costs go unanticipated up. And we have some customer horror stories where they've deployed large scale equipment to do some big number crunching and accidentally left it running over the weekend when it wasn't doing anything and they can get cost 10to 20K for a large scale infrastructure you know even upwards of 50k, I've heard some stories. And so Financial operations allow you to set budgets and monitor your costs, set off alerts if you're exceeding something that was unanticipated, and then address the situation quickly so you don't have runaway costs.


What is Valorem Reply doing to prepare for this trend?

So at Valorem, we now have built a practice and tooling that helps customers get their foundation set up quickly. And plus the practice allows us to mature whatever financial operations a customer might have in order to improve that. So, we have the stuff running now, not just a demo. We have the actual Financial operations running at Valorem as well and this is code, tools practices, training that we can impart upon customers. It's really about helping the company implement the practice, the policies, the financial accountability, the regular reviews of trends. So it's more than just code, it's also making the company now operate a lot better and more efficiently. And so we bring all these tools to the table to help you set your required tagging policies, implement them, make sure you have full cost accounting, operating, that you have regular reviews that we have the right kind of reports for you to manage the cost monitoring and the efficiencies, the showback, the chargeback all of that. So, Valorem is happy we've done this for other customers, we're happy to bring these tools to help all of our customers that Valorem supports.