Hello readers! What if your organization was able to discover millions of cloud cost savings but was unable to actually realize them?
This dilemma is faced by numerous large companies. Tools can help you understand where money is spent and provide you with recommendations on how to save, but this won’t affect your way of creating, deploying, and managing apps.
And this is where FinOps EBA, or FinOps Experience-Based Acceleration, comes to help.
FinOps EBA combines finance, engineering, operations, and business teams around real cloud costs. Instead of talking about opportunities for optimization, the teams engage in solving problems and learn necessary practices, as well as establish processes that can be continued after the end of the engagement.
I think the practical approach adopted by FinOps EBA makes it appealing for companies managing several hundred or even thousands of cloud accounts. In one of its recent blog posts, AWS presented an example of a financial company that has managed to earn more than $1.4 million annually using FinOps EBA.
What is FinOps EBA?
FinOps EBA is an approach that includes the FinOps principles in addition to AWS Experience-Based Acceleration.
The traditional cost optimization approach finds the high-cost items, provides advice, and then waits for the teams to take action. This process is challenging when there are hundreds of teams and thousands of applications.
FinOps EBA concentrates on making sure that opportunities for cost optimization are turned into actions.
Why the Execution Gap Matters?
Cloud platforms offer comprehensive visibility on costs. But visibility alone doesn’t guarantee cost reductions.
Consider a situation where a firm finds out that its few development databases are over-provisioned. This will be visible to the finance department, but finance alone cannot resize those databases.
Engineers need to analyze the performance requirements. Developers need to know their dependencies. Operations need to account for reliability. And finance needs to quantify the cost implications.
This is what FinOps EBA does. It brings all these people together such that recommendations from the spreadsheet become actionable in the cloud.
How FinOps EBA Transforms Cloud Cost Management?
This change is brought about by transforming the cloud cost management approach from one that focuses only on reporting to a collaborative process.
In addition to determining how much the organization is spending, it will be easier for the team to find out why they are spending this money, the workloads that incur these costs, whether these resources serve business objectives, and how they can minimize costs without impacting performance.
From Visibility to Action
It is still important to have cost visibility. Organizations should have tools for identifying costs, anomalies, resource utilization, and opportunities for optimization.
This is, however, only the initial step.
With FinOps EBA, the team can use these insights in making decisions. The recommended tools by AWS include AWS Trusted Advisor, AWS Cost Explorer, AWS Budgets, and AWS Cost Anomaly Detection.
The technology provides insights, and people have to take action.
Businesses should also explore the AWS cost optimization strategy to cut their cloud bill by 50%.
From One-time Savings to Recurring Optimization Cycles
Cost savings might become meaningless due to an increase in workloads, changes to applications, or deployment of more resources.
FinOps EBA will help in carrying out cost reviews, recurring optimization cycles, training, and governance.
What is Done During FinOps EBA?
A successful engagement begins with preparation prior to any changes being made by teams.
As per AWS, the following steps should be taken: set objectives, get executives’ approval, appoint an internal champion, analyze current cloud expenses, find the application owners, and choose the tools and workstreams for the teams to use. According to AWS, preparation usually takes about four to six weeks when organizations are well-prepared.
Analyzing Current Cloud Expenses
First, it is important to assess the current environment.
Teams review spending trends and associate expenses with applications, accounts, environments, and workloads. This activity is needed for discovering opportunities for optimization.
The aim of the activity is not to find the biggest AWS invoice.
A big workload may incur many expenses because it brings a lot of business value. In turn, a smaller workload may be a waste of money since it uses resources inefficiently.
Every company should understand its cloud development costs to reduce its overall infrastructure expenses.
Exploring Savings Opportunities
Groups could explore savings opportunities such as right-sizing resources, database optimization, eliminating unused infrastructure or resources, improving non-production environments, and evaluating purchasing choices.
For instance, according to AWS, one FinOps EBA helped optimize 62 non-production applications and configure AWS Budgets on 85 applications. The engagement provided $825,000 of annual recurring savings, delivered through such steps as RDS right-sizing, EC2 optimization, migration to Graviton instances, usage of Reserved Instances and Savings Plans, and elimination of idle resources.
These cases show an important rule – cloud savings are often achieved through small practical improvements rather than one big change.
FinOps EBA and Large Cloud Environments
The more accounts, teams, applications, and regions your organization is running in the cloud, the harder it is to manage its costs.
A business with 10 cloud accounts could still explore its expenses and savings opportunities manually. A business with 1,500 accounts requires different approaches.
According to AWS, a North American financial institution used 1,500 AWS accounts in its decentralized environment. It had cost visibility and optimization recommendations, but had difficulties implementing the recommendations in the applications.
This case is a good example of a situation where FinOps EBA would be really helpful.
Cloud Challenge | How FinOps Can Be Useful |
Unused resources | Allows teams to identify and remove items |
Several independent teams | Allows for cross-functional collaboration |
Limited FinOps knowledge | Offers practical training |
Oversized infrastructure | Promotes right-sizing decisions |
Inconsistent cost control | Establishes repeatable methods |
Weak budget visibility | Promotes forecasting and budgeting |
Recommended savings without action | Connects recommendation with implementation |
Why Non-Production Environments Can Be a First Step to Take?
Among the most beneficial insights I gained from this case study is related to the need to start with non-production environments.
There is usually a direct business or client impact associated with production environments. Therefore, people can be afraid to make any changes in architecture and infrastructure due to the possibility of downtime, poor performance, or other unintended consequences.
Non-production environments can help in making this process more secure.
Here, people can try right-sizing, reduce idle capacity, analyze choices of instance types, and improve cost management strategies without any immediate effects on clients.
According to AWS, the financial institution started with optimization in non-production environments and then moved to production environments.
This case gave me a practical insight into the matter – you don’t have to start with the most critical loads.
Creating a Culture of Cost Consciousness
Cloud cost optimization shouldn’t be left up to the finance team alone.
Architects choose cloud architectures. Developers choose cloud infrastructure. DevOps teams run cloud workloads. Finance tracks expenses and business value.
Each of these choices will impact the cloud cost equation.
FinOps EBA can help get all of them in the room together.
Teaching Teams to Consider the Cost
Training is essential because people need to make cost-effective decisions in order to optimize cloud resource usage.
According to AWS, its EBA training program includes FinOps education and best practices training to help people understand how to effectively use cloud cost optimization resources.
There’s an added benefit to this.
Rather than relying on a FinOps team to always be on the hunt for cost-saving solutions, organizations can teach other teams how to think about cost as well.
FinOps EBA and Governance
Efforts for optimization without governance can very easily lose traction.
An organization might reduce its expenses today, but chances are high that those expenses will increase again. With proper governance, this situation is easily avoidable.
Organizations could employ budget alerting, deployment cost reviews, and tagging policy implementation to bring some consistency to their accounts. It would be unwise, however, to focus on slowing down the usage of the cloud environment; one's goal is to educate their team on financial impact.
When Should an Organization Consider FinOps EBA?
FinOps EBA would make sense in situations where cloud spend becomes hard to manage by means of simple reporting and individual optimizations.
Such a solution could fit an organization with multiple AWS accounts, a decentralized structure, fast-growing workloads, or varying levels of maturity. It could also help if an organization has cost visibility but struggles with taking actions based on that knowledge.
Small organizations might find no need for a formal EBA engagement. Instead, simple FinOps principles, such as tagging, budgets, cost reviews, and optimization, might be enough.
It all depends on the organization's scale, complexity, structure, and needs.
It would be beneficial for businesses to choose cloud consulting services to connect business objectives, optimization, governance, and cloud architecture.
Business Lessons from the AWS Case
In this particular example, it is clear that there is a distinction between cost savings and actual cost savings.
The bank had visibility into its costs, but the fragmented teams had difficulty in making something out of it.
The company's first EBA yielded an annual recurring savings of $825,000, while its second saved another $595,000, making the total annual savings more than $1.4 million. The company has since then made EBA an annual activity and extended optimization to thousands of accounts.
This is just one AWS case study and does not mean that every company would see such success.
With rising costs, companies can opt for FinOps practices for the AI era to track model, token, GPU, and other infrastructure costs.
What Lies Ahead for Cloud Cost Management?
Companies will not only need monthly cloud bills but also teams capable of understanding the link between architecture, usage, cost, and business value.
FinOps EBA enables such understanding through optimization, collaboration, training, governance, and continuous improvement. In the case of companies running significant cloud environments, FinOps EBA makes cost management a regular activity for the cloud operation.
Conclusion
FinOps EBA may enable bridging the gap between cost visibility and action.
Rather than detecting inefficiencies, it unites financial and operational people, enabling implementation of improvements and development of FinOps competencies.
The example of AWS demonstrates the scalability of the proposed approach. A financial company working with 1,500 AWS accounts achieved over $1.4 million in annual recurring savings by using two EBAs and continuing with this practice within its optimization cycle.
The underlying idea here is simple: cloud cost optimization is efficient when the responsibility for cost and business value is shared among teams.