These use cases are from the framework the FinOps Foundation has established on how ITAM intersects with FinOps capabilities. 

Use case #1: Cost allocation

Cost allocation is a fundamental aspect of financial management, and it’s where FinOps and ITAM converge effectively. 

FinOps cost allocation activities: 

• Developing strategic naming standards and hierarchical groupings. 
• Defining governance standards for various groups. 
• Tagging groups such as by team, project, application, region, etc. 
• Reporting on key financial metrics such as cost per group/user. 
• Allocating costs with any associated commitment-based discounts. 

ITAM cost allocation activities: 

• Using naming standards for license allocation. 
• Applying cloud naming standards for Bring Your Own License (BYOL). 
• Developing reporting standards for BYOL usage. 

FinOps and ITAM intersection – Cost allocation: 

• Shared understanding and utilization of naming standards. 
• Overlaps in areas like BYOL and cloud service provider (CSP) marketplace, necessitating collaboration for optimal cost allocation.

Use case #2: Managing shared costs

Shared costs present unique challenges, but collaboration between FinOps and ITAM can ensure equitable distribution. 

FinOps activities with managing shared costs: 

• Identifying shared cost types. 
• Establishing mechanisms for dividing shared costs. 
• Applying shared cost models. 
• Reporting on shared costs.

ITAM activities for managing shared costs: 

• Collaborating with Finance to establish cost-sharing methodologies. 
• Agreeing on a methodology for distributing monthly costs. 

FinOps and ITAM intersection – Managing shared costs: 

• Overlaps in support costs (CSP or software). 
• Collaborating with application owners for shared cost allocation. 
• Handling products with prepaid lump sums and variable monthly usage costs.

Use case #3: Managing anomalies

Identifying and managing anomalies is crucial to preventing financial leakages and ensuring IT organizational processes are followed.

FinOps activities with managing anomalies: 

• Establishing an anomaly management process. 
• Detecting, documenting, and communicating about the peaks and valleys of cloud activity. 
• Generating alert reports to surface anomalous spending. 

ITAM activities with managing anomalies: 

• Conducting regular license compliance reviews (for example, when cloud spending spikes, it’s possible the associated license use spikes as well. It becomes a difficult situation when you don’t have enough licenses to cover the increase, leading you to fall out of compliance).
• Investigating license shortages and underutilization. 
• Addressing unauthorized/unsupported applications. 

FinOps and ITAM intersection – Managing anomalies: 

• Managing license usage, particularly overages. 
• Addressing unauthorized/unsupported use of services and products. 
• Rightsizing licenses in response to overages. 

Use case #4: Forecasting

FinOps and ITAM come together to make stronger forecasts for the business as a whole. 

FinOps activities with forecasting: 

• Collaborating with multiple teams to develop a forecasting methodology and process. 
• Leveraging historical data and future plans to create forecasts. 
• Coordinating with budget leaders to ensure budgets align with business goals. 
• Tracking and reporting on KPIs. 

ITAM activities with forecasting: 

• Projecting cost increases, reductions, and requirements based on license reviews. 
• Collaborating with stakeholders to determine license requirements and cost adjustments. 

FinOps and ITAM intersection – Forecasting: 

• ITAM engages in forecasting, particularly related to licenses, while cloud forecasting is generally outside its scope. 
• Overlaps occur in areas like BYOL, CSP marketplace, and standalone SaaS, requiring collaborative planning and forecasting. 

Use case #5: Budget management

ITAM and FinOps teams can work together to optimize budgets for greater efficiency.  

FinOps activities with budget management: 

• Planning with budget leaders for efficient budget plans. 
• Tracking and reporting KPIs to monitor cloud spend versus budget. 
• Exploring optimization opportunities and overspending by alerting teams projected to exceed budgets. 
• Communicating with leadership when underspending is expected. 

ITAM activities on budget management: 

• Advising Finance on budget expectations based on licensing insights. 
• Conducting annual reviews of renewal expenditures. 

FinOps and ITAM intersection – Budget management: 

• FinOps collaborates with ITAM to ensure license and consumption-based usage aligns with budget expectations. 

Use case #6: Workload management and automation

Workload management and automation prioritize efficient resource usage by ensuring that resources are active only when necessary.  

FinOps activities with workload management and automation: 

• Collaborating with application owners to tag resources effectively. 
• Communication of performance statistics regarding automation and non-tagged resources. 

ITAM activities with workload management and automation: 

• Establishing protocols for transparent communication of performance metrics related to resource usage and automation. 

FinOps and ITAM intersection – Workload management and automation: 

• ITAM reviews license usage and collaborated with FinOps to clean up temporary or abandoned assets. 
• Collaboration ensures that licensed assets align with elasticity and scaling considerations, factoring in license rights and entitlements. 

The intersection of FinOps and ITAM offers a powerful synergy for organizations seeking to enhance their cost management efforts. By leveraging the strengths of both disciplines, organizations navigate the complexities of cost allocation, data analysis, anomaly management, shared cost distribution, and more. This is the second post in a series exploring the intersection of FinOps and ITAM.

Read the next post in this series, How FinOps and ITAM Teams Can Work Together in Real-Life Scenarios.

The post 6 Collaborative Use Cases for FinOps and ITAM Teams appeared first on Snow Software.

Guiding principles such as collaboration, timely reporting, centralized teams, cloud usage ownership and business-value driven decisions are at the heart of the FinOps mission. We’ve identified three fundamental building blocks that help organizations build a robust FinOps discipline upon that foundation. These components are setting up the FinOps team, implementing FinOps and leveraging software tools designed for FinOps. 

Organizational mapping

The collaboration of various stakeholders is key to building a successful FinOps discipline. They keep cloud costs under control and detect cost anomalies to prevent unexpected expenses. Building effective collaboration around cloud financial management requires aligning competing priorities of fast development, watching spend and ensuring quality work. FinOps managers are responsible for overseeing cloud costs and enabling transparency with cross-functional stakeholders. Each stakeholder group owns a set of issues that need to be solved to achieve cost excellence with FinOps.

• Cloud Operations are responsible for supporting and architecting all cloud platform environments and applications. They continually monitor the applications to ensure resources are used effectively and provide recommendations for optimizing performance and operational resilience.
• Infrastructure and Operations teams establish technology roadmaps, operationalize technologies, and enforce governance, standards and processes. They require platforms and tools to ensure an organization’s IT estate is operating optimally.
• Finance must drive financial accountability and predictability in cloud costs. Forecast accuracy, effective cost allocation and the promotion of good governance ensure the enterprise is cost-efficient in the cloud.
• Engineering wants to create great products that are easily adopted and offer value to end users internally and externally. Moving the needle on cloud cost through initiatives such as cost transparency, staying on budget and monitoring application performance is important to this team.
• Leadership teams make strategic decisions based on the value the cloud drives for the business and customers that ultimately result in innovative solutions, satisfaction and loyalty. They strive for revenue to outpace cloud spend, accelerate savings, sponsor FinOps teams and hold them accountable for outcomes.

Implementing FinOps

Cost optimization will save money, but that should not be the main goal. The goal of a successful FinOps implementation is to get as much as possible from investment in the cloud.

Every situation is different and there isn’t a single way to handle cloud optimization in FinOps. However, many organizations can achieve better control and manage their cloud spending by building upon the 4 strategies which we’ll examine in this section.

• Analysis. FinOps teams must have access to the latest data and analytics to make informed decisions. Data analysis, chargeback and showback push spend accountability to those that are responsible for creating the expense. It calls attention to total costs for the business entity, opportunities for cost avoidance and financial KPIs.
• Benchmarking. Well-defined success metrics are critical for measuring the impact of FinOps strategies. Knowing where to spend money, budget and forecast accuracy, monitor cloud-instance performance are just a few success benchmarks for successful FinOps transformation.
• Optimization. Organizations need to understand how spending fluctuates relative to cloud management decisions. Rightsizing instances and repositioning workloads are actions that improve cost and performance in the cloud. It’s easy to forget to turn off resources when not in use. While tempting to shut down unused resources to lower running costs, it can be dangerous to do so without knowledge of the downstream impact on production or other processes.
• Governance. When it comes to improving the efficiency of the organization, the establishment of effective controls and governance is critical. Organizations need a policy engine that ensures cloud optimization objectives are being followed, budgets are maintained, costs are properly allocated, reports are generated, and that communication is taking place across the enterprise.

Technology tools

FinOps practitioners know that technology is limitless, and intelligence is priceless. Optimizing IT spend, reducing risk and leveraging technology all help to prevent cloud usage and cost from spiraling out of control. This is especially important for organizations with large and disparate user bases. Software tools help cross-discipline FinOps team members to effectively track, manage and reduce cloud costs. Their capabilities include the following:

• Visibility. A top challenge for FinOps teams is the ability to visualize, understand and manage cloud costs and usage over time. Software tools analyze cloud data (including containers) from multiple cloud service providers. These tools allow teams to gain insight into cloud provider bills, identify trends, pinpoint cost drivers and detect anomalies.
• Cost Allocation. It’s impossible to accurately attribute costs to users until you know where each teams’ resources live. Cloud provider billing accounts often lack the granularity required for allocation. Software features such as tagging allow for efficient cost chargeback and drive greater accountability based on resources that are consumed.
• Reporting. FinOps teams face the challenge of investigating changes in cloud spend by cost center, application, service and resource. Software consolidates and visualizes billing, containers and other data from multiple cloud providers into a single, unified view. This makes it easy for teams to share and work from the same data set.
• Budgeting. Forecasting cloud budgets can be difficult because of the large number of services, resources and pricing variables involved. With FinOps tools, stakeholders can analyze historical spending data to accurately forecast cloud spend and usage.

FinOps inextricably links people, process and technology to break down organizational silos, facilitate information flow, improve decision making and more. While needs and usage may change over time, developing an effective plan for cloud financial management will help maintain balance between cloud performance and cost well into the future. A good FinOps strategy ensures that everyone who needs to be involved is included in the planning process.

Ready to take the next steps to improving your cloud visibility and lowering costs? We’re ready to help.

The post The Fundamentals of FinOps: Cloud Cost Transparency and Optimization appeared first on Snow Software.

A complete understanding of usage and spend across all cloud assets will serve teams well. With this view, these teams can: 

• Accurately forecast and budget 
• Allocate costs based on usage to drive accountability 
• Detect anomalies and sudden cost fluctuations  
• Embrace the underlying processes that glue their financial picture together  

Let’s look at the following functional areas and how a FinOps approach effectively addresses the management of cloud costs and propels your organization forward within each one. 

Finance teams

Finance teams have various ways to control cloud costs: by instituting and enforcing financial and accounting process rules, establishing budget allocations by team, negotiating contracts and other strategies. Because financial management involves all levels of an organization top down and bottom up, such as cloud spend rolling up to IT spend, or the cloud budget stemming from a percent of total expenses, it’s important to accurately forecast and budget cloud spend as granularly as possible.  

Another important metric Finance considers when planning for projects to invest in is ROI to understand one project’s expected revenues in relation to costs against other projects.  In order to do this effectively, Finance must evaluate the unit economics for each project i.e., cost divided by a unit (such as applications, BU, region). A Finance controller may allocate those costs proportional to the unit’s cloud usage. Understanding the revenue relative to the associated costs enables decision-making for the projects and efforts that are the most profitable for the company. It also sets a benchmark for success.   

Allocating costs also drives accountability. In the past, IT was considered a cost center that absorbed all technology costs. Now, with an increase in decentralized decision-making and budgets, finance can properly chargeback users based on their usage. 

With CAPEX (long-term costs) and OPEX (expense-as-you-go), moving to the cloud has forced many finance teams to embrace OPEX financial strategies. Spending on “as-you-need” public cloud services is a big change for organizations that, just a few years ago, would’ve spent millions on a datacenter. It has significant implications for the CFO and their team in context of profitability and Wall Street expectations. This should be a careful consideration.

Cloud operations teams

Cloud operations/cloud center of excellence (CCOE) teams are the administrators of the public cloud, and they hold the access keys for the software development team. In larger enterprises, it is possible that one manager will be assigned to one cloud service provider. This team is likely a part of regular cloud vendor negotiations. Some of their tasks include: 

• Provisioning cloud access 
• Setting up computing, storage, database and networking needs for specific users/teams 
• Monitoring usage and costs 
• Configuring capacity and workload rules 
• Maintaining data security 
• Accelerating digital projects 

The cloud operations team also has visibility to the cloud billing. They are expected to minimize overspend or waste. 

CCOE teams should make proactive decisions on which cloud service providers (CSPs) are the best for certain executions, how to scale operations and how to maintain high up-time in line with developer productivity. 

Software engineering and Dev teams

Software developers and their ability to create test, development, and production environments are an integral part of your organization’s product innovation, revenue scaling, and employee productivity. Without governance or clear rules of when and how to use what cloud resource however, they will simply do “what it takes” to get work done.  

While developers usually try to maximize their efforts in launching cool new features, products, and capabilities, they don’t often keep track of their cloud spend. Finance teams will notice big run ups on cloud costs, however. In some organizations, they will attempt to curb the spend if it exceeds budget or escalates exponentially. Alternatively, because some specialized software developers can be considered “expensive” resources, another approach is to allow them free rein to do their work, at any cost.  

In both scenarios, FinOps can look at the importance of the workstream to downstream projects and the revenue associated with the cloud spend before making decisions about the spend itself.

IT Ops and Services teams

In some companies, the person with the IT operations role has evolved into the cloud operations or application owners. On the path to digital transformation, many IT teams have been tasked with migrating applications from the datacenter to the cloud. They re-platform, refactor, and rebuild to be cloud native. Because the IT team’s goal is to drive efficiency for both tools and personnel, this team should work to optimize IT costs across multi-cloud environments. 

In the interest of delivering to business unit expectations, IT Ops strives to have high up-time with low time to resolve issues in a compliant and secure environment. That means that the workloads going to both private and public cloud need to be well-oiled and high functioning. They are stewards of cost and are often held responsible for knowing the licensing arrangements between what is paid on-premises and what might be “BYOL” in the cloud. An IT asset management (ITAM) program can be used to manage the user lifecycle across all hardware and software and SaaS licensing for maximum cost efficiency. 

FinOps becomes a powerful enabler

As discussed in our first blog post in this series, FinOps isn’t just about capping cloud spend. It isn’t meant to place limits on creativity, productivity and innovation. Instead, FinOps is an organizational mindset that enables your organization to achieve strategic goals while effectively managing costs. In the spirit of creating visibility and reducing cost and risk, it’s closely aligned with ITAM programs and SaaS management. FinOps also includes the drive to understand and manage all technology. At Snow, we call this Technology Intelligence.  

For more insights on FinOps, subscribe to our blog.

The post Achieving Effective Cloud Cost Management: How FinOps Helps Your Organization Meet Its Goals appeared first on Snow Software.

Over the summer, many of us at Snow Software attended in-person and online events. In comparing notes, we were surprised to find that many software asset practitioners have yet to incorporate managing cloud applications and infrastructure into their software asset management practice.

Technology change is certain, especially in IT. The reason why your organization invested in software asset management in the first place was to help reduce risk, minimize spend or achieve strategic initiatives with greater speed. If you’re not managing cloud assets, is your team able to make the impact desired by the business? How does managing cloud assets help achieve your software asset management program outcomes?

Reduce cloud costs

Over the last several years, cloud spend has grown and is predicted to grow even more, outpacing traditional, on-premises software spend. Gartner^® predicts that almost two-thirds of application spend in 2025 will be directed toward cloud software¹. Gartner also reported that cloud infrastructure is predicted to grow by ~30% this year. These trends may not be obvious to many organizations because cloud spend falls outside traditional IT with the line of business procuring their own applications and DevOps managing cloud infrastructure.

With distributed purchasing for cloud apps, there is application sprawl. Your organization might have several contracts in place for the same application, or even more likely, different divisions and departments may be purchasing products with redundant functionalities.

To add to this, business units may not be managing spend like a software asset management professional. They may not be able to identify unused licenses or right-size license bundles according to actual usage and need. With cloud infrastructure spend, the story is similar. Developers provision workloads as needed. With multiple cloud providers in use, spending can quickly escalate without a tool in place that can monitor and make recommendations for cost savings.

Takeaway: Talk to marketing operations, sales operations, HR and engineering to uncover how they are managing their most expensive SaaS applications and cloud infrastructure spend. Uncover if your organization has a FinOps practice. You likely can help them save the business up to 30% on these costs.

Mitigate risks

With SaaS applications, nothing is installed on the device (with the exception of some hybrid applications like Microsoft 365^®), so traditional methods of scanning installations to detect unsanctioned applications is not going to catch risks for SaaS applications. In addition to paid applications, organizations need to be wary of free application usage as these applications could be storing customer data and putting your organization at risk if they’re not handled properly. Because these applications are not going through your secure single sign-on platform, passwords for these applications could be weak and easily hacked.

Takeaway: Collaborate with your security team to determine if a process is in place to identify all SaaS applications in use by your employees. If one does not exist, consider expanding your software asset management tooling to incorporate shadow SaaS discovery (often done with a browser extension).

Automate time-intensive processes

If you’ve automated data collection and cleaning for your on-premises environment, you’ve likely enjoyed several weeks of time savings when preparing for negotiations and audits. With cloud environments, it’s even more important to automate the collection and analysis of where to save because these environments change so fast. IaaS instances and containers can be spun up/down in the blink of an eye. It’s impossible for any human to keep track of those changes on a spreadsheet.

Takeaway: If you haven’t invested in automated tooling to collect, normalize and analyze your IT asset data, now is the time to make a change to keep up with your modern IT stack. With visibility into cloud assets, you could help your organization make an even bigger impact by reducing risk and reallocating wasted spend to projects that could help the organization innovate at greater speed.

You can learn more about prioritizing software asset management processes in our best practice guide, “Building a Successful ITAM Program.”

The guide provides a deeper look into the elements of a successful ITAM program implementation, including:

• ITAM benefits for IT operations management processes
• Additional guidance on establishing solid processes and policies
• Advice on applying Technology Intelligence from your ITAM program to other areas

^{1. https://www.gartner.com/en/newsroom/press-releases/2022-02-09-gartner-says-more-than-half-of-enterprise-it-spending}

The post 3 Key Benefits to Managing Cloud Assets for Improved Software Asset Management Practices appeared first on Snow Software.

We know there are countless cloud vendors out there and that it can be challenging to sort through them all to find the perfect solution for your organization’s unique set of challenges and criteria. This is one major reason why Snow pursued STAR and Trusted Cloud Provider certifications – to help both current and prospective customers cut through the noise and quickly and easily identify Snow as a cloud provider whose security practices meet the industry best practice.  And now, with this certification, business leaders can feel reassured that the tools they depend on from Snow are on the cutting-edge of security and compliance.

Snow’s Technology Intelligence platform, Snow Atlas, which is now listed on the STAR registry, provides comprehensive visibility and contextual insight across software, SaaS, hardware and cloud. With Snow, IT leaders can effectively optimize resources, enhance performance and enable operational agility in a hybrid world. Snow is changing the way organizations understand and manage their technology consumption. As technology partners, it’s important that we’re outspoken and deliberate in our commitment to security and compliance for our category-defining solutions.

To become a CSA Trusted Cloud Provider, Snow completed the following requirements:

• Complete a 270-point assessment of our security controls vs. the CSA Cloud Controls Matrix (CCM)
• Have at least one current member of staff who has achieved the CSA Certificate of Cloud Security Knowledge (CCSK)
• Volunteer at least 20 hours annually to CSA for activities such as research working groups, regional chapters, call for presentations, blog contributions and more
• Be a corporate member of the Cloud Security Alliance in good standing

The CSA is the world’s leading organization dedicated to defining and raising awareness of best practices to help ensure a secure cloud computing environment. Built upon existing CSA programs, the Trusted Cloud Provider trust mark (which is displayed on qualifying organizations’ Security, Trust, Assurance & Risk (STAR) registrations) helps consumers and business leaders identify cloud providers that demonstrate their commitment to holistic security and are aligned with their individual security requirements. We’re proud to support the CSA and align ourselves with this industry-leading organization and its security and compliance values. Looking ahead, we intend to pursue additional certifications, ISO27001 and SOC2, to further demonstrate our commitment to cloud security competency, and a commitment to our customers and the industry at large.

We’re eager to engage with the networks, educational resources and knowledge-sharing gained through the CSA community to strengthen our security posture and enhance security across the cloud community. Given the exponential pace of cloud adoption to support modern business and a distributed workforce, it’s vital that businesses can be confident that their cloud providers are certified reliable, secure, compliant and have the CSA seal of approval.

Does this sound like something that could benefit your organization? Reach out to learn more about how STAR Level 1 and Trusted Cloud Provider certified Snow Atlas is defining the Technology Intelligence category and how it can help your organization unlock game-changing insights.

The post Announcing STAR Level 1 and Trusted Cloud Provider Certifications for Snow Atlas appeared first on Snow Software.