As more and more companies are moving their operations to the cloud, it has become increasingly important to manage the costs associated with these cloud services. This is where FinOps, short for financial operations, comes in. FinOps is the practice of bringing together finance, technology, and business teams to manage cloud costs effectively.
One of the essential aspects of FinOps is the use of key performance indicators (KPIs) to measure the success of cloud cost management strategies. In this article, we will discuss some of the most important FinOps KPIs that cloud businesses should set and monitor.
Cloud Spend
The first and most basic KPI is cloud spend, which measures the total amount of money spent on cloud services. This KPI is important because it provides a baseline for understanding how much money is being spent and whether costs are increasing or decreasing over time.
Cost Optimization
The cost optimization KPI measures the effectiveness of cost optimization strategies. It takes into account the total cost of the cloud services and compares it to the optimal cost of those services. This KPI is important because it helps to identify areas where costs can be reduced without affecting service quality.
Cost Per User
The cost per user KPI measures the average cost of cloud services per user. This KPI is important because it helps to identify how much each user is contributing to the overall cloud spend. It can also help to identify users who are using more resources than necessary, which can be addressed through cost optimization strategies.
Cloud Waste
Cloud waste refers to the resources that are being paid for but are not being used. The cloud waste KPI measures the percentage of resources that are not being utilized. This KPI is important because it helps to identify areas where costs can be reduced by eliminating unused resources.
Resource Utilization
The resource utilization KPI measures the percentage of resources that are being used. This KPI is important because it helps to identify areas where resources are being over or underutilized. By optimizing resource utilization, costs can be reduced without affecting service quality.
Time to Deploy
The time to deploy KPI measures how long it takes to deploy new resources in the cloud. This KPI is important because it helps to identify areas where processes can be optimized to reduce the time to deploy. By reducing the time to deploy, businesses can save costs by not having to pay for unnecessary resources.
Cloud ROI
The cloud ROI KPI measures the return on investment of cloud services. This KPI is important because it helps to identify whether the investment in cloud services is providing value to the business. By measuring cloud ROI, businesses can make informed decisions about future cloud investments.
Conclusion
The above FinOps KPIs are essential for cloud businesses to set and monitor to effectively manage cloud costs. By measuring and analyzing these KPIs, businesses can identify areas where costs can be reduced, resources can be optimized, and investments can be made more effectively. The ultimate goal of FinOps is to provide businesses with the visibility and control necessary to manage cloud costs effectively and efficiently.
