In a world where managing cloud costs effectively is crucial, FinOps Cloud Policies and Governance play a vital role in helping organizations make the most of their cloud investments. These policies help ensure that companies are using their cloud resources in the smartest way possible, leading to better decision-making and more innovation, all while keeping costs under control.
This article aims to clearly outline what FinOps Cloud Policies and Governance involves. It will guide you through essential strategies and tools that help improve the management of cloud finances.
We will explore helpful resources and best practices for better policy and governance control across major cloud services like AWS, GCP, and Azure. Through this, organizations can learn how to use their cloud resources more effectively and make smarter financial decisions.
What are FinOps Cloud policies?
FinOps Cloud Policies are at the heart of managing and optimizing cloud costs effectively within an organization. They essentially act as guidelines, reflecting the organization’s intentions and strategic approaches to utilizing cloud resources efficiently and economically.
When paired with governance, these policies ensure that cloud-related activities adhere to FinOps Domains, promoting improved business value and enhanced operational efficiency.
What Makes a Good Cloud Policy?
A robust FinOps Cloud Policy is clear, authoritative, and precise, directly aligning with the organization’s objectives while ensuring practical applicability. Such policies should be designed considering their impact, ensuring that they foster enhancement without imposing disproportionate costs on the organization.
Here are a few examples of specific FinOps Cloud Policies:
- Ensuring that over 80% of optimized cloud usage is covered by discounted pricing plans, thereby aiming for substantial cost savings.
- Focus on minimizing wasted expenditure by decommissioning or reallocating cloud resources that do not deliver tangible business value, ensuring resources are utilized efficiently.
- Implementing strict monitoring and management policies to track and optimize cloud resource usage and expenses regularly, promoting a more proactive approach to cloud cost management.
What is Cloud Governance?
At its essence, Cloud Governance operationalizes and implements FinOps policies and strategies. It aligns cloud activities with broader business goals, overseeing the deployment and utilization of cloud resources to optimize returns on investment (ROI).
How does Cloud Governance Work?
Transitioning from a traditional data center culture to a more dynamic FinOps culture is facilitated through effective cloud governance, reinforcing practices and policies that echo the organizational objectives and strategies.
Governance ensures that cloud costs remain predictable and manageable, bolstering consistent adoption of best practices across organizational landscapes. It plays a vital role in supporting defenses against known threats and risks, enabling the organization to navigate the complexities of the cloud environment with enhanced foresight and resilience.
How Governance ensures that Cloud Policies are implemented-
- Guidelines: Advisory frameworks that delineate best practices for policy implementation, offering insights into achieving compliance effectively and efficiently.
- Guardrails: These are formal structures and processes that establish mandatory pathways for executing actions in compliance with policies, potentially imposing consequences for deviations or non-compliance.
- Automation: Governance leverages automation to bolster policy implementation, orchestrating compliant actions and operational efficiencies seamlessly.
Cloud Governance, when intertwined with robust policies, orchestrates a resilient and efficient cloud ecosystem, reinforcing an organization’s capacity to leverage cloud technologies for optimal business value sustainably.
FinOps Cloud Policy and Governance – Maturity Assessment
The visual representation reflects a diverse array of organizational maturity in implementing cloud governance policies across their FinOps personas.
- A noticeable 34.4% of organizations are in the initial “Crawl” phase, navigating through the foundational elements of cloud governance.
- A substantial majority, 51.4%, have progressed to the “Walk” phase, incorporating broader and more standardized measures of governance. These entities have embedded some formal governance policies, enhancing their cloud cost management practices.
- A select 14.2% have ascended to the “Run” maturity level, where comprehensive policies ranging from provisioning to IAM role and SME ownership policies are firmly established and operationalized across all FinOps personas.
Measures of Success and Maturity Levels in Cloud Policy & Governance
Here is a description of the maturity levels and what they mean for organizations that wish to implement Cloud Policy & Governance.
|Measure(s) of CP&G||Crawl||Walk||Run|
|Scope of CP&G||Across Engineering teams||Cross-functional, across Business, Technical & Finance teams||Across the organization, linking CP&G to strategic goals|
|Creating & Updating||Manually, ad-hoc, largely reactive policy creation||Regular review cadence, proactive FinOps policies||Ongoing automated policy compliance review, with trending|
|Documenting & Communicating||Static, manually distributed content||KMS / training integrated solutions||Integration with new architectural concepts to ensure currency|
|Monitoring for Compliance||Manual analysis & reporting||Vendor-provided automated analytics (e.g., AWS Config)||Multi-cloud/enriched normalized insights & automation solution|
In this embryonic phase, organizations begin to explore and establish Cloud Policy & Governance as part of their overarching business policy. Here, the policies are rudimentary but crucial, focused primarily on mitigating significant risks to business value and fostering basic usage and rate optimization applicable to individual engineering teams and products.
Progressing to this level signifies the evolution and standardization of Cloud Policy & Governance measures. Policies and best practices begin to unfold across the organizational spectrum, fostering cross-functional collaboration and a seamless integration with existing organizational policies and standards.
This advanced phase embodies the close integration of Cloud Policy & Governance with the broader business strategy. Policies and governance mechanisms are ingrained across all organizational levels, ensuring that operations are finely aligned with the strategic goals and objectives of the enterprise.
5 Best Practices for FinOps Cloud Policy and Governance
Cloud Policy & Governance Resources for AWS, GCP, and Azure
We have curated a selection of resources and tools to help you get started with implementing policy and governance with your chosen cloud provider.
Google Cloud Platform (GCP) Cloud Policy and Governance
GCP’s Guide to Financial Governance is a comprehensive manual that elucidates the nuances of financial governance in the cloud ecosystem. It intricately outlines the strategies, best practices, and essential FinOps tools and services that serve as the bedrock of efficient financial governance within cloud architectures.
Amazon Web Services (AWS)
AWS Control Tower – serves as a pivotal tool for the establishment and governance of a secure, multi-account AWS environment. It streamlines the process of setting up a well-architected multi-account environment, facilitating swift and automated creation of AWS accounts fortified with intrinsic governance capabilities.
AWS Organizations – is a robust tool that facilitates the centralized management of your environment as you scale your AWS resources. It offers a plethora of features such as automated AWS account creation, proactive protection through dedicated security groups, and the simplified sharing of common resources across accounts, ensuring a governed and optimized cloud environment.
Azure Blueprints are instrumental in enabling cloud architects to define a consistent set of Azure resources, ensuring adherence to organizational standards, patterns, and requirements. It allows the deployment of various resources and artifacts such as Role Assignments, Policy Assignments, and Azure Resource Manager templates.
Azure Management Groups offer a hierarchical governance structure, providing a spectrum of governance scopes above subscriptions. They facilitate the effective management of access, policies, and compliance across numerous Azure subscriptions, ensuring enterprise-grade management.
Embarking on the FinOps journey necessitates a continuous commitment to strategic refinement and adaptation, aligned with evolving business objectives and cloud management landscapes. We hope this guide can serve as a cornerstone in your voyage towards mastering cloud policies and governance, ultimately leading to a more sustainable, efficient, and innovative cloud operational paradigm.\
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