FinOps is a blend of "Finance" and "DevOps", which means the collaboration between finance and engineering. FinOps is a practice where business, finance, and engineering teams work together to extend visibility and optimize costs driven by data.
These best practices emerged with the on-demand and elastic nature of the cloud and customized pricing and discounts.
What is the FinOps lifecycle?
![FinOps Overview]()
The FinOps journey consists of three iterative phases - Inform, Optimize and Operate.
Inform
Empower organizations and teams with visibility, allocation, benchmarking, budgeting, and forecasting. An accurate distribution of cloud spending based on tags, accounts, and business mappings enables valid chargeback and showback. Stakeholders want to ensure they are driving ROI while staying within budget.
Optimize
Once businesses and teams are informed and empowered, they need to optimize their cloud footprint. While cloud providers offer multiple levers to do so, on-demand capacity remains the most expensive, encouraging advanced reservation planning and increased commitments. Rightsizing and automating turning off any wasteful use of resources can help optimize the environment.
Operate
Organizations assess and analyze business goals and metrics they can track, measuring their evolvement. These objectives are tracked daily. They measure business alignment based on speed, quality, and cost. Defining appropriate policies and governance models is a best practice.