Written by: Antony Mitchell, FinOps Specialist
9th December 2024
Introduction
Recently, a former colleague reached out because their sister, who works in finance, had come across the term "FinOps" and wanted to learn more. I was happy to meet up and share my insights. Over lunch, we discussed what FinOps is, my experiences as a FinOps Specialist, and how I got into the role. Despite the enthusiasm, I noticed that as we delved into certain technical terms, there were moments when their interest faded, a common reaction I have encountered after over three years in the field.
This led me to reflect on two important points:
- How different audiences perceive the terminology we use.
- How language varies across various parts of the business.
What is FinOps?
At the core, FinOps stands for "Financial Operations," much like DevOps signifies the collaboration between development and operations teams. According to the FinOps Foundation, FinOps is a portmanteau of ‘Finance’ and ‘DevOps,’ emphasising the communication and collaboration between business and engineering teams.
While this might seem straightforward, in a non-cloud business, interactions between finance and engineering are often limited to budget approvals or forecasting. FinOps bridges this gap, creating a cultural shift. It is not just about finance overseeing annual budgets or technology teams working in silos; it is about continuous cost awareness and optimisation, aligning financial and operational goals.
The primary goal of FinOps is not simply to save money - it is to maximise value and profits. Keep an eye out for an upcoming blog post where I will dive deeper into this.
Bridging the Gap Between Audiences
When I talk about FinOps, I usually engage with two main audiences: technology leaders or teams and finance departments, from CFOs to credit control. Each group approaches the topic differently, so it is crucial to use language that resonates with both. For this article, I will skip discussing specific cloud services, as they differ across providers. Instead, let us focus on universal terms in the FinOps world:
Key FinOps Terms Explained:
Allocation Metadata: Information used to categorise costs based on where a resource is in your environment.
Cost and Usage Reporting: The data source that cloud service providers use to derive your bill for the cloud services consumed.
Chargeback: A method that makes teams directly accountable for their spending, often used as a financial allocation strategy.
Showback: A strategy that shows actual consumption without directly charging teams but still informs them of their usage.
CapEx: Capital expenditure - large, one-time purchases that provide long-term value.
OpEx: Operational expenditure - recurring costs associated with ongoing operations.
Shared Costs: Expenses attributed to multiple
