FinOps in the cloud: the first steps towards cost transparency

In a world where the cloud plays a key role in business success, the wise use of cloud resources is crucial. While Microsoft Azure offers tremendous flexibility and scalability, it can be much more expensive than expected if not managed properly. 

That's where FinOps comes in: it's not just about keeping costs under control; it's about having a plan to increase the value of cloud investments.

The complete framework offers a variety of technical and organizational standards and measures. The sheer volume of topics can quickly become daunting.

Companies face the challenge that full FinOps adoption is time-consuming and labor-intensive. Despite the quick cost savings, many are reluctant to get started - even though it is known that 30% of all cloud spend is waste. 

I suggest you take at least the first simple steps. Steps that are not too complex or require a lot of time and manpower. First of all, you should create an internal cost awareness - for which the following three steps are crucial:

I recommend to our customers that anyone who sets up or manages cloud services should be made aware of the costs involved. When people understand the costs behind their platforms, they are more aware of their service choices and design.

Azure Cost Management can be used for this step. It is a powerful tool that provides a complete view of cloud spend. It allows you to not only monitor current costs, but also analyze historical data and forecast future spending. 

Make sure you have Cost Management enabled. If you purchase Azure through a CSP provider, they can enable Azure Cost Management for you and typically offer their own cost management solution.

Make sure your affected employees have access to the cost information. You do not need to give them access to the resources or stored data itself. All you need to do is assign them the role of "Billing Reader". This way, your employees can view the costs without compromising security.

With many customers, I see that the running cloud resources cannot be assigned to a team or even an employee. The freedom to set up and use the cloud has been granted, but without any minimum guidelines.

Of course, you should continue to give your employees this freedom. But make sure you always know which employee, or at least which team, is responsible for the resources you provision. In Azure, you can do this through tagging. Tagging can be used at different levels. For an easy start, you can start with the "Owner" tag based on the subscription and then pass the tag down to the resources and resource groups. This way, your employees do not have to remember to fill out the tag, and the information is added automatically. 

You can then use this tag in Azure Cost Management to identify which employees and teams are incurring which costs. Important: If you do not allocate costs internally, make that clear when you implement this tag. Remember the FinOps maxim: FinOps is not focused on cost, but on value. In short:

Avoid nasty surprises with your cloud bills. The flexibility of the cloud and the freedom of employees can quickly lead to expensive resources. The problem is that these costs are incurred in the current month, but you may not see them on your bill until the end of the month. Use budgets in Azure Cost Management. Again, you can start at the subscription level and set budgets. You can set annual, quarterly, and monthly budgets and have yourself or the owners alerted when the budget is exceeded or about to be exceeded. 

This allows you to intervene early and analyze why costs are suddenly spiking. In most cases, new resources have been added whose costs were not clear to employees, or the billing model was misunderstood. 

With cost visibility, owner tagging, and budgets, you now have a powerful tool to avoid these surprises.