Unlocking significant cost savings with FinOps cloud operating models

At a glance

Solution

40% reduction in AWS spend

Delivered with Cevo

D6 capability

Project Management

FinOps

Industry

Financial services

A prominent financial services organisation in Australia and New Zealand faced challenges with overspending on AWS infrastructure due to inefficient resource management. D6 was engaged to oversee the implementation of a FinOps-based cost optimisation methodology leveraging automation and various AWS tools. This resulted in a 40% reduction in AWS spend, improved resource allocation efficiency, and proactive performance enhancement, fostering innovation and new growth opportunities for the organisation. Structured project cadence and executive buy-in enhanced project visibility and smooth integration of the change.

Business challenge

The financial organisation faced challenges relating to overspending on their AWS infrastructure, due to inefficiencies in resource allocation and management. Their existing approach to managing AWS resources was manual and reactive. They lacked a systematic way to identify idle, underutilised, or oversized resources, resulting in resource wastage and higher-than-necessary costs. With a diverse set of AWS resources, including EC2 instances, RDS databases, EBS volumes, S3 buckets, Redshift clusters, and CloudWatch metrics, the organisation struggled to effectively manage the complexity of its cloud environment. This hindered their ability to optimise resources without specialised tools and automation. There was a need for a comprehensive solution to optimise and streamline their cloud resources.

In addition, the organisation lacked necessary visibility into its cloud spending patterns and usage trends. This lack of insight into their cloud environment made it challenging to proactively identify areas for cost-saving opportunities and hindered their ability to make informed decisions regarding resource utilisation and budget allocation. They needed a solution that would automatically recommend and execute resource rightsizing based on actual usage patterns and best practices, allowing them to achieve optimal performance while minimising costs.

Solution

FinOps Program Management

D6 partnered with the financial services organisation to oversee the implementation of the FinOps cost optimisation methodology. In collaboration with our sibling business, Cevo, whose consultants handled the technical implementation, D6 introduced an agile framework and governance structure for efficient program management.

Overview of the D6 agile framework

FinOps Project Cadence

Establishing a well-defined project cadence was essential for achieving improved visibility, transparency and collaboration throughout the project. This cadence was realised through:

  • Daily scrum stand-up – This involved monitoring progress, tracking cloud costs and usage, and identifying anomalies for quick resolution.
  • Weekly project status and technical review forums – This included analysing cloud cost trends and variances, implementing optimisation strategies, and sharing best practices.
  • Fortnightly scrum ceremonies – These ceremonies entailed reviewing cloud costs and usage by business units, products and services, adjusting plans based on the comparison of actual expenses and projected cost savings.
  • Monthly steering committee updates – This involved evaluating cloud costs against business objectives, assessing FinOps initiatives and celebrating achievements.

The FinOps program followed a systemic approach, including the following key steps:

Step 1: Discovery

Extensive research was conducted to identify and engage with key stakeholders across the organisation’s business and technology landscape. This involved engaging with directors, heads of technology, platform owners, senior executives, finance managers, cloud engineers, product owners, and other subject matter experts. The goal was to gain a deep understanding of the organisation’s specific pain points, needs, and expectations regarding cloud costs and value.

Step 2: Plan

We envisioned future states to illustrate how FinOps could help the organisation achieve its business objectives and cloud vision. This involved formulating the organisational structure, identifying tool requirements, and determining key performance indicators essential for successful FinOps practice.

Step 3: Executive buy-in

The FinOps execution plan was presented to the organisation’s senior executives to secure their sponsorship and support for FinOps initiatives. The presentation highlighted the benefits, challenges, and risks associated with FinOps, demonstrating how they aligned with the organisation’s goals and culture.

Step 4: Formation of the FinOps team

Resourcing requirements were assessed, resulting in the assembly of a cross-functional team comprising finance, engineering, business, and technology experts. This team played a crucial role in driving the FinOps practice and culture. During this stage, we defined roles, responsibilities, skills, and necessary training and tools.

Step 5: Establishment of FinOps processes

A comprehensive FinOps framework covering the three phases of cloud financial management – inform, optimise, and operate – was established. This involved implementing cost optimisation strategies, utilising cost allocation and reporting tools, implementing real-time monitoring and alerting systems, and establishing governance and controls for cloud costs and usage.

Step 6: Measurement and improvement

In the final stage, we tracked and reported the progress and outcomes of the FinOps practice using metrics such as cloud cost savings, spend efficiency, value delivery, and governance maturity. This facilitated the identification of gaps, challenges, and opportunities for improvement, which were subsequently presented to the cloud centre of excellence team to iterate the FinOps benefits.

FinOps and the Change Process

The change process combined agile and collaborative methods, integrating the iterative phases of FinOps: Inform, Optimise, and Operate. This process involved visualising, allocating, benchmarking, and forecasting cloud usage (Inform), maximising instance elasticity and right-sizing for cost savings (Optimise), and embedding FinOps as a regular practice (Operate).

For more information about the technical solution implemented by Cevo’s consultants, read more here.

Outcomes

The implementation of the FinOps program has resulted in several tangible business outcomes for the financial organisation:

  • Reduced AWS spend by 40% through the introduction of several cost optimisation measures, improving agility and financial strength.
  • Improved visibility of opportunities for further cost optimisation to encourage data-driven decision-making regarding resource utilisation and budget allocation for cost-efficient cloud management.
  • Automation-driven operational efficiency has optimised the organisation’s resource allocation.
  • Proactive performance improvements have fostered innovation and created new avenues for growth for the organisation, allowing them to pursue new business models and revenue sources.
 

D6’s approach to FinOps program management also resulted in the following benefits:

  • Enhanced project visibility and collaboration through the establishment of a structured project cadence, facilitating better communication and alignment on project goals.
  • Real-time, proactive anomaly detection and resolution allowing for optimised resource allocation.
  • Regular scrum ceremonies and monthly updates provided a mechanism to review cloud costs and usage by business units, products and services, allowing the project to make informed strategic adjustments by aligning the project trajectory with actual expenses and projected cost savings.
  • Executive sponsorship and support as a result of the executive buy-in stage, ensuring a conducive environment for project success.
  • Smooth integration of change via the integration of agile and collaborative methods into the change process to successfully embed FinOps as a regular practice.

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