How to build value in government cloud adoption

The importance of making FinOps the foundation of your cloud deployment models  

Government and public-sector organizations have new opportunities to modernize services, reduce IT costs, strengthen security and gain greater scalability and agility through cloud computing. But they often encounter financial complexities on their cloud adoption journey.

We’re seeing how attempts to create governance models, controls, data and workforce structures—what we refer to as the cloud finance and operations framework—after a cloud implementation magnify these complexities and cause costs to escalate. Realizing the benefits of a cloud transformation involves more than just switching up your IT. Effectively managing cloud operations and finances also requires rethinking your operations up front—everything from technology, to processes, to your people.

Cloud finance and operations optimization, or Cloud FinOps, is a proven set of management practices and supporting tools that bring together finance, technology and program delivery teams to better manage costs and increase value for the organization across the cloud life cycle.

At its core, FinOps brings financial and operations maturity to a new service. But it’s evolved beyond cost and process management practices applied to individual services to become a part of an operational and cultural framework for organizations.

This gives you more control over your cloud spend at each step—from value-based procurement and operational cost-savings opportunities through to monitoring of cloud expenditure and consumption patterns—and greater assurance over future costs.

It’s also important to start investing in these capabilities now. The shift to cloud hyperscalers becomes inevitable as departments look to take full advantage of generative artificial intelligence, machine learning and software-as-a-service offerings, to name but a few. Organizations that move quickly can realize the full benefits of cloud technologies while controlling their costs—letting them focus on delivering services to citizens.

Several considerations can help you effectively implement your FinOps framework:

Financial management challenges can stem from the ease with which developers, administrators and other cloud users can provision cloud resources. Challenges also arise when business, tech and finance teams don’t adequately communicate and share data. This can lead to users consuming additional cloud resources without central oversight of whether they’re using the services effectively.

It’s helpful to start by establishing a cloud assessment framework. This helps you make sound investment decisions and decide when and what to move to specific cloud platforms and what to keep on-premises. Additionally, clearly defined policies, standards and procedures for cloud selection (over on-premises), procurement and consumption can make sure individuals within an organization consume cloud resources in line with approved business cases. This helps align cloud spending with business objectives, prevents over-provisioning and creates a way to accurately forecast cloud spending.

This requires upfront planning and coordination. Finance, IT and program delivery leaders can start building effective governance models and controls by developing a shared understanding of their organization’s desired outcomes, the cloud capabilities needed and the expected consumption of cloud services.

Organizations often only collect data on cloud consumption and spending at certain points of the cloud life cycle. They must then analyze the data to uncover useful information for planning and forecasting purposes. But the specificity of when the data is collected hinders their ability to make timely, evidence-based decisions that prevent overspending.

Organizations can overcome these challenges by continuously improving how they collect and use data. This includes creating automated data feeds that provide real-time visibility into cloud usage through optimization of data analysis. This helps organizations better quantify their consumption of cloud services and understand where that consumption is occurring.

It also lets organizations build processes to track cloud costs back to approved business cases, help make sure consumption rates are within budget and better forecast future spending.

Consider the common scenario of an engineering team testing a new digital component. They'll create a cloud development environment, run their tests and move the component to a production environment. But oftentimes, they never take down the development environment. One reason for this is that their performance is typically evaluated based on the product they created, not on how well they managed cloud costs. That orphaned development environment then continues to incur costs month after month.

Finance, IT and program delivery leaders can play a crucial role in correcting this misalignment. It starts by setting the right tone from the top for their workforce and giving employees the necessary tools to follow better processes. This helps organizations establish clear ownership of cloud costs, set up the proper controls, communicate expectations for employees to monitor spend and incentivize effective management of cloud costs.

It’s part of a broader cultural shift—one that involves finance, IT and program delivery teams aligning around a common vision and communicating early in the planning process and throughout the procurement, adoption, optimization and monitoring phases.