Last month, the FinOps Foundation hosted a summit conference to recap the year which included performance data across FinOps key capabilities and common FinOps challenges based on the 2023 State of FinOps Survey. Unlike last year, practitioners didn’t rate themselves within the survey, but based on their answers, the FinOps Foundation set a threshold to determine Crawl, Walk or Run status. This data was gathered through a survey sent out to practitioners around the globe with practitioners from every industry vertical able to compare their own FinOps maturity – Crawl, Walk, Run with others. The FinOps Summit attracts practitioners of all experiences with the main goal to improve on and build their FinOps practice. Below are our three big takeaways from this year’s event.
In 2022, most practitioners reported that forecasting is occurring on a quarterly basis. In 2023, we see an increased frequency of forecasting as a majority of practitioners (almost 50%) report that forecasting is taking place monthly. That is about a 25% increase of monthly forecasting since 2022. Based on the thresholds set by the FinOps Foundation, taking into account forecasting variance, 48% of practitioners landed in the crawl phase. During the summit, one of the practitioners on the panel speculated that the increased frequency was due to a higher comfort level with forecasting. However, there is also some belief that forecasting monthly is in response to the continuing volatility of the cloud industry. Clearly, forecasting is capability that practitioners are progressing in, with further room to grow. How often is your company forecasting? Are you tracking variance between budget and actuals? How granular are you forecasting (e.g. by Cost Center, Business Unit, Projects, etc.)
State of FinOps - Forecasting
Source: FinOps Foundation State of FinOps 2023
More and more organizations are tackling shared costs -- from running networking services to support costs -- for transparency and accuracy. During the FinOps Summit, respondents shared (no pun intended) how they allocate shared costs within their business. Although a majority of respondents report splitting up costs by proportion or percentage, the survey results did note that about 20% of respondents still do not split up shared costs for either showback or chargeback purposes. A decrease however, from 29% in 2022. As more and more business plan for allocating shared costs, the closer they become to painting a complete picture of product/services and their costs, allowing accountability throughout their organization. Which brings us to our next capability.
State of FinOps – Shared Costs
Source: FinOps Foundation State of FinOps 2023
The capability every business hopes to achieve - the measurement and accurate reporting of unit cost was a top challenge among practitioners this year. Unit cost can vary from business to business, for some it may be a subscription, transaction, service, product, or even a seat. The challenge comes with finding the appropriate metrics and reliable data to determine business value. In 2023, 67% of survey takers landed in the crawl maturity phase, with these practitioners in the beginning stages of using unit cost metrics. A starting point can include a clear understanding your cloud costs, including which costs are direct or shared? The gist of the findings -- measuring unit cost is no easy task and many are on the road to maturing, but the key is to start small with a clear focus on reliable metrics.
Source: FinOps Foundation State of FinOps 2023
Bottom Line: FinOps is still a relatively new discipline and cultural practice that continues to evolve. The FinOps Foundation has created a community of practitioners that learn from and build on each other’s experiences. The annual survey gives us a window into the trends and challenges facing the industry. Practitioners are able to compare their maturity to others and gain a level of comfort in where they are in their journey. Although the results show there are many FinOps teams that find themselves in the crawl phase, the key is to start small and mature from there. We encourage you to join the conversation with the ever-growing FinOps Foundation community of practitioners to learn from others alike.
To learn more about Trace3 Cloud FinOps, click here.Parker Stevens is a founding team member on the Trace3 Cloud FinOps team and continues to be a leader in the group since. During Parker’s tenure, the group has grown in spend under management by 5X and customers by 3x. He has been instrumental in all aspects of this growth including training of new employees, spearheading new offerings, leading sales/contracting efforts and saving customers millions of dollars in cloud spend!Parker combines great technical acumen with obsessive customer focus to help our customers not only succeed but thrive in their cloud journey. In his down-time he keeps up with the latest tech trends, is fascinated by Rubik's Cubes and enjoys 4x4 off-roading in the forest. In the work place he is always organized and full of life. His goal each day is to be able to motivate people to live passionately and do what they love in life as well as in his own.
Amanda Wagner is a Cloud FinOps Consultant at Trace3, who brings her energy and previous experiences as an educator to guide her customers on their cloud journey. Drawing from said educational expertise, Amanda is motivated by the mission to serve her customers and help them continue to build on their knowledge of cloud management. In her time with Trace3, she has earned her FinOps Certified Practitioner and Cloud Health AWS Administrator Certifications. Amanda lives in Tampa with her husband, Matthew and dog, Penny. She enjoys tending to her caterpillar habitat, where she raises caterpillars until they hatch into Monarch butterflies and can be released.