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FinOps & Cost Optimization

FinOps Maturity: From Reactive Chaos to Proactive Optimization

Amar BilasOctober 21, 20259 min read
FinOps Foundation defines 3 maturity stages. Here is how to progress from Crawl to Run:

## The FinOps Maturity Model

### Stage 1: Crawl (Reactive)
**Characteristics**:
- No cost visibility
- Surprise cloud bills
- No accountability
- Finger-pointing when costs spike

**Capabilities**:
- Basic tagging (50-70% resources tagged)
- Monthly cost reports
- Ad-hoc optimization
- Manual processes

**Outcome**: Firefighting mode, 10-15% savings from obvious waste

### Stage 2: Walk (Managed)
**Characteristics**:
- Some visibility
- Regular cost reviews
- Team awareness growing
- Optimization sprints

**Capabilities**:
- Comprehensive tagging (80-90% coverage)
- Weekly cost dashboards
- Reserved instance strategy
- Showback reports to teams

**Outcome**: Proactive management, 25-30% cumulative savings

### Stage 3: Run (Proactive)
**Characteristics**:
- Real-time visibility
- Automated optimization
- Cost-aware culture
- Continuous improvement

**Capabilities**:
- 100% resource tagging
- Real-time FinOps dashboard
- Automated rightsizing
- Anomaly detection with auto-response
- Cost-per-customer metrics

**Outcome**: Optimized operations, 35-45% total savings, no surprises

## Progressing Through Maturity Stages

**Crawl → Walk (90 days)**

Month 1:
- Implement tagging standard
- Set up cost allocation
- Identify top 10 cost drivers
- Quick wins (kill zombies)

Month 2:
- Weekly cost reviews with teams
- Rightsize over-provisioned resources
- Reserved instance purchases
- Auto-shutdown non-production

Month 3:
- FinOps dashboard (weekly updates)
- Showback reports to departments
- Optimization playbooks
- Team training on cost awareness

**Walk → Run (6-12 months)**

Months 1-3:
- Real-time cost dashboards
- Automated anomaly alerts
- Cost-per-transaction metrics
- Budget enforcement (hard limits)

Months 4-6:
- Automated rightsizing recommendations
- Self-service FinOps tools for teams
- Integration with CI/CD (cost awareness in development)
- Predictive cost modeling

Months 7-12:
- Automated optimization (schedule, rightsize, commit)
- Cost attribution to business units (chargeback)
- FinOps integrated into architecture reviews
- Continuous optimization culture

## Key Metrics by Stage

**Crawl Stage**:
- Cloud spend as % of revenue (baseline)
- Untagged resources % (target <30%)
- Month-over-month cost variance (reduce volatility)

**Walk Stage**:
- Cost per customer / transaction (unit economics)
- Reserved instance coverage % (target >60% for steady workloads)
- Time to detect cost anomaly (target <24 hours)

**Run Stage**:
- Cost per customer (optimized and decreasing)
- Automated optimization % (target >75% of recommendations auto-implemented)
- Team NPS on FinOps tools (target >40)

## Real Journey: SaaS Company

**Starting Point** (Crawl):
- $580K monthly AWS spend
- No tagging, no visibility
- Engineering requesting more budget monthly

**After 90 Days** (Walk):
- Tagging 85% complete
- Weekly cost reviews
- $178K monthly savings (31%)
- Teams aware of costs

**After 12 Months** (Run):
- Real-time dashboard
- Automated optimization
- $240K monthly savings (41%)
- Cost-per-customer decreasing monthly
- Engineering proactively optimizing

**Keys to Success**:
- Executive sponsorship
- Engineering buy-in
- Weekly rhythm
- Celebrate wins

FinOps is a journey, not a destination. Start crawling this week.

Tags

FinOpsMaturity ModelCloud Optimization

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