How is FinOps similar to IT asset management
Commercial and consumption cost optimisation
Both FinOps and IT asset management are designed to optimise an organisation’s IT spend in two specific areas: commercial and consumption.
With FinOps, optimising commercial spend may involve negotiating contract terms with hyperscale cloud providers; scaling agreements up or down; or effectively pre-planning for a workload migration.
With IT asset management, it may involve merging agreements to achieve economies of scale; selecting optimal software license models to match appropriate technology use cases; or investing in software publisher expertise to support with negotiation and contracting.
From a consumption point of view, FinOps is typically focused on things like turning off unused resources, introducing scheduling, or – in more complex scenarios – establishing an organisational tagging and reporting strategy, or implementing workload right-sizing. At advanced levels, it may involve application redesign or refactoring.
From a consumption control perspective, IT asset management typically involves preventing software license purchases where existing software can be re-harvested; recommending employees use cheaper software that has been approved by the business; reducing unlicensed software to reduce the risks associated with software compliance audits, or making application design decisions that are licence-optimised.
As IT shifts to become more of a ‘service’ provided to the business, it’s becoming increasingly important for IT spend to be itemised and ‘charged back’ to departments within the organisation. Where ‘charge back’ is not, or only partially, supported, it’s still important to be able to show where costs are incurred, so the business can track where consumption is taking place, and at what magnitude.
Both IT asset management and FinOps have the ability to provide the organisation with granular visibility to support this. With IT asset management, this typically involves assigning software and hardware to end users through a manual ‘assignment’ process which can be facilitated by IT asset management tools. In FinOps, the discipline is called ‘tagging’. In both cases, strategies, policies and supporting business processes need to be defined for it to be effective.
Ideally, both IT asset management and FinOps should promote better collaboration between the business and technical stakeholders. Both disciplines are heavily integrated into numerous existing business processes. It’s only through delivering effective reporting and supportive outcomes to inter-dependant stakeholders that they will be valued and sustained.