FinOps Domains & Capabilities

Question 1

Describes the fundamental business outcomes organizations should achieve from the FinOps practice

Answer 1

The Domains of the FinOps Framework describe

Question 2

The areas of activity required to meet the challenges of the FinOps practice itself. They can be thought of as building blocks that enable, educate, and bridge actionable tasks across FinOps Personas and align technology decisions with business objectives

Answer 2

FinOps Capabilities

Question 3

enables an organization to better understand what cloud services it is using, what is driving spend, and who is responsible for that spend

Answer 3

Understand Cloud Usage & Cost Domain

Question 4

What questions do we answer int he Understanding Cost and Usage Domain?

Answer 4

What are we using in the cloud
What are we spending on it
What is the impact of that usage in carbon and other metrics
Who in the org is responsible for that usage and cost
How can all personas access that cost and usage data

Question 5

Collect, transfer, store, and normalize data from various sources, with a goal of creating a complete, contextual dataset of cloud usage and cost data available for analysis.

Answer 5

Understand Cloud Usage & Cost Domain: Data Ingestion

Question 6

Involves gathering, transferring, processing, transforming, and correlating various datasets to create a queryable, contextualized repository, at the appropriate level of granularity, accessibility, and completeness to support activities in all of the FinOps Capabilities across all FinOps Personas.

Answer 6

Understand Cloud Usage & Cost Domain: Data Ingestion

Question 7

Define strategies to assign and share cloud costs using accounts, tags, labels, and other metadata, creating accountability among teams and projects within an organization.

Answer 7

Understand Cloud Usage & Cost Domain: Allocation

Question 8

Analyze cloud data and create reporting to gain insights into usage and spend patterns, identify opportunities for improvement, and support informed decision-making about cloud resources.

Answer 8

Understand Cloud Usage & Cost Domain: Reporting and Analytics

Question 9

Defines how cloud costs should be apportioned to those responsible for each component of that cost, whether directly or as a shared element.

In the context of FinOps, this involves using account structures, tags, labels, and derived metadata to identify categories to which we assign costs in a way that provides product managers, engineers, and other personas with a transparent and complete understanding of the cost of cloud resources for which they are responsible.

Requires three primary strategies:

Allocation Strategy - how costs should be mapped to the organization
Tagging Strategy - how cloud usage and resources will be mapped to the defined parts of the organization
Shared Cost Strategy - how each set of shared resources will be allocated to budgets

Answer 9

Understand Cloud Usage & Cost Domain: Allocation

Question 10

is the ability to gain insights into cloud data by creating reporting mechanisms to serve the needs of the organization’s various persona groups

Answer 10

Understand Cloud Usage & Cost Domain: Reporting and Analytics

Question 11

Detect, identify, alert and manage unexpected or unforecasted cloud cost and usage irregularities in a timely manner to lower risk in cost-effective cloud operations.

Answer 11

Understand Cloud Usage & Cost Domain: Anomaly Management

Question 12

connects usage with business value to ensure the value created and the impact of that usage are transparently within expectations

Answer 12

The Quantify Business Value Domain

Question 13

Estimation and exploration of potential cost and value of workloads if implemented in an organization’s cloud environment in a particular model or models.

Answer 13

Quantify Business Value: Planning and Estimating

Question 14

Enables organizations to estimate the future costs of a workload or system, considering the variety of services, updates, managed services, and models available in the cloud.

Estimating can be done for any scope, from a single service change to an entire application migrating to the cloud, and is primarily supported by engineering personas with input from FinOps teams, product, finance, or leadership when estimates are particularly important, impactful, or complex.

Planning & Estimating is closely related to Forecasting but focuses on exploratory ideation, producing inputs to cloud cost forecasts, and supporting Capabilities like Architecting for Cloud, Workload Optimization, or Onboarding Workloads.

Answer 14

Quantify Business Value: Planning and Estimating

Question 15

Creating a model of the anticipated future cost and value of cloud systems leveraging statistical methods, historical spend patterns, planned changes, and related metrics.

Answer 15

Quantify Business Value: Forecasting

Question 16

The strategic and ongoing process for setting limits, monitoring, and managing cloud spending, aligned with business objectives, to ensure accountability and predictable financial outcomes for cloud-based systems.

Answer 16

Quantify Business Value: Budgeting

Question 17

Using efficiency metrics to evaluate cloud optimization and value between parts of the organization or against industry peers to inform decision-making and align FinOps with business objectives.

Answer 17

Quantify Business Value: Benchmarking

Question 18

Allows organizations to compare unit metrics and KPIs(opens in a new tab) for important aspects of cloud value and optimization both internally between different teams and externally with other organizations using cloud in similar ways.

Answer 18

Quantify Business Value: Benchmarking

Question 19

Develop and track metrics that provide an understanding of how an organization’s cloud use and cloud management practices impact the value of the organization’s products, services, or activities.

Answer 19

Quantify Business Value: Unit Economics

Question 20

Unit Economics bridges the gap between what an organization spends on cloud and the fundamental value that cloud spending creates. Without understanding how to track costs to benefits received, we are missing the context that tells us whether we are spending appropriately.

Answer 20

Quantify Business Value: Unit Economics

Question 21

Targets cloud efficiency by designing and building systems effectively, reducing waste and unnecessary usage over time, and optimizing rates paid for needed resources.

Answer 21

The Optimize Cloud Usage & Cost Domain

Question 22

Designing and modernizing solutions with cost awareness and efficiency to maximize business value while achieving performance, scalability, and operational objectives.

Answer 22

Optimize Cloud Usage & Cost Domain: Architecting for Cloud

Question 23

Driving cloud rate efficiency through a combination of negotiated discounts, commitment discounts (RIs, Savings Plans, Committed Use Discounts), and other pricing mechanisms to meet the organization’s operational and budgetary objectives.

Answer 23

Optimize Cloud Usage & Cost Domain: Rate Optimization

Question 24

Analyze and optimize cloud resources to match specific usage patterns while ensuring that workloads operate efficiently and generate sufficient business value for their cost.

Answer 24

Optimize Cloud Usage & Cost Domain: Workload Optimization

Question 25

The central FinOps team should coordinate the purchase of commitment discounts, as they are complex, have many parameters, and can be purchased in ways that allow their benefits to cover resources throughout the organization’s cloud estate.

Answer 25

Optimize Cloud Usage & Cost Domain: Rate Optimization

Question 26

set of practices that ensure that cloud resources are properly selected, correctly sized, only run when needed, appropriately configured, and highly utilized in order to meet all functional and non-functional requirements at the lowest cost. This work is primarily done by engineering, using guidelines and strategies formed collaboratively with the FinOps, product, and other personas.

Answer 26

Optimize Cloud Usage & Cost Domain: Workload Optimization

Question 27

allows engineers and product personas to balance environmental considerations alongside financial costs or benefits of the cloud when architecting, optimizing, and deploying workloads in the cloud.

Answer 27

Optimize Cloud Usage & Cost Domain: Cloud Sustainability

Question 28

Understanding and optimizing the impact of software licenses and SaaS investments on an organization’s cloud cost structure and value by understanding vendor-specific licensing terms, use rights, and pricing options, planning for appropriate use aimed to minimize over-deployment (a compliance risk) or under-deployment (shelfware/waste), and collaborating with finance, procurement, and legal teams.

Answer 28

Optimize Cloud Usage & Cost Domain: Licensing & SaaS

Question 29

enables continuous improvement to change and align the entire organization – its people, processes and technology – to adopt FinOps and use cloud in ways that create value for the company.

Answer 29

The Manage the FinOps Practice Domain

Question 30

Driving a culture of accountability by running an effective FinOps team that empowers the FinOps practice through continuous implementation of FinOps strategy and processes.

Answer 30

Manage the FinOps Practice Domain: FinOps Practice Operations

Question 31

Every organization’s FinOps practice is unique, and so are FinOps teams.

Answer 31

These people might work in a single central team, in a fully virtual team, in a hub and spoke model, or in other designs, depending on the needs and structure of the organization. The FinOps team is intended throughout the FinOps Framework as an inclusive term referring to the group of people enabling, performing, and supporting the FinOps practice, regardless of how they are organized or named.

Question 32

Establishing and evolving policies, controls, and governance mechanisms to ensure that cloud use aligns with business objectives, complies with regulatory requirements, and optimizes cloud resources efficiently.

Answer 32

Manage the FinOps Practice Domain: Cloud Policy and Governance

Question 33

Conducting repeatable, measurable, thoughtful analysis of the maturity of a FinOps practice in the context of the FinOps Framework for insights into strengths and areas for improvement of FinOps activities.

Answer 33

Manage the FinOps Practice Domain: FinOps Assessment

Question 34

Developing criteria and methodology to effectively integrate FinOps tools and services that align to the Framework Capabilities to empower the FinOps practice.

Answer 34

Manage the FinOps Practice Domain: FinOps Tools & Services

Question 35

Training, skill development, and practical activities that enable teams throughout the organization to adopt and deliver the FinOps practice.

Answer 35

Manage the FinOps Practice Domain: FinOps Education & Enablement

Question 36

Developing specific reporting, cloud invoice reconciliation workflows and chargeback models, in direct collaboration with finance personas with input from product and engineering personas, to align cloud cost data and reporting to specific budgets and accounting requirements.

Answer 36

Manage the FinOps Practice Domain: Invoicing & Chargeback

Question 37

Orchestrating the migration of systems into, or between, cloud environments in a way that provides transparency to cost, usage, and impact; supports operational objectives; and establishes or maintains cost effectiveness.

Answer 37

Manage the FinOps Practice Domain: Onboarding Workloads

Question 38

Coordinating activities with interconnected disciplines or Allied Personas (such as, ITAM, ITFM, Sustainability, Security) that manage responsibilities broader than just cloud, and which must integrate into the organizational cloud strategy by collaborating with FinOps.

Answer 38

Manage the FinOps Practice Domain: Intersecting Disciplines