IT professionals have been striving to manage cloud costs effectively since the inception of cloud computing. Those efforts have evolved into FinOps, a business discipline and a set of best practices to optimize cloud spending. Today, many organizations are applying automation to FinOps practices, which can produce even greater cost savings.

Successful FinOps automation requires strategies that exploit efficiencies from every angle of cloud optimization. Good data management, negotiations, data manipulation capabilities, and cloud cost distribution strategies are critical to automating cost-effective solutions to minimize cloud spend. This article focuses on how expert FinOps leaders have focused their automation efforts to achieve the greatest benefits. (See also: Will FinOps help reduce cloud waste in organizations?)

Case studies: Intuit and Roku

Intuit

Jason Rhoades, the development manager at Intuit, leads the company’s FinOps team. From 2016 to 2023, Intuit built a team focused on optimizing prepayment to control cloud costs and allocating those costs. The team, primarily composed of data and software engineers, has become adept at manipulating massive cloud data stores. Intuit’s approach is based on using AWS accounts as the key cost building block, reducing reliance on complex tagging schemes. This decision has significantly impacted Intuit’s automation strategy, making FinOps easier and more effective.

Intuit enforces data standards early on, ensuring that all relevant data is attached to hierarchies of attribution and “ownership at birth.” For multitenant technologies like Kubernetes, Intuit uses a distribution method called Intuit Kubernetes Service (IKS) to understand cost allocation within clusters. This approach allows Intuit to create “synthetic accounts” for accurate cost distribution and chargebacks.

Key areas where Intuit has performed FinOps automation include:

• Prepayment optimization
• Allocations and chargebacks
• Full allocations to avoid miscellaneous unknowns
• Accurate forecasting
• Cloud waste and collection reporting

Roku

Dieter Matzion, senior cloud governance engineer at Roku, emphasizes the 80/20 rule in managing cloud costs. Roku uses a case management tool to show savings by effort level, helping engineers prioritize cost-saving actions. For example, 83% of the savings might be low effort, 13% might be medium, and only 4% might be high effort. Low effort might be S3 intelligent tiering and elastic cash idle, and medium effort might be RDS rightsizing and EC2 compute rightsizing. This data can be displayed in a map graph so that engineers can see the opportunities by size and effort next to one another. This scenario represents the core goal of FinOps automation: to put the information about costs and savings at the forefront of everyone’s thinking and to then take advantage of the elasticity of the cloud, where if you don’t need something, you stop paying for it.

The team focuses on prepayment savings plans and reserved instances, which offer significant savings and flexibility.

Roku’s key areas of FinOps automation include:

• Horizontal and vertical Kubernetes autoscaling
• Amazon-managed Kafka service
• Real-time adjustments to prepayment products
• Dynamic container size adjustments
• Rehydration for production and fallback systems

Key practices for FinOps automation

• Data engineering: Effective automation relies on well-structured data. Intuit and Roku have demonstrated the importance of robust data management strategies, focusing on AWS accounts and Kubernetes cost allocation. Good data engineering enables transparency, visibility, and accurate budgeting and forecasting.
•  Targeting of high-cost areas: Automation efforts should focus on areas with the highest potential for cost savings, such as prepayment optimization and waste reduction. Intuit and Roku have achieved significant savings by targeting these high-cost areas.
• Engineer-friendly tools: Automation tools should be accessible and user-friendly for engineers managing cloud resources. Intuit and Roku have developed tools that simplify resource management and align costs with responsible teams. Automated reporting and forecasting tools help engineers make informed decisions.

FinOps automation is essential for reducing cloud costs and improving financial accountability. By investing in data engineering, targeting high-cost areas, and developing engineer-friendly tools, organizations can achieve significant cost savings and optimize cloud spending. The experiences of Intuit and Roku serve as valuable examples of how effective FinOps automation practices can lead to improved financial performance and operational efficiency.

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Bob Multhaup is an adjunct research advisor with IDC’s IT Executive Programs (IEP), focusing on IT business and financial management. He has had extensive experience as a CIO, including serving as the divisional information officer for two Sandoz divisions, as vice president of IT for Henkel N.A., and as vice president of IT for Cognis Corp. In these positions, Bob worked in Europe managing large international IT organizations, developing strategic IT plans, aligning IT to business goals, and consolidating global IT costs and organizations.