Your company is growing and each department is buying new SaaS tools independently. By the time you notice redundant subscriptions and missed renewals, the costs are already too high. Meanwhile, your finance team does not have a clear picture of SaaS spending. They only see untracked apps, unused licenses, and uncoordinated renewals. All these lead the company to unexpected expenses.
Implementing FinOps in the earlier stage is a solution for the above problems. It provides the visibility and control needed to manage SaaS costs before they go out of control.
What is FinOps?
Financial Operations is also known as FinOps. It is a practice of introducing financial accountability to cloud spending. It helps businesses manage and control their software costs. Instead of waiting until the end of the month to see bills, this new practice gives real-time data. It helps to track, manage, and save money while using software tools.
FinOps works by bringing all the departments of the company together. Everyone works together to make sure the company is spending money wisely. In this way, everyone will be responsible for the costs of the apps they use.
The three main parts of FinOps
For FinOps to work efficiently, it requires the integration of three main pillars. They are visibility, optimization, and control. These parts work together to help businesses track, manage, and reduce cloud spending. Organizations can bring down cloud costs. It can do this while maintaining efficiency and alignment with business goals. The three pillars are:
- Visibility to inform the company's money flow. This means knowing where the money is going. FinOps helps you to see which apps are being used and if there is a need for cancellation of any apps. It also tracks apps that are being used without proper approval. Thus, companies get transparency about their spending in real-time data.
- Optimize the Cost by saving money. FinOps helps find unused licenses and duplicate apps. Hence it ensures resources are used effectively. For example, if a company is paying for two similar apps, FinOps helps combine them into one to save money.
- Control brings accountability to the process. It empowers teams to make informed decisions and manage cloud costs proactively.
Together these three pillars ensure a well-rounded, sustainable approach to cloud financial management.
Why should companies focus on FinOps?
The following shows the reasons why a company should focus on FinOps.
- It helps to control SaaS expansion. In a company, different teams buy the same apps without telling others. This leads to multiple subscriptions to similar tools, which can waste money. FinOps helps companies spot these problems and join tools.
- The unexpected charges can be avoided. Some apps charge based on how much they are used. Without tracking usage, companies may be surprised by high bills. FinOps helps companies monitor usage and avoid these surprises.
- The unused licenses can be reclaimed. Some apps keep charging for licenses even when no one is using the app. FinOps helps track who is using what and cancel unused licenses. Thus, it saves money.
- The missed renewals are notified to the company. Sometimes company may forget the renewal of app subscriptions. This can end up in paying higher rates. FinOps tracks when renewals are coming up. And alerts the team to review and renegotiate the terms.
- The budget planning is improved by using FinOps. With better tracking, companies can predict how much they will spend on apps in the future. this helps them plan their budget more accurately.
- There is better collaboration and accountability while using this practice. FinOps helps different teams work together. By sharing the responsibility of managing app usage, everyone becomes more aware of their spending. It also helps in making the best choices.
Core principles of FinOps
The FinOps works on some core principles. These principles help companies stay on track and save money.
- The collaboration of the team is very important. If the company is using FinOps practices, then all the departments should share the data. They should make decisions as a group to control costs.
- Decisions are driven by the business values. In FinOps, every choice related to software, and cloud tools is guided by their benefits to the company. Thus, it ensures the investments and resources are allocated efficiently. And it directly contributes to the business growth.
- The usage and spending are each department's responsibility. This way one knows what they are using and why they are paying for it.
- FinOps uses real-time data. So, companies can track spending and usage whenever it happens. This helps the team make changes before the cost gets too high.
- FinOps uses automation to make things easier. By automating tasks like license tracking and renewal reminders, companies save time and reduce errors.
Conclusion
Instead of jumping between multiple apps for daily tasks, super apps bring everything into one platform. This has changed the way we use mobile apps for our daily tasks. A super app makes our lives more convenient and efficient. By combining multiple services, they create opportunities for business also. As these apps continue to grow and evolve, they will play a vital role in shaping a smarter more sustainable future for everyone.
FAQ
FinOps helps you to track app usage and avoid unused licenses. It also ensures that teams work together to make decisions about software usage. It also prevents unexpected charges.
FinOps saves money by identifying unused licenses and avoiding duplicate apps. It ensures the renewals are not missed. It also helps companies by avoiding paying for unnecessary apps.
The key principles of FinOps are collaboration, real-time data, and accountability. It can also automate to manage SaaS costs efficiently.
