FinOps, which refers to cloud cost savings strategies, has emerged as a buzzword in just the past few years. But if you’ve worked in IT for a while, you know that strategies for reducing IT spending are nothing new. On the contrary, strategies such as IT asset management, or ITAM — a discipline that closely aligns with FinOps — have been around for years.
What this means — beyond the fact that FinOps is another example of a trendy buzzword that refers to something that’s not actually very novel — is that the traditional ITAM practices of IT operations teams can go a long way toward enabling and optimizing FinOps practices at the typical business.
Indeed, there’s a good argument to be made that ITAM and FinOps are really one and the same, and that the most practical way to operationalize FinOps is to treat it as an extension of ITAM.
Here’s why ITAM and FinOps go hand-in-hand, and how businesses can leverage both practices simultaneously to achieve the greatest overall cost savings.
IT asset management, or ITAM, is the practice of tracking, maintaining, and eventually disposing of IT resources that an organization owns.
By most definitions, ITAM is one of the functions that fall under the umbrella of IT service management, or ITSM, a responsibility owned by IT operations teams. Thus, ITAM has long been one of the tasks that ITOps engineers have managed at the typical organization.
FinOps, short for financial operations, is the practice of optimizing cloud spending. Although the term might seem to apply to cost management in general, it’s specific to the cloud in most cases.
FinOps has become a popular concept only in recent years. As many organizations have realized that their clouds are costing them more than they banked on, they have begun embracing FinOps as a way of reducing cloud costs without sacrificing cloud performance or reliability.
That said, ITAM and FinOps are more similar than they might appear. Ultimately, ITAM boils down to having a plan for knowing which IT assets your organization possesses and using those assets efficiently. FinOps is very similar in that its purpose is to help organizations understand which cloud resources they are using and identify inefficiencies that bloat costs.
Plus, it’s reasonable to argue that in a world where most IT organizations have embraced virtualization and software-defined everything, ITAM is no longer only about managing physical assets. An IT asset in the modern sense is any kind of IT resource — physical or virtual — that the business uses and that needs to be managed. Virtual machines and cloud-based desktops are assets that need to be managed through ITAM just as much as bare-metal servers or physical PCs.
To be clear, I’m not suggesting that a business can claim it’s “doing FinOps” just because it has an ITAM strategy in place, or vice versa. But I am suggesting that many of the functions and processes required to make FinOps work — like tracking virtual infrastructure usage, managing updates, and deciding when to sunset resources — can be handled by IT operations teams as part of ITAM. You don’t need to implement cloud asset management programs separately to do FinOps; you can leverage the ITAM program you already have in place.
To date, surprisingly few discussions of FinOps have addressed the similarities between ITAM and FinOps, or considered how the practices have reinforced each other. That’s a shame because in many cases it will be cheaper and faster to get started with FinOps if organizations implement FinOps by drawing on the ITAM functions their ITOps teams already have in place, rather than treating FinOps as an entirely distinct operation that needs to be implemented from scratch.
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