Decoding FinOps Framework 2024 Updates: Implications for ITAM Professionals

The FinOps Foundation recently updated the FinOps Framework, which serves as the overarching structure for operationalizing FinOps in an enterprise. The framework encompasses domains, capabilities, personas, and phases that govern cloud cost management across an enterprise. Here is the newly unveiled framework on March 22.

Credit: The FinOps Foundation

Originally developed in 2021, the framework has undergone a major update with the assistance and guidance of the Technical Advisory Council (TAC), with Flexera playing a pivotal role.

There are three significant updates to the framework that affect ITAM professionals like yourself.

1. Expanded definition of FinOps: The definition of FinOps has become all-encompassing, broadening the scope of cloud costs. It is about providing business advantages beyond simply reducing the cloud bill. The other change has been a shift from focus on public cloud to managing all cloud costs, which expands the scope to SaaS, hybrid software licensing, on-premises private clouds, variable-cost platform-as-a-service or licensed products, and other consumption-based services.

2. Recognition of ITAM as an allied persona: In alignment with this, the FinOps Foundation has recognized ITAM as an allied persona, grouped under intersecting disciplines. These crossing disciplines play a crucial role in governing cloud as companies may not always have a dedicated FinOps function.

3. Changes to capabilities: As the scope of FinOps extends beyond public cloud, it has added additional capabilities to its domain titled “Optimize Cloud Usage & Rate.” “Licensing & Software as a Service (SaaS)” has been added as a new capability. This update fosters new collaboration and helps build a stronger governance model for enterprises.

Credit: The FinOps Foundation

So, what are the implications for ITAM? These changes are a real door opener for ITAM, fostering new collaboration, sharing of data, and helping build a stronger governance model for enterprises. Licensing represents software costs and a substantial hidden expense when companies transition to the cloud. It is a significant aspect of reducing total cost of ownership (TCO). Organizations with a heavy reliance on FinOps may be paying an exorbitant price for cloud licenses when they could potentially be saving more than 80% compared to pay-as-you-go pricing.

What are some action items for ITAM professionals?

Furthering collaboration between FinOps and ITAM teams

FinOps and ITAM are converging, as predicted by Gartner, and this update is a step in the right direction. The intersection of FinOps and ITAM offers a powerful synergy for organizations seeking to enhance their cost management efforts. By leveraging the strengths of both disciplines, organizations navigate the complexities of cost allocation, data analysis, anomaly management, shared cost distribution, and more.