2: THE REINCARNATION OF THE FINOPS ROLE
But first .. What is Fin Ops?
When FinOps reports into the CFO org, the title is mostly borrowed from the R&D org. Traditionally, FinOps was an extension of DevOps. When costs weren’t scaling when DevOps were asked to, FinOps were hired by R&D teams.
Regardless, FinOps is a specialized role or a framework that sits at the intersection of finance, operations and engineering to make informed decisions about cloud investments, spending and resource utilization.
Is FinOps a cost cutter? No. FinOps experts maximize value. FinOps aims to analyze cloud spending, identify cost saving opportunities and allocate costs to specific teams, projects or products.
The Financial Operations Manager under the CFO
Before AI really entered our lives, the finance FinOps role came under some pretty direct criticism. The FinOps expert was technically sound and advanced, but was seen as disconnected from the Finance’s “core” processes and lacked Finance and Accounting academic expertise.
With the advent of Generative AI and its associated complexity, the FinOps role has become one of the most important roles to make value based purchase decisions for people, process and systems.
But, news flash!
As of the date of writing this article, there were zero employed senior FinOps roles within the office of the CFO. The most senior title was “Senior Financial Operations Analyst”
The expectation on a finance leader to work with Engineering teams and push the priority of deploying their (Finance) internal tools is a failed technique, unless there are dedicated resources to work with Finance, which is almost never the case with companies smaller than large companies.
The CFO organization needs to think more broadly
Optimization needs to extend beyond planning cycles
An organization typically starts with a strategic plan, then an Annual Operating Plan and quarterly budget refreshes. And throughout the process, Finance teams do a decent job of short listing areas to scale and optimize.
But scaling Product & Engineering costs are quite often the hardest puzzle to solve, due to lack of subject matter expertise on the Finance side. Everything and in between productivity, performance and rollout effectiveness should be tracked and robust business processes need to be followed to ensure there are no budget surprises.
AI initiatives need to be thought of holistically across the organization
There are initiatives that boost productivity and those that drive growth and it is crucial for those architecting the financial plan to get intimately familiar with both types of initiatives. Both of these initiatives should require native finance expertise in assessing the need and effectiveness of investments, tracking investments and understanding the timing and reasons of deviations from the original plan.
Digital talent hiring and retention is a real issue
How does Finance screen for FinOps candidates, given their lack of expertise? This seems like a huge uphill task.
According to a Gartner study, “CFOs say lack of expertise is one of the top barriers to developing an autonomous finance function in which new technologies and when finance leaders hire people with the experience, skills and competencies to build and operate a digital environment, these critical workers tend to feel alienated from accountants, risk managers and regulatory experts who may not share their background and values.”
According to the same study , It doesn’t help Finance teams knowing that almost 20% of digital finance employees are actively looking for new jobs, but losing digital finance talent is 69% more costly than losing core finance talent.
I’ve attended multiple events, meetings and conferences on this topic and it is obvious at this point that companies need to engage with an external partner early who has a <people, process and system> first approach.
