FinOps and SAP: Part 2. How to kick off a FinOps practice.

Now that we know what FinOps is and why SAP needs to be part of it, let’s try to think about how to initiate FinOps practice and make SAP a part of it.

Let me remind you that it’s really about people. If your FinOps practice is to be successful and effective, different personas need to be actively involved in it. And that involves SAP SMEs that design and maintain SAP systems. This is where some companies already start to struggle, since they may see some resistance 😉. Resistance to change… which is anticipated by many, but executed by few. Just like in life 😁…

And it’s perfectly natural that people are a bit hesitant to change. Especially if they come from an on-premises world and someone just disrupted their vision of physical and accessible data centers in exchange for cloud-based computing. And now, another person says that they should be aware of the costing perspective or that they are responsible for some part of it. I can already see the look 99% of SAP Basis Consultants would give me…

There will be challenges among SAP and other strictly technical departments and that’s absolutely normal. Dealing with those is more of a culture / mindset thing, requiring months (possibly: years…) of cloud evangelism and education, delivered through the FinOps team and reaching out to every employee who manages cloud-based IT systems. 

Ha! So we’d need a FinOps team first, right? That’s correct: usually, companies initiate a central, company-wide FinOps practice at some point, composed of people from different areas – both technical and finance-related. When is the right moment to do it? Well, it’s kind of similar like with personal finance: the sooner, the better (or: best timing was yesterday, the next one is today 😉). Best cost-optimization effects can be seen when a FinOps practice is established even before first workloads are deployed to the cloud. Unfortunately, companies usually start to think about FinOps when the equation “earnings > spending” stops working. Or when dust after the cloud migration settles and the initial invoices show it’s not only rainbows and butterflies (“Wasn’t public cloud meant to be cheaper?!?” kind of frustration). No matter where you are in your adoption of cloud though, the first step to implementing FinOps is the same: Start small, iterate through the lifecycle and continuously improve. 

Who should be part of it? The most effective FinOps teams are made of:

• Technically savvy specialists with knowledge of cloud-native approach.
• Finance specialists with eagerness to learn about cloud specifics.
• Undergrads / Fresh graduates / anyone who is interested in both finance and IT.
• Employees with high personal finance hygiene (FinOps is surprisingly similar to personal finance!).

At the end, implementing any cost optimisation is a joint effort of different stakeholders, each of whom needs to have an understanding of the process:

Once it’s formally there, one of the main FinOps goals should be a constant evangelisation within a company, with the goal of explaining the idea of what FinOps is about. Plus describing about what’s it’s NOT about (especially: it does NOT aim to be another road-blocker for efficient DevOps 😉). Because of this, key FinOps stakeholders should be story-tellers who are able to give examples of different challenges from IT&finance area and how they were resolved. After all, we all love to hear about other’s mistakes, don’t we? ;). To sum up, it should all start from initiating a FinOps practice and doing a bit of evangelism among different technical teams, including SAP one.

In most cases, SAP will be a part of company-wide FinOps practice, with two-three SAP SMEs who are able to understand and “talk” FinOps. The more mature your SAP practice is, the more difficult it is to find enthusiastic FinOps-ers, so you might just have to put a lot of effort into evangelisation efforts. It’s not a reason to give up; it’s more of an argument to be prepared and persistent, which should eventually pay off. From a more practical perspective: depending on the size of your company, you might start by designating ~20% of time for 2-3 SAP Basis specialists to learn and contribute to FinOps practice. Make sure they’re part of your regular FinOps meetings and their point of view is respected by others. That should help them feel comfortable in this cloud-native environment, and at the same time, they will develop core competencies and get a good understanding of FinOps “why” and “how”.

Those SAP SMEs should have insights into cloud spending for SAP workloads and should be encouraged to ask questions like “are the resources we currently use are distributed in the optimal way?”. Easier said than done… so how to encourage them in doing so? First of all, cost-related cloud trainings are essential! SAP SMEs need to be aware of the main cost drivers in the cloud, options to optimise them and the flexibility that can be used to grow SAP systems as needed (I’ll through all of these in the next articles). Any extra, leftover budget might be used as an incentive. On top of that, it does not hurt to take care about the details, such as FinOps T-shirts given to the whole FinOps team, or other swags that bind the team together. Also, regular team meetings in less formal places will be more than welcome, especially if there is a bit of a budget for those.

FinOps team needs to help everyone around understand that FinOps is an ongoing, iterative process, which does not end when the spending is brought to acceptable level. It continues throughout the life cycle of each and every system and even if SAP workloads will be less frequently FinOps-ed when compared with other, more cloud-native applications, it still makes a ton of sense to ensure SAP SMEs feel included in FinOps practice and stay current with company dynamics.

When setting up FinOps practice, careful balance needs to be worked out between flexibility of the cloud and financial control that you’d like to keep within your finance team. Too much flexibility will almost certainly cause wastage, but too much financial control can limit some benefits that the cloud is meant to provide! This is why – just with the DevOps approach, where Developers and Operators are no longer a totally different entity – with FinOps, both engineers and finance teams should work on dismantling (rather than building) walls between them. That’s only possible if they both have the same goal, which is maximising cloud investment (and not just “doing FinOps”, which is only a means to achieve that goal).

As with any practice, you’d need a set of value metrics that will guide you along the way. This blog post describes the most important ones, while this GCP FinOps guide will give you a ton of additional information as to how to effectively kick off and run FinOps practice in your organisation if you still haven’t done so.

By now, you should know where you are on the road to “perfect FinOps” (which is a Holy Grail which you should seek, but never really achieve). Regardless if you’ve just realised that FinOps is the missing piece of a puzzle, or you already have a functioning practice, hopefully you understand why and how to include SAP SMEs in your practice. In the next article, we switch gears and dive into FinOps for SAP from a technical perspective.