Businesses are constantly looking for ways to do more with less. AI has been a game-changer, transforming the way we operate by upending the execution paradigm. What was previously hours of toil is solved in a single prompt; where our skill set and creativity dead-ends, gen AI finds a way to break through. 

When it comes to cloud investments, tech leaders are keen to eliminate cloud waste while maximizing cloud value. The practice of FinOps was established to aid cloud cost management and optimization issues. However, while episodic cloud saving efforts have had modest success, demonstrating true ROI of cloud investments using existing FinOps tools and methodologies has proven elusive.

Thankfully, AI is now beginning to augment how cloud costs and efficiencies are managed. By properly harnessing AI-driven capabilities, businesses can seamlessly integrate and advance FinOps methodologies, gaining real-time insights into their architecture and unlocking the full potential of their cloud investments.

Traditional vs. Augmented FinOps: AI’s Transformative Role

The latest research shows that while 82% of companies now have formal FinOps practices in place, only 24% expect to see any real impact from it within the first 12 months. Why? Traditional FinOps offers a retrospective (historic) snapshot of a company’s cloud spend to date but lacks proactive capabilities to optimize that spend, efficiently utilize cloud resources before an issue occurs, and improve overall ROI. Getting these types of insights is difficult and involves running time-consuming, comprehensive reports that must often be manually evaluated and dissected.

Augmented FinOps, on the other hand, fuses AI and machine learning with intelligent orchestration to automate and optimize the complete cloud lifecycle, from provisioning and optimization to migration and deallocation. AI’s prowess lies in the rapid analysis of vast data sets, thereby democratizing predictive analytics, real-time insights, and continuous infrastructure optimization. Tech leaders can swiftly glean precise insights, detect anomalies, and streamline forecasting and modeling with a simple prompt. Natural Language “chatbots” enable stakeholders to interface with the data to easily analyze costs, receive alerts, run cost simulations, and initiate new workflows—in a fraction of the time it would take to do manually. For these reasons, it is rapidly becoming clear that the future of FinOps is Augmented.

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The Fusion of AI & FinOps: Four Key Benefits 

Augmented FinOps empowers organizations with data-driven insights, automation, and financial discipline to gain better control over cloud consumption, optimize costs, improve decision-making, and drive greater efficiency and agility in cloud financial operations. 

Let’s dive deeper into how AI enhances FinOps efficiency and transforms cloud spending so companies can boost their cloud ROI:

• Reduces Waste & Enables Full Allocation of Cloud Spend: AI empowers FinOps practitioners to pinpoint and eliminate waste in cloud spending—a top priority according to the FinOps Foundation State of FinOps 2024 report—by providing precise insights into resource utilization. Through AI-driven analytics, organizations ensure full allocation of cloud spend, optimizing usage efficiency and maximizing investment value. 
• Improves Forecasting Accuracy: Accurate and adaptable forecasting is crucial for effective cloud cost management. AI empowers organizations to predict their future cloud spending more accurately, enabling better resource allocation and informed decision-making. By leveraging key performance indicators (KPIs) and making automatic adjustments based on behavioral changes, AI enhances the predictability of cloud spending, instilling confidence to foster engineering innovation.
• Enables Intelligent Automation: Automation plays a vital role in effectively scaling FinOps. AI-informed automation tools streamline workflows, detect anomalies, bubble up insights, and take proactive actions to optimize cloud spending, easing the FinOps management burden.
• Streamlines Holistic Cost Reporting: To manage the total cost of ownership, cost reporting has expanded from just cloud cost to now include SaaS, private cloud (CapEx), and custom business cost data. AI-driven cost reporting tools provide organizations with elevated insights into this multidimensional spend by aggregating these disparate data sources into a common data platform that enables data analysis to see correlations that were previously undiscovered. 

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Warning: Beware The Shiny AI Object

AI alone does not make Augmented FinOps successful. Many vendors are trying to cash in on the AI gold rush. But, if they are not doing so in a thoughtful manner that helps deliver on the promise of what full lifecycle Augmented FinOps can achieve, you may be buying AI for AI’s sake and could actually end up farther behind as a result. Make sure a vendor can explain, show, and prove how their approach to AI advances putting ROI at the center of every cloud decision. If they can’t?

Run away. Fast.

The Future is Value-Based

As enterprises continue to invest in cloud technologies, AI-informed Augmented FinOps will be essential for proving value and maximizing ROI. 

Augmented FinOps aligns cloud spending with business goals, provides granular insights into cost drivers, enables data-driven decisions on resource allocation, prioritizes investments, and optimizes spending to support strategic initiatives. Armed with Augmented FinOps, tech leaders can confidently navigate the complexities of cloud cost optimization and unlock the full potential of their cloud investments in ways never before possible. 

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