COST01-BP02: Establish a partnership between finance and technology
Involve finance and technology teams when discussing costs and developing budgets. Finance teams provide business context and requirements, while technology teams provide context on architecture and technical constraints. Regular meetings between these teams help ensure that cost optimization efforts align with business objectives and technical realities.
Implementation guidance
Creating an effective partnership between finance and technology teams is essential for successful cloud financial management. This collaboration ensures that cost optimization decisions are made with full understanding of both business requirements and technical constraints, leading to more effective and sustainable cost management strategies.
Key steps for implementing this best practice:
- Establish regular collaboration touchpoints:
- Schedule recurring meetings between finance and technology teams
- Create shared communication channels and collaboration tools
- Establish joint planning sessions for budgeting and forecasting
- Implement cross-functional project teams for major initiatives
- Define shared responsibilities and accountability:
- Create clear roles and responsibilities for cost-related decisions
- Establish joint ownership of cost optimization outcomes
- Implement shared metrics and KPIs that both teams contribute to
- Define escalation paths for cost-related issues and conflicts
- Develop shared understanding and language:
- Provide cross-training on cloud economics and technical concepts
- Create shared glossaries and documentation
- Establish common frameworks for evaluating cost optimization opportunities
- Implement regular knowledge sharing sessions
- Implement collaborative planning processes:
- Include both teams in budget planning and forecasting activities
- Conduct joint architecture reviews with cost considerations
- Collaborate on capacity planning and resource allocation decisions
- Establish shared approval processes for significant cost decisions
- Create shared tools and visibility:
- Implement shared dashboards and reporting tools
- Provide both teams access to cost and usage data
- Create collaborative analysis and planning tools
- Establish shared documentation and knowledge repositories
- Foster cultural alignment:
- Promote shared understanding of business objectives
- Encourage mutual respect and appreciation for different perspectives
- Celebrate joint successes and learn from challenges together
- Establish shared incentives and recognition programs
Collaboration models and structures
Joint FinOps Team
Create a unified team with members from both finance and technology:
- Finance Representatives: Financial analysts, budget managers, procurement specialists
- Technology Representatives: Cloud architects, engineers, operations staff
- Shared Leadership: Co-leads from both finance and technology organizations
- Regular Cadence: Weekly team meetings, monthly stakeholder reviews
Benefits: Deep integration, shared accountability, consistent communication Challenges: Requires organizational commitment, potential for conflicting priorities
Cross-functional Working Groups
Establish temporary or permanent working groups for specific initiatives:
- Cost Optimization Projects: Joint teams for major optimization initiatives
- Budget Planning: Collaborative groups for annual and quarterly planning
- Architecture Reviews: Joint reviews of new projects and changes
- Vendor Management: Shared responsibility for cloud provider relationships
Benefits: Flexible structure, focused expertise, project-specific alignment Challenges: Coordination overhead, potential for inconsistent approaches
Liaison Model
Designate specific individuals to serve as bridges between teams:
- Finance Liaison: Finance team member embedded with technology teams
- Technology Liaison: Technical expert working closely with finance teams
- Regular Communication: Structured communication and reporting processes
- Escalation Support: Clear paths for resolving conflicts and issues
Benefits: Maintains team autonomy, focused communication, scalable approach Challenges: Dependency on key individuals, potential for communication gaps
Communication and collaboration best practices
Regular Meeting Structures
Weekly Operational Reviews:
- Current cost performance against budgets
- Recent cost anomalies or unexpected changes
- Immediate optimization opportunities
- Operational issues and escalations
Monthly Strategic Reviews:
- Cost trend analysis and forecasting
- Progress on optimization initiatives
- Budget variance analysis and explanations
- Planning for upcoming projects and changes
Quarterly Business Reviews:
- Overall cost optimization performance
- Strategic planning and roadmap updates
- Business case development for major initiatives
- Stakeholder communication and reporting
Annual Planning Sessions:
- Budget development and approval
- Strategic cost optimization planning
- Resource allocation and capacity planning
- Goal setting and metric definition
Shared Documentation and Processes
Cost Optimization Playbooks:
- Joint procedures for common optimization scenarios
- Decision frameworks for evaluating trade-offs
- Escalation procedures for complex decisions
- Best practices and lessons learned
Shared Metrics and Dashboards:
- Real-time cost and usage visibility
- Budget performance tracking
- Optimization opportunity identification
- Business value measurement
Communication Templates:
- Standardized reporting formats
- Executive summary templates
- Stakeholder communication guidelines
- Issue escalation procedures
Implementation examples
Example 1: Monthly finance-technology collaboration meeting agenda
Example 2: Shared cost optimization decision framework
Example 3: Cross-functional cost optimization project structure
AWS services to consider
Benefits of finance-technology partnership
- Holistic Decision Making: Combines business context with technical expertise for better decisions
- Improved Cost Accuracy: Better understanding of technical constraints leads to more accurate cost modeling
- Faster Implementation: Reduced friction and faster approval processes for optimization initiatives
- Better Business Alignment: Ensures cost optimization efforts support business objectives
- Enhanced Innovation: Collaborative approach can identify creative solutions that neither team would find alone
- Reduced Risk: Joint evaluation reduces the risk of unintended consequences from cost optimization efforts
- Cultural Transformation: Builds shared understanding and breaks down organizational silos
Common challenges and solutions
Challenge: Different Priorities and Perspectives
Solution: Establish shared goals and metrics, create joint incentives, and implement regular alignment sessions to ensure both teams are working toward common objectives.
Challenge: Communication Barriers
Solution: Provide cross-training on technical and financial concepts, establish common terminology, and use visual tools and dashboards to facilitate understanding.
Challenge: Conflicting Timelines
Solution: Implement joint planning processes, establish shared project management approaches, and create clear escalation paths for resolving timeline conflicts.
Challenge: Resource Constraints
Solution: Prioritize high-impact collaborative activities, leverage existing meeting structures, and gradually build collaboration capabilities over time.
Challenge: Organizational Silos
Solution: Secure executive sponsorship for collaboration, create shared success metrics, and recognize and reward collaborative behaviors and outcomes.
Measuring collaboration effectiveness
Quantitative Metrics
- Joint Project Success Rate: Percentage of collaborative projects that meet objectives
- Decision Speed: Time from cost issue identification to resolution
- Cost Forecast Accuracy: Improvement in forecast accuracy through collaboration
- Optimization Implementation Rate: Percentage of identified optimizations successfully implemented
Qualitative Metrics
- Team Satisfaction Surveys: Regular assessment of collaboration effectiveness
- Communication Quality: Feedback on clarity and usefulness of cross-team communication
- Conflict Resolution: Effectiveness of resolving disagreements and conflicts
- Knowledge Sharing: Assessment of cross-functional learning and development
Business Impact Metrics
- Cost Optimization Savings: Total savings achieved through collaborative efforts
- Budget Variance Reduction: Improvement in budget accuracy and performance
- Time to Value: Faster realization of cost optimization benefits
- Innovation Index: Number of innovative cost optimization solutions developed