This week, on February 5th, the FinOps Foundation announced important changes to the Cloud FinOps definition, adjusting the concept to meet the FinOps processes maturity according to the vote by the Technical Advisory Council (TAC) on December 12, 2023.
Here is the new definition:
“FinOps is an operational framework and cultural practice which maximizes the business value of cloud, enables timely data-driven decision making, and creates financial accountability through collaboration between engineering, finance, and business teams.”
The changes may seem subtle and unperceivable for those unfamiliar with the previous definition. However, they were driven by six key reasons:
- Change from “Discipline” to “Operational Framework”. It reflects the increasing maturity of many companies that were in the early stages of adopting practices and now have successfully integrated FinOps processes into their operations.
- Removal of the term “Cloud Financial Management” (CFM), as the use of FinOps has surpassed it.
- The addition of “maximizes business value” shifts the focus from cost to value. The goal is to amplify the understanding of cloud investments based on proven business results obtained.
- Expansion to encompass Cloud adoption more broadly. The focus of the last definition established in 2019 was on public clouds. Nowadays, however, on-premises PaaS solutions and hybrid infrastructure architectures are prevalent.
- Evolution of costs-related decision-making to a data-driven approach, reflecting the increasing volume of data available for companies, which fosters faster and more strategic decisions.
- The inclusion of “collaboration among engineering, finance, and business teams” reflects the first principle of FinOps, which states that teams need to collaborate.
As mentioned at the beginning of the article, these changes have a very specific and particular nature, aiming to keep up with the constantly evolving FinOps practice maturity. If we look back at the previous definition, established in 2019, we do notice these changes are aligned with how the state of the framework has changed in the last 5 years.
Here is the previous definition:
“FinOps is an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance, technology and business teams to collaborate on data-driven spending decisions.”
For those interested in more information, here’s the full announcement with further details at the FinOps Foundation website. Plus, you can actively participate in the FinOps community, as we always encourage our clients to do so.
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