Time to read: 8 min 02 seconds | Updated: October 27, 2025
FinOps (Financial Operations) What is FinOps?
FinOps (Financial Operations), a cultural practice and operational framework, helps organizations maximize the value of cloud and technology investments. It combines technical, financial, and business teams to create faster, smarter cloud usage and budget decisions. It encourages organizations to be accountable for their cloud costs, understand their decisions, and collaborate to improve efficiency without sacrificing speed or creativity. FinOps simplifies cost control, waste reduction, and technology spend alignment by integrating real-time data and established objectives.
- Why is FinOps important?
- What are the key principles of FinOps?
- How is FinOps expanding beyond the public cloud, and what strategies can organizations use to unify technology spend optimization?
- What key capabilities make FinOps successful in cloud and hybrid IT?
- How can HPE help you with FinOps?
Why are FinOps important?
- Cost management and financial accountability: FinOps controls cloud expenditure, prevents budget overruns, and promotes team accountability for cloud usage and expenses.
- Optimization of cloud resources: FinOps helps firms reduce waste, improve resource allocation, and make cost-effective cloud efficiency decisions.
- Facilitated collaboration: FinOps fosters finance, operations, and engineering collaboration for better cloud management and decision-making.
- Real-time visibility and agility: With real-time insights into cloud consumption, FinOps enables enterprises to react rapidly, align spending with business objectives, and respond to market developments.
- Strategic planning and forecasting: FinOps helps firms’ budget and plan for future cloud investments, improving forecasting and cost management.
- Compliance and governance: FinOps reduces compliance risks and maintains cloud expenditure governance by following policies and regulations.
What are the key principles of FinOps?
The key principles of FinOps are essential for managing and optimizing cloud spending and promoting team collaboration. They oversee data-driven, accountable cloud investments that support corporate goals.
- Team collaboration: Helps engineering, finance, and business teams to make informed cloud usage and cost decisions.
- User and cost ownership: Assigns responsibility for cloud spend to the teams consuming resources, encouraging cost-conscious operations.
- Financial accountability: Connects cloud expenses to business results for transparency and disciplined expenditure.
- Real-time decision making: Follows live data and insights to optimize cloud performance and cost.
- Accessible, actionable data: Gives stakeholders clear, precise, and real-time cost data for decision-making.
- Continuous improvement: Promotes cloud cost management monitoring, analysis, and optimization.
- Alignment with business goals: Every cloud investment should support strategic goals, including faster delivery, innovation, and customer experience.
- Leveraging cloud flexibility: Makes the most of the cloud's elastic nature by only paying for the resources consumed.
How is FinOps expanding beyond the public cloud, and what strategies can organizations use to unify technology spend optimization?
FinOps scopes for a broader horizon
FinOps was initially created to manage public cloud infrastructure expenses, but its principles now encompass a broader range of technology spending. The FinOps Foundation has added "Cloud+" scopes to its framework to reflect its relevance wherever technology spend occurs. The FinOps Framework's principles of openness, accountability, and optimization can be applied to environments beyond public cloud providers with this expansion.
FinOps for SaaS
FinOps concepts are crucial in SaaS. As documented by the FinOps Foundation, the challenges of managing public cloud spending are often mirrored in how SaaS resources are acquired frequently through decentralized, individual-level procurement using corporate credit cards. This usually results in limited organizational visibility into costs and usage. The FinOps approach for SaaS addresses these challenges by bringing financial transparency and accountability to software spending. It involves analyzing varied pricing models such as license-based, per user, or consumption-based to ensure that organizations are paying only for the services they truly utilize. Companies can track SaaS prices, monitor consumption, and cut costs with the iterative FinOps Framework Capabilities.
FinOps for the data center
The data center scope represents a vital and growing area for the FinOps discipline. Data centers have traditionally used an upfront purchase model, but now options are available to shift to a consumption-based usage and cost model. This allows FinOps Practitioners to work with others to evolve their organization to more collaborative spending habits. Applying FinOps to the data center means bringing the same discipline of cost transparency and accountability to on-premises and hybrid environments. This includes optimizing server utilization, managing virtualization costs, and planning for hardware refresh cycles.
For companies with a robust data center presence, such as those that partner with HPE, this scope is essential. It allows them to apply cloud-like financial discipline to their entire estate, ensuring they can make informed decisions about their technology investments, both in the cloud and in their own data center. HPE GreenLake Flex Solutions and other as-a-service solutions can help an organization establish a FinOps practice for their data center.
FinOps for the hybrid world: unifying your strategy
Beyond managing individual scopes like public cloud, SaaS, and data centers, the most forward-thinking organizations are adopting a holistic, hybrid FinOps approach. This is where the true power of the discipline lies. In a world where IT environments are a complex mix of on-premises infrastructure and multiple public cloud providers, FinOps serves as the unifying layer. A key challenge is gaining "single-pane-of-glass" visibility across all these disparate environments. By implementing a consistent FinOps strategy, including standardized tagging and cost allocation models, teams can make objective, data-driven decisions on where to place workloads for optimal cost and performance.
This unified approach not only helps manage the complexity of hybrid IT but also enables organizations to strategically leverage HPE's on-premises and private cloud solutions, ensuring that every dollar spent on technology is driving maximum business value.
What key capabilities make FinOps successful in cloud and hybrid IT?
FinOps capabilities: The building blocks of a FinOps practice
To manage a successful FinOps practice, a business must create fundamental competencies. More than people and processes, FinOps platforms use automation and analytics. The FinOps Framework establishes these domains and capabilities that enable mature, data-driven financial operations across cloud and hybrid IT.
1. Understand usage & cost
This domain is about visibility—knowing what you spend and why. All other FinOps actions depend on it.
- Allocation: Assigning technology costs accurately to teams, applications, or business units.
- Anomaly management: Identifying and responding to unusual anomalies before they become budget overruns.
- Data ingestion: Unifying cloud, SaaS, and on-premises pricing and use data.
- Reporting & analytics: Tracking usage and spending patterns with reporting and other data visualizations to inform cost optimization.
2. Optimize usage & cost
Once visibility is in place, the focus shifts to efficiency—using resources smarter without compromising business performance.
- Workload optimization: Matching resources to demand. HPE's FinOps solutions recommend VM sizes and settings to avoid over- or under-provisioning.
- Rate optimization: Reducing unit costs via reserved instances or savings schemes.
- Architecting for cloud: Embedding FinOps ideas into technical architectures from the start to reduce costs.
- Cloud sustainability
- Licensing & SaaS
3. Quantify business value
This domain connects technology consumption to business outcomes, enabling firms to prioritize investment based on value.
- Budgeting: Setting and tracking team, application, and project spending.
- Forecasting: Utilizing historical data and usage trends to plan financial futures.
- Unit economics: Relating expenses to business factors like transaction and customer costs to show how technology spending supports business goals.
- Benchmarking
- Planning & Estimating
4. Manage the FinOps Practice
These are the organizational levers that sustain and scale FinOps as a cross-functional discipline.
- FinOps education & enablement: Equipping finance, engineering, and business teams to participate in a culture of responsibility.
- Invoicing and chargeback: Internal billing to assign consumption to teams. Automated chargeback and invoicing in hybrid environments promote accountability with HPE Morpheus.
- Policy & governance: Setting rules, guardrails, and compliance mechanisms to match technology use with financial and business goals.
- FinOps assessment
- FinOps practice operations
- Intersecting disciplines
- Onboarding workloads
How can HPE help you with FinOps?
In the following ways HPE Supports FinOps:
1. FinOps tools
- Unified hybrid cloud view and insights: the consumption analytics capability of HPE GreenLake delivers a single view for normalized usage and cost data across HPE GreenLake as-a-service offerings, AWS, Azure, and Google Cloud. It offers customizable dashboards, robust showback capabilities, proactive cost optimization recommendations and anomaly detection, cost forecasting, and FOCUS exports to support chargeback mechanisms.
- Workload-focused reporting and governance: HPE Morpheus Enterprise Software provides cost reporting with tagging that also extends into its control plane to help you implement rightsizing and enforce governance over the resources that HPE Morpheus Enterprise orchestrates.
2. Cultural & process transformation
- Advisory & professional services: HPE experts help embed financial responsibility into cloud operations, guide strategy, and build FinOps capabilities.
- People-process-technology alignment: Promotes collaboration between engineering, finance, and business teams for shared accountability.
- Accountability & efficiency: Links cost data to accounting and budgeting, enabling ongoing efficiency improvements.
3. Flexible consumption & financial services
- As-a-service infrastructure: Consumption-based pricing with HPE GreenLake Flex Solutions and other offerings aligns IT costs directly with business outcomes, improving predictability.
- IT asset lifecycle solutions: HPE Financial Services offers lifecycle management, capital release, and flexible financing to fund IT strategically while controlling costs.
How does FinOps differ from traditional IT financial management?
FinOps redefines financial management for the cloud era, filling in the gaps left by traditional IT finance management. Traditional methods work for static, on-premises infrastructure but not for dynamic, pay-as-you-go cloud computing. FinOps is designed for this environment, enabling cost optimization, cross-functional communication, cloud spending and business alignment.
| Aspect | Traditional IT Financial Management | FinOps |
|---|---|---|
| Cost Model | CapEx-focused, with upfront investments in hardware and data centers. | OpEx-focused, leveraging the cloud’s pay-as-you-go model with costs tied to usage. |
| Collaboration | Siloed ownership between finance, IT, and business teams. | Cross-functional collaboration with shared accountability for cloud spend. |
| Resource Model | Manages fixed assets with predictable costs. | Designed for elastic, scalable cloud resources with fluctuating costs. |
| Optimization | Periodic budget reviews (quarterly/annually). | Continuous monitoring and optimization. |
| Decision-Making | Static decisions made months in advance. | Data-driven, dynamic decisions for timely adjustments. |
| Agility | Slow procurement and budget change processes. | Rapid scaling of resources up or down as needed. |
| Metrics | Generic IT metrics (e.g., total IT spend, cost per user). | Cloud-specific metrics (e.g., cost per workload, utilization rates, RI coverage). |
| Business Alignment | IT treated as a cost center focused on containment. | Spending aligned to business goals, prioritizing ROI and value. |
| Tools | General finance tools lacking cloud cost granularity. | Cloud-native and third-party tools for detailed, real-time cost analysis. |
| Scalability | Limited, requires lead time to expand. | Instantly scalable based on demand. |
| Cultural Focus | Finance-driven control with minimal technical input. | Culture of shared financial accountability across teams. |