How to gain executive sponsorship to drive FinOps success

FinOps is an operational framework and evolving cultural practice that creates financial accountability through collaboration between engineering, finance, and business teams. Gaining executive sponsorship to drive FinOps success is a critical first step in building a culture of financial discipline. As industries and organizations across the world adopt cloud capabilities, increased attention has turned towards necessary collaboration across functions to make data-driven financial decisions.

We have seen customers, who do not have executive sponsorship hit a brick wall. Many ground-up approaches fail because they do not have the leadership engagement required to resolve downstream execution hurtles. Ultimately, strong executive sponsorship is required to influence the support, resource allocation, implementation, and sustainment of a FinOps practice.

In this blog, we will outline a framework for your organization to gain executive sponsorship using the following step-by-step guide:

1. Why you need a FinOps executive sponsor
2. How to select an effective executive sponsor for FinOps
3. How to gain support from an executive sponsor for FinOps
4. How can executive sponsor drive a successful FinOps practice

Why you need a FinOps executive sponsor

The executive sponsor is the bridge between Engineering/IT, Business, and Finance. This leader removes silos and promotes a culture of collaboration and accountability. Executive sponsors have the ability to redefine an organization’s strategic goals and advocate for cost visibility and budget controls.

An effective FinOps practice starts with strong executive sponsor who can lead and define change management initiatives, address resistance, and promote adoption. Without an executive sponsor specifying the business goals, there is often reluctance in executing on change management initiatives. Top-down sponsorship increases the alignment required to influence an organization’s strategic direction, budgetary support, reporting mechanisms, resource allocation, and technology investments.

How to select an effective executive sponsor for FinOps

The AWS Cloud Financial Management Framework breaks down into four pillars: (1) See: track and allocate, (2) Save: optimize and save, (3) Plan: plan & evaluate, and (4) Run: manage & control. One of the most important factors of the pillar RUN is to secure an executive sponsor. The first step of selecting an effective executive sponsor is to identify a leader who has a vested interest in FinOps. For example, a Cloud Director who owns and distributes department budgets. To select an effective executive sponsor, look for someone who can remove organizational barriers. The sponsors must lay the foundations of cost visibility and cost controls within an organization. The right executive sponsor creates balance between revenue generation and cost optimization. They do this by holding teams accountable for efficient execution of the organization’s roadmap: how to maximize your investment. Ultimately, your executive sponsor’s cost control governance must align with business strategy, budget, and protocols.

Organizations should select an executive sponsor who understands both the financial and technical implications involved with cloud financial management best practices. This individual has the influence and capacity to partner with stakeholders to create a cost-aware culture.  This ensures the team is committed to cloud cost optimization and governance that will bring the right people to engage, learn and execute on the objectives. An effective executive sponsor needs to ensure alignment between strategic goals and financial planning.

How to gain support from an executive sponsor for FinOps

Once you have selected the executive sponsor candidate, seek to understand what they care about. Look for alignment with their goals. Find out their communication styles and determine how you can collaborate and build trust with them. Make sure your proposal to engage aligns with their goals and tell a compelling story about why they should get involved. Demonstrate how your FinOps program can contribute to their success.

Build a personal and professional relationship with the executive sponsor. If you don’t know the executive sponsor, leverage your network to seek recommendations or introductions from your colleagues who have a relationship with the executive sponsor. Request a meeting with the executive sponsor to discuss your proposal. Be frugal with their time. When presenting your proposal, clearly articulate how the executive’s support will benefit them, the organization and the initiative. Be open to suggestions and feedback.

Clearly define the problem, provide data to support money being left on the table, and explain how the solution will benefit  your FinOps initiatives. Make sure to include timelines, success stories, and quantify the potential return on investment or savings that they can expect from the initiative. Clearly state what action(s) or help you need from the executive sponsor. Do not be afraid to address potential challenges.

After the meeting, maintain regular communication to keep the executive sponsor informed of progress. For example, start with a monthly cadence and adjust it as you go. Tailor your communication to the executive’s preferred style. Highlight achievements and address any challenges that you may need help from the executive sponsor.

How can executive sponsor drive a successful FinOps practice

Once you have gained executive sponsorship: how do you make sure they can drive a successful FinOps practice? Success must be measured over time to track improvements and identify existing gaps. Executive sponsors must advocate tactical implementation, establish KPIs, track success of the organization’s performance, and assure adherence. For example, executive sponsors can set up cadences for application owners to share their defined KPIs. Establishing KPIs centered on tracking cost savings opportunities allows for the evaluation of progress towards optimizing cloud spending over time.

The executive sponsor should empower teams to establish new responsibilities and expectations centered around cost awareness and optimization. Prioritizing training and education opportunities to build the knowledge base around best practices and transparency plays a critical role in developing necessary partnerships between Finance and Technology organizations.

As subject-matter experts grow their knowledge base and build governance, executive sponsor should facilitate creation of a platform for people to share knowledge and success stories. This will encourage collaboration and adoption. Celebrating milestones and key accomplishments can boost moral and reinforce the importance of CFM practice.

Conclusion

Executive sponsors play a pivotal role in ensuring the success and effectiveness of a FinOps practice. It starts with identifying an executive sponsor to build accountability and oversee goal execution, and continues through goal setting and incremental improvement. Executive sponsors’ leadership, support, and advocacy are instrumental in creating a cost-aware culture.  If your organization does not have a FinOps executive sponsor, now you are armed with the tools to select the right one. You can learn more about AWS FinOps best practices by visiting the Cloud Financial Management webpage. Starting your Cloud Financial Management journey is a 4-part blog series to aid you as your organization embarks on it’s FinOps journey. You can also read this blog to see how AWS customer build a cost-aware culture.