As cloud spending continues to rise, FinOps (financial operations) has emerged as a critical strategy for managing and optimizing cloud investments. However, many organizations struggle to realize the full potential of FinOps, with some initiatives delivering a mere 30 cents in actual savings for every dollar invested. This begs the question: what's going wrong?

The core promise of FinOps is undeniably appealing: achieve radical cost optimization, enhance operational efficiency, and drive measurable business value. According to a recent Deloitte report, companies that implement FinOps tools and practices could collectively save an impressive $21 billion by 2025. McKinsey estimates that the potential value realized from embedding FinOps as code (FaC) could reach approximately $120 billion based on projected global cloud spending.

Some organizations have reported significant savings, with strategic FinOps implementations cutting overall cloud costs by as much as 40%. Leading companies such as Airbnb, Sky Group, The Home Depot, Lyft, and WPP are already enjoying tangible benefits from a well-crafted FinOps strategy. However, achieving these substantial savings and a meaningful ROI demands more than just investing in tools or hiring a dedicated team. It requires a significant shift in organizational culture to re-engineer existing processes and assign clear accountability across all teams involved.

One of the most significant challenges is the lack of integration between the FinOps and engineering teams responsible for building and deploying cloud applications. Many organizations struggle to capture savings beyond the immediate FinOps team's mandate because these teams often lack the incentives or access to cloud cost data. Consequently, many well-meaning optimization efforts fall by the wayside as engineers juggle multiple priorities or lack the resources to focus on cost-related improvements.

Another issue is the lack of systematic implementation of FinOps best practices. This is where FaC becomes essential by incorporating FinOps processes directly into application configurations to make them foolproof. FaC can dramatically reduce costs by integrating financial management principles directly into the infrastructure management life cycle. Organizations can enforce budget constraints by automatically identifying opportunities for cost reduction, supporting more efficient resource scheduling, and employing cloud-native services to decrease operational cloud resource expenses.

Many organizations also struggle with basic cloud hygiene practices, failing to effectively identify and eliminate obvious sources of waste, such as underutilized resources, oversized virtual machines, and redundant storage volumes. A tagging strategy should be implemented to assign resource costs to specific teams or projects to foster accountability.

To significantly improve FinOps ROI and transform it from a cost center into a genuine value driver, enterprises can take several key steps. These include breaking down the silos between FinOps and engineering, embracing FaC to move beyond reactive cost management, creating and consistently enforcing a robust tagging strategy, regularly identifying and eliminating underutilized resources, and carefully selecting FinOps tools that provide granular visibility.

Ultimately, a successful FinOps program requires comprehensive integration and a genuine commitment to cultural change. Rather than tossing tools and money at the problem, enterprises must start by applying some common-sense solutions to their human and cultural problems. By improving communications between teams, creating and enforcing policies and accountability, and encouraging good stewardship, organizations can unlock the full potential of FinOps and drive meaningful business value.