Fundamentals of cloud financial governance
1. Fundamentals of cloud financial governance
Easy access to cloud resources presents a need for precise, real-time control of what’s being consumed. Having cloud financial governance, which is in part a set of processes and controls that organizations use to manage cloud spend, can mean the difference between peace of mind and spiraling costs that lead to budget overruns. As an organization adapts, it'll need a core team across technology, finance, and business functions to work together to stay on top of cloud costs and make decisions in real time. The variable nature of cloud costs impacts people, process, and technology. Let’s explore these three areas, starting with people. People refers to the different roles involved in managing cloud costs. For small organizations, one person might fulfill multiple roles and be responsible for managing all aspects of a cloud infrastructure and associated finance. From budgeting to procurement, tracking optimization, and more. Large organizations, however, will likely look to a finance team to take on a financial planning and advisory role. Using business priorities, a finance team is expected to make data-driven decisions on cloud spending, but they might struggle to understand or monitor cloud spend on a daily, weekly, or monthly basis. Then there are members of technology and line of business teams. They can advise on how cloud resources are being used to meet the organization's overall business strategy and what additional resources might be needed throughout the upcoming year. However, they don’t necessarily factor costs into their decision making. To manage cloud costs effectively, a partnership across finance, technology, and business functions is required. This partnership might already exist, or it may take the form of a centralized hub, such as a cloud center of excellence. The central team would consist of several experts who ensure that best practices are in place across the organization and that there's visibility into the ongoing cloud spend. The centralized group would also be able to make real-time decisions and discuss trade-offs when spending is higher than planned. Now let’s transition from people to process. On a daily or weekly basis, organizations should monitor and analyze their cloud usage and costs. Then, on a weekly or monthly basis, the finance team should analyze the results, charge back the costs through the appropriate teams, and determine whether any changes are needed to ensure that the organization's cloud spend is optimized. Having a culture of accountability in place across teams helps organizations recognize waste, quickly act to eliminate it, and ensure they're maximizing their cloud investment. It will also help drive cross-group collaboration across technology, finance, and business teams to ensure that their cloud spend aligns with broader business objectives. And finally, there’s technology. Google Cloud provides built-in tools to help organizations monitor and manage costs. These tools help organizations gain greater visibility, drive a culture of accountability for cloud spending across the organization, control costs to reduce risks of overspending, and provide intelligent recommendations to optimize cost and usage. You’ll explore some of these tools later in this section.2. Let's practice!
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