The FinOps Lifecycle – The Engine of Continuous Improvement
Inform, Optimise, Operate.
FinOps is a journey, not a destination. This post breaks down the FinOps lifecycle into three iterative phases—Inform, Optimise, and Operate. Learn how each phase builds on the last to create a feedback loop of visibility, efficiency, and governance. Whether you’re just starting or scaling up, this lifecycle is your roadmap to sustainable cloud cost management.
How FinOps Works: The FinOps Lifecycle
Inform
In this phase, you gain visibility and insight into cloud usage and spending. It involves collecting detailed cost data, breaking it down by teams or projects (for example, using tagging and account structure), and sharing reports and dashboards. The goal is to understand where every cloud dollar is going and to communicate that information. Inform also includes setting budgets and forecasts. Essentially, this is about creating transparency and accountability – making sure people know how much they’re spending and on what.
Optimize
Using the data from Inform, the next phase is to identify and execute cost optimizations. Teams look for opportunities to eliminate waste and get more value for the same spend. This could mean rightsizing over-provisioned instances, shutting down unused resources, buying reserved instances or savings plans for consistent workloads, or refactoring an application to use a more efficient service. The Optimize phase is about taking action on the insights – reducing cloud waste and improving cost efficiency, without compromising performance.
Operate
In this phase, you integrate FinOps practices into daily operations and workflows. It’s about establishing governance and automation so that cost optimization is continuous. For example, implementing policies like scheduled shutdowns for dev environments, setting up alerting for cost anomalies, holding regular cost review meetings, and ensuring new projects go through cost design reviews. Operate is where FinOps becomes “business as usual” – the org continuously monitors and adjusts, and cost awareness is embedded in everyone’s routine.
These three phases repeat in a cycle. After operating for a while, you gather new data (Inform again), find new optimizations, implement them, and refine operations further. Over time, this creates a virtuous cycle of cost control and improvement. It’s worth noting that different teams might be in different phases at any given moment – one product team may be focusing on optimizations while another is just ramping up visibility – but collectively, the organization keeps iterating through Inform → Optimize → Operate as it matures in FinOps.
Conclusion
A common mantra is that FinOps is a journey, not a destination. There isn’t a point where you declare “we’re done”. Instead, the focus is on incremental gains: maybe this quarter you got 5% savings via rightsizing, next quarter you might tackle storage costs, and so on. Cloud usage and prices evolve rapidly, so FinOps is about continuously adapting and learning. The Inform-Optimize-Operate loop provides a structured approach to do that.
Next, we’ll look at how to kickstart this FinOps journey in your own organization, breaking it down into practical steps.
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