There is a very crucial difference between cloud cost management and Finance Operations. There might not be any significant differences in their responsibilities, but how they approach their jobs explicitly separates them. Cloud cost management deals with managing cloud cost, whereas FinOps takes care of running the company’s day-to-day financial operations. Even though these two functions have different names and responsibilities, they work together to give the company smooth day-to-day operations.
What is cloud cost management?
Cloud cost management deals with the whole process of forecasting and monitoring costs. Cloud cost management plays a vital role by keeping track of the financial expenditures incurred on cloud hosting services and providing budget information to the manager.
What is FinOps?
FinOps is a set of functional processes that contain all the ongoing financial transactions of a business. It is an extension of the company’s accounting department, and it helps keep track of financial transactions.
10 Difference Between Cloud Cost Management and FinOps
1. Financial Orientation
Cloud cost management is focused on making sure the company’s budget is controlled to reduce financial overhead as much as possible. At the same time, FinOps is more focused on keeping track of the company’s finances.
2. Operations Focus
FinOps acts like a support department that helps finance and accounting run smoothly with day-to-day operations and record-keeping. At the same time, cloud cost management focuses on reducing cloud hosting costs. This is very efficient for cloud storage for in-house legal data.
3. Manage Costs in Advance
Cloud cost management is more likely to offer forecasting software that allows the company to know how much it will cost before the actual cloud hosting is launched. This enables the company to make better decisions about its budget and helps it manage its finances in advance.
4. Better Organization Skills
The financial organization of cloud cost management is more organized than FinOps, as FinOps deals with many different transactions every day of running the operations of a business.
5. Controlling and Monitoring Costs
As mentioned before, cloud cost management is focused on controlling costs as much as possible, while FinOps’ primary focus is to keep track of a company’s financial operations.
6. Financial Engineering
FinOps requires in-depth knowledge or financial engineering, whereas cloud cost management does not require any financial engineering knowledge to do its job in reducing the costs of hosting the company’s website on cloud servers.
7. Platform Focus
FinOps deals with the platforms set up to manage the finances of a company, while cloud cost management focuses its efforts more on managing the costs of hosting the company’s website.
8. People Focus
Cloud cost management and FinOps deal with people, but cloud cost management works better to control costs than FinOps does, focusing on day-to-day operations.
9. Audit and Review Services
Cloud cost management deals with auditing and reviewing the company’s financial data to ensure that the data is correct. At the same time, FinOps works closely with financial analysts to ensure that the day-to-day financial operations are running smoothly.
10. Future Outlook
FinOps is more likely to focus on keeping track of everyday finances. In contrast, cloud cost management has a significant focus on forecasting costs for a company’s website hosted on cloud servers. This helps control costs as it gives the company an idea of how much it will cost them before launching their website on cloud servers.
Cloud Cost Management and FinOps. Which one?
As stated before, both cloud cost management and FinOps have very different responsibilities from each other. It is not about which is better than the other; it’s about its requirements. For example, if the company wants to reduce its financial overhead as much as possible, cloud cost management would be a good choice. If the company needs more support in handling its day-to-day operations with its finances, FinOps would be a good fit.
It is not always possible to manage all the financial and operational costs of a company by cloud cost management or FinOps alone. It is up to the company’s leadership to decide which function would be beneficial for their day-to-day operations and reduce their financial costs as much as possible while ensuring smooth operations of the business.