Bringing FinOps and GreenOps Together for Sustainability and Profitability
What’s new. Technology leaders are taking a new approach to solve the challenges of balancing planet & profit by combining FinOps and GreenOps.
Combining FinOps and GreenOps enables tech leaders to optimize costs and improve sustainability, balancing profit with environmental responsibility.
Why it matters. Modern technology portfolios are complex: legacy data centers, co-lo facilities, multiple public clouds, and many SaaS platforms. Managing and controlling the cost of these large, dynamically changing estates is tough for technology leaders. Not to mention, the new ESG reporting and sustainability goals have introduced a whole new set of challenges in addition to controlling costs.
Widespread cloud adoption has delivered huge benefits to enterprises through faster software development, rapid digital innovation, and AI-driven insights. The downside? Unexpectedly large cloud bills. To address this challenge, FinOps has emerged to help tech leaders manage cost efficiency and mitigate unoptimized spending in next-generation IT architectures.
The next board-level challenge for CIO’s and CTO’s is to integrate sustainability to support ESG reporting requirements such as the European Sustainability Reporting Standards (ESRS) and the US SEC Climate Disclosure Rule. CIO's are at the center of the escalating demands for quality ESG reporting, which has quickly grown into a full-time role in many organizations. This data is only useful if it can drive meaningful sustainability improvements.
To drive these improvements, the emerging discipline of GreenOps focuses on making IT operations more sustainable through energy efficiency, waste reduction, and lower carbon emissions. GreenOps works alongside FinOps to optimize efficiency.
New FinOps and GreenOps standards from the FinOps Foundation and SustainableIT.org are helping, but data collection is still very manual in many organizations.
The risk. Accurate, granular, regular, location-sensitive collection of metrics for both the cost and carbon footprints of digital assets is a significant challenge for technology organizations, even with the many FinOps and ESG tools on the market. Reporting from key partners and suppliers is limited, and often too high level to drive actionable optimization decisions. Moreover, rates of both underreporting and greenwashing by many service providers may lead to emissions that are much higher than previously reported.
Go deeper. Marrying cost and carbon metrics and allocating them to business units, products, and programs is necessary to drive an effective cost and sustainability improvement program. Knowing which parts of the organization and digital estate are driving costs and GHG Protocol Scope 1, 2, and 3 emissions is just the first step. Technology architects and operational staff must be trained on best practices in sustainable architecture and operational automation to drive cost-effective optimization decisions and implementations.
FinOps and GreenOps governance structures, standards, and processes address putting that knowledge to work to identify unneeded/underutilized resources, direct workloads to more sustainable regions and service providers, automate operations to maximize utilization and optimize technology architectures.
The takeaway. It’s time for tech leaders to start blending FinOps and GreenOps efforts to support cost optimization, ESG reporting, and sustainability goals. While the metrics for FinOps and GreenOps are different, aligning these reporting and optimization efforts can help organizations achieve both Sustainability and Profitability.
Here are some essential steps:
Begin by gathering and aligning your cost and Scope 1, 2, and 3 data across your IT estate
Dig deep to understand your own data and data from your suppliers and service providers
Identify just a few baseline metrics initially, you can expand later
Tie data to key workloads to understand their cost and carbon load
Define optimization patterns to address the most significant inefficiencies, implement and measure results. Rinse and repeat.
The bottom line. FinOps and GreenOps together will help CIO’s go beyond just cost and ESG reporting to support their organizational goals of increasing profitability through efficiency while accelerating sustainability.
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A FRESH APPROACH | Chiefly & Co.’s fractional experts accelerate sustainability & profitability for companies driven to do well while doing good. Learn more at chiefly-co.com
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