In our series on Implementing FinOps, we have been exploring the dynamics of CTO-CFO relationship. At its core, FinOps thrives on clear communication and teamwork.
The essence of FinOps is bridging the gap between Finance and the CTO’s office, a task that hinges on understanding and collaboration. Success relies on recognizing each other’s personas and motivations. This article focuses on the key aspects of these vital groups in large organizations and explores ways to enhance communication and cooperation for smoother implementation of FinOps. Read on!
Understanding Technology Personas
Generalizations are always full of risks, but it’s fair to say that technology practitioners and leaders are likely to have been drawn to their careers at least in part because they started out as technology enthusiasts. This interest often elevates the pride they take in their work, especially among those in creative roles such as code writers.
It’s also true that technical work requires more creativity than many other fields, allowing for the development and application of various approaches to problem-solving. In technology there are often several different but equally valid means of achieving any given outcome. This tends to make technical work quite personal to the practitioner, further amplifying the technical creatives’ tendency to take pride in what they do. These are helpful dynamics to understand when approaching technical personas, particularly when the context of the interaction has to do with cost containment strategies for cloud optimization.
Tips for Finance Professionals When Dealing with Technical Personas
Take A Collaborative Approach to Cost Reduction Discussions:
Instead of saying, “We’re spending too much on X and need to cut costs,” ask, “Do you think it would be possible to reduce our spend on service X this coming quarter?” The first approach presupposes that the technical teams have made missteps in their architecture that have resulted in over-provisioning or waste, a posture that is likely to result in defensiveness and resistance to change.
By contrast,, the latter approach invites a two-way discussion and has the positive side effect of seeking their counsel on how to make improvements in cost efficiency. Asking questions is more constructive and avoids blaming the tech team, while also demonstrating that the Finance team values their input on cloud cost optimization.
Understand the Importance of Risk-prevention:
It is helpful to remember that many technical leaders and practitioners are measured on the performance of their creations, particularly in the context of reliability and the avoidance of failures and downtime. This causes them to be risk averse, with a bias toward provisioning for maximum reliability.
Finance professionals can emphasize their understanding of and appreciation for the need to preserve reliability during conversations about cost containment, demonstrating their knowledge of the balance that must be struck between cost and reliability in workloads. Such demonstrations of empathy are often very well received by technical teams.
Understanding Finance Personas
“Bean counters!” How often have we heard this light-hearted jab directed at our colleagues in Finance and Accounting?
It’s certainly true that the Finance practitioner’s world is focused on measurement and prediction, but that in no way implies that their role lacks a need for creativity. The complexity and ingenuity demonstrated by a finance practitioner’s budget spreadsheet might surprise those not familiar with it, revealing an unexpected elegance in the formulas used.
However, the stereotype of finance professionals as strict followers of established formats and practices does have some basis. There is a very good reason for this, since standardization is a necessary component of many finance practices.
Insights for Technology Practitioners When Dealing with Financial Personas
Understand the Need for Standardization:
To understand finance practitioners, it’s helpful for technology professionals to see things from their perspective. Consider the start of a new month. Imagine the challenges associated with asking dozens of different teams within the organization for their financial results for the month-end closing, only to receive dozens of different replies in dozens of different formats. Responses can even include ambiguity over whether Department A’s figures overlap with Department B’s, or whether figures are provided on a cash or accrual basis.
The cause of finance practitioners’ rigidness and impatience about these reports becomes a lot more clear during this mental exercise! Finance roles require a degree of inflexibility. They must meet the demands of the larger organization, often under tight deadlines and intense pressures for factual accuracy. Clear and standardized formats are critical, to minimize the amount of time taken to “clean up” or reformat data before reports from different departments are merged.
Understanding the Pressures Imposed by Senior Management:
The consumers of the Finance team’s detailed reports and budgets are often senior leaders for whom these figures are the vital lens through which they see the business and make the most important strategic decisions. The stakes are high.
Is the firm charging too little for Product “X”? Are they overinvesting in geographical region “Y”? Based on the cash burn rate, how long before the business needs another round of investment or an expanded credit line? How should the business’ future prospects be promoted to investors? Each report provided by every team in the organization forms one piece of the larger puzzle, and the finance practitioner must get all of the pieces to fit neatly, quickly, and without gaps or overlaps. Thus, understanding the broader perspective helps technology leaders grasp the real needs and urgency behind finance practitioners’ requirements.
The Value of Cooperation:
Empathizing with these dynamics can help technology leaders better understand the pressures facing finance practitioners and logic behind their behaviors. Earning their gratitude can be as simple as providing your financial data in the precise format they need, on time for each month-end and budget revision. Strengthening the bond with Finance practitioners can come in handy when the office of the CTO needs to enlist Finance’s help in advocating for the funding of a new project or the allocation of more budget for current operations.
Final Thoughts
Implementing FinOps is more than just aligning technology and finance; it’s about fostering a culture of collaboration and understanding. Clear communication and recognition of the unique contributions of each team are crucial for success. As we wrap up this discussion, remember that the journey to effective FinOps is ongoing and always evolving.
For a deeper dive into the CTO-CFO dynamic and practical FinOps strategies, check out our recent podcast on CTO-CFO collaboration: #FinOps with Rich Hoyer at FinOptik
For more insights into FinOps and how to enhance your cloud cost management, visit our blog at ProsperOps or book a demo to understand how our FinOps experts can help you save more on the cloud.
About the writer: Rich Hoyer is a FinOps thought leader with over 27 years of experience in IT and Finance, and he is the CEO and co-founder of FinOptik, a niche cloud financial management agency.
