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Key Points:

• CFOs and financial managers can collaborate with IT and engineering teams to track spending, set budgets, and improve accountability, ensuring cloud costs align with business objectives.
• Actions such as terminating unused resources, right-sizing instances, and moving to reserved instances can result in significant savings.
• Internal efforts to optimize cloud costs can take 6-12 months and capture just 25% of potential savings, while working with FinOps experts like Virtasant provides better visibility and gets you up and running in just 4 weeks.

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Cloud cost optimization isn’t just an IT concern, it is a financial priority. Finance leaders, including CFOs, financial analysts, and IT finance managers, are now expected to forecast, budget, and report on cloud spend with greater accuracy, even as complexity increases and visibility remains limited.

In particular, the shift from fixed capital expenses to variable cloud pricing makes planning more difficult. Finance teams are under increasing pressure to explain costs, reduce waste, and support informed decision-making throughout the organization.

Recognizing these challenges, Virtasant brought together finance and FinOps leaders to share proven strategies for reducing cloud spend. The session featured Mike Boudreau, Head of FinOps Delivery at Virtasant; Steven Mitchell, CFO of Redgate Software; Mike Rosenberg, FinOps Leader at Nubank and FinOps Foundation Ambassador; and Daniel Fearnley, Director of Sales and Marketing at Virtasant, who hosted the discussion.

You can watch the full webinar, “The Finance Executive’s Roadmap to Cloud Cost Reduction,” below to hear their firsthand insights on what’s working and how to get started.

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They explored how finance executives can take a strategic role in cloud cost management by improving visibility, driving accountability, and aligning investments with business value. Before we recap the webinar in detail and highlight the key takeaways, let’s start with the basics: What is cloud cost optimization?

Cloud cost optimization is the process of managing cloud resources so that spending aligns with business goals. For finance leaders, it offers better visibility and transforms cloud spend into a strategic advantage.

In this recap, we’ll highlight key insights, share practical examples, and demonstrate how finance-led FinOps can optimize cloud investments by applying the best FinOps principles.

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Managing Cloud Spend Through FinOps for Finance Leaders

Without a reliable cloud cost management strategy, controlling cloud expenses can quickly become complex for financial leaders, especially as cloud adoption continues to grow. In fact, by 2029, over 50% of organizations are expected to use cloud platforms to drive business initiatives, increasing the need for finance leaders to manage costs effectively.

While the cloud offers scalability and agility, the shift from fixed capital expenditures to variable operational costs creates new financial hurdles. Finance teams now face unpredictable cloud spend, distributed accountability, and outdated legacy finance models designed for capital expenditures, not the operational cost structure of the cloud.

Unpredictable cloud costs can spiral out of control without proper oversight, making it difficult for finance teams to track and manage spending. Virtasant’s recent survey with the CFO Leadership Council found that rising costs and lack of visibility into cloud spend are top concerns for finance leaders. As accountability for cloud costs becomes fragmented across departments, visibility diminishes, further complicating forecasting and budgeting.

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To manage cloud expenses more effectively, businesses require clear visibility, informed planning, and a shared sense of responsibility among both technical and financial teams.

“While the technical aspects and some of the benefits around the investment that cloud providers are offering are great for the growth of our business. From a finance perspective, there are issues around variability, lack of visibility, lack of control, etc.” - Steven Mitchell, CFO of Redgate Software

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CFO’s Guide to FinOps: A Smarter Approach to Cloud Cost Optimization

Typically, the objective of reducing cloud costs is clear, but determining where to start can be confusing. Having a clear framework to guide this process makes all the difference, and the FinOps framework provides precisely that. Finance-led FinOps enables finance, engineering, and IT teams to collaborate and align financial objectives with technical decisions, fostering a unified approach to resource allocation.

The FinOps Foundation helps organizations implement these practices, ensuring that cloud costs are managed strategically across all departments. By creating a shared sense of accountability, FinOps enhances visibility into cloud spending, making it easier to allocate costs and make decisions that are both cost-efficient and aligned with the broader business goals.

When discussing accountability, Steven Mitchell, CFO of Redgate Software, shared in the webinar how, a few years ago, the company’s use of public cloud was fairly uncontrolled. Engineers had the freedom to spin up environments based on their individual needs to deliver the best results for customers.

While this autonomy allowed for innovation, it also led to rapidly escalating and unpredictable costs. As Steven Mitchell put it, engineers didn’t feel the financial responsibility for the costs, as they were spending from an “invisible parent budget.”

By integrating FinOps and improving visibility into cloud costs, Redgate Software was able to introduce a clear sense of ownership and accountability. Engineers began to view cloud spending as if they were using their own money, making more mindful decisions about resource usage. This shift not only helped control costs but also ensured that engineering decisions were more aligned with the company’s broader financial goals.

Here’s a glimpse of some of the core FinOps principles that businesses looking to optimize their cloud costs can adopt:

• Collaboration: Bringing together finance, engineering, and IT teams to make sure everyone is on the same page when it comes to cloud spending goals.
  
• Ownership: Assigning clear responsibility for cloud costs to specific teams or departments to encourage accountability and smart spending.
  
• Timely Reporting: Using real-time tools to track cloud spending, identify any unexpected spikes, and compare what’s actually spent versus what was budgeted.
  
• Value-Driven Decisions: Focusing on the business value delivered by cloud resources, not just the cost, to guide decisions.
  
• Centralized Guidance: Ensuring all teams adhere to the same practices and policies, so everyone works toward the same financial objectives.

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Governance: The Backbone of Finance-Led FinOps

While visibility and accountability are key to cloud cost optimization, another crucial aspect is governance. Governance refers to the structured frameworks and policies that guide cloud cost management and align spending with financial goals. These frameworks establish clear guidelines, processes, and controls that maintain financial oversight, support compliance, and drive cost management practices.

"Implementing well-defined governance structures and policies around cloud usage ensures that cost optimization isn't just a one-time project but becomes an ongoing embedded discipline." - Mike Boudreau, Head of FinOps Delivery, Virtasant

Particularly for finance leaders, governance provides the necessary guardrails to ensure that financial controls are consistently applied across departments. These guardrails enable proactive cost management instead of reactive fixes. When integrated with FinOps principles, governance strengthens accountability, promotes compliance, and aligns cloud costs with the broader business strategy.

Take, for instance, the implementation of a consistent tagging policy. This ensures that all cloud resources are accurately allocated, making it easier to track and optimize costs. Similarly, documenting clear guidelines for cloud usage, such as when and how to downsize or terminate underutilized resources, helps prevent unnecessary spending.

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Cost Allocation Is the First Step to Cloud Cost Optimization for Finance Leaders

Specifically for finance leaders, tracking and allocating cloud costs can be complicated due to a lack of proper tools. Moving from traditional IT infrastructure, which typically involves fixed costs (like upfront investments in hardware), to the cloud, where costs are based on usage, introduces a new level of unpredictability.

As Mike Boudreau, Head of FinOps Delivery at Virtasant, pointed out in the webinar, the shift to the cloud often results in a lack of visibility into what drives those costs. He then explained that without the right systems in place to track spending, finance teams struggle to manage and forecast cloud costs, resulting in overspending and unexpected budget issues.

To tackle this, finance-led FinOps can set clear cost allocation strategies. One effective way is through resource tagging, which allows costs to be assigned to specific teams, projects, or products. Mike Boudreau also highlighted that proper tagging helps organizations pinpoint where their cloud costs are going and supports accountability processes, such as showback or chargeback.

Additionally, real-time reporting tools and dashboards are crucial for tracking spending, identifying unusual spikes, and forecasting future costs. With these systems in place, finance leaders can take a more proactive approach to managing cloud costs, ensuring spending aligns with business goals and identifying potential savings.

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Quick Wins Finance Leaders Can Use to Reduce Cloud Costs

While there are various cloud strategies that financial leaders can help implement, there are a few quick wins that can deliver immediate results without compromising performance. Here are some of the tips that were discussed in the webinar related to FinOps for CFOs:

• Deleting orphaned storage and snapshots: Eliminate cloud resources that are no longer in use to reduce unnecessary costs.
• Terminating or scheduling periodically used or idle resources: Stop or schedule instances that are not needed all the time, helping reduce costs by only using resources when they’re required.
• Leveraging discounts for committed usage: Lock in discounted rates by committing to specific usage over a longer period, leading to significant savings.

By taking these initial actions, organizations can achieve significant improvements in their cloud spending. These strategies set the foundation for more sustainable, long-term cost optimization as part of a broader finance-led FinOps approach.

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Team Alignment: The Key to Managing and Reducing Cloud Spend

Going beyond quick wins, it’s crucial to develop a long-term, finance-led FinOps strategy that keeps cloud costs in line with business goals. As Mike Rosenberg, FinOps Foundation Ambassador and FinOps Leader at Nubank, discussed in the webinar, it's essential to consider both cost and business impact when making decisions about cloud usage. He emphasized that finance leaders can align finance, IT, and business teams around shared goals.

Simply put, finance provides the overall financial perspective and the "WHY" behind cost-saving measures, while IT brings the technical expertise and the "HOW." The business side focuses on the product or service value and the "WHAT." Regular communication and collaboration between these teams help identify redundant costs, optimize resources based on actual versus perceived needs, and make informed trade-offs between cost, performance, and features.

This way, managing cloud costs isn’t just about cutting expenses but also about driving measurable business value. An interesting example from Mike Rosenberg was how, at Nubank, the FinOps team aligns cloud cost management with broader business priorities.

Nubank is growing rapidly, adding about 5 million customers each quarter. This growth creates the risk of cloud costs spiraling out of control, especially with engineers focused on developing new features and expanding into new markets. However, Nubank's approach ensures that cloud cost management remains aligned with its mission to serve the unbanked population in Latin America.

As Mike Rosenberg put it, “For us, cost is job five.” Engineers are never asked to prioritize cost-saving measures over more critical objectives such as security, regulatory compliance, system stability, and exceptional customer service. Instead, they focus on business outcomes, like increasing revenue or reducing customer churn. This clear understanding wouldn’t be possible without strong collaboration between finance, IT, and engineering teams.

Mike Rosenberg also went on to explain that at Nubank, engineers are taught the financial impact of their decisions through basic accounting training, helping them understand how their work affects the income statement. This ensures that finance doesn’t overstep into engineering’s space. By setting clear targets like unit cost or gross margin, finance makes sure cloud costs align with business goals while allowing engineers the freedom to do their work.

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FinOps for CFOs Drives Sustainable Cloud Cost Optimization

The webinar concluded with a round of insightful questions and answers, highlighting the crucial role that finance leaders play in balancing cloud cost optimization with business growth. One particularly interesting question was about the role of finance leaders in the long-term maturity of FinOps and how they can lead that journey.

As Mike Rosenberg, FinOps Leader at Nubank, discussed, one of the key responsibilities of finance leaders is teaching engineers about the impact their decisions have on margins and the broader financial picture. Every architectural, development, and operational decision is, in fact, a purchasing decision that directly affects the company’s cost structure. Many engineers don’t realize this, as their focus is often on coding and creating innovative features.

At Nubank, Mike Rosenberg explained how they track unit economics, using demand drivers such as "cost per thousand transactions" for their credit card group. This approach helps them distinguish between overspending due to increased business activity, which they’d welcome, and overspending due to inefficiencies in unit cost, requiring a deeper conversation with engineering. They also separate the influence of business growth from unit cost issues in their forecasting and budgeting.

This maturity in understanding cloud costs is vital for building a sustainable FinOps practice. Finance leaders play a crucial role in guiding these conversations, ensuring that cost optimization efforts are aligned with business goals. That cloud cost decisions are made with an understanding of their broader business impact.

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What Comes Next in Finance-Led FinOps

Another important point raised during the Q&A was how to approach cloud financial management for finance leaders. While organizations can handle cloud cost optimization internally, it’s often a slow and challenging process. It may take 6 to 12 months to see significant savings, and even then, they might only capture about 25% of the potential savings due to the complexity and effort involved.

In contrast, working with FinOps experts like Virtasant speeds up this process. With expert insights, companies can be up and running in as little as 4 weeks, gaining full visibility into their cloud spend and access to best practices. Ultimately, partnering with experts can significantly reduce the time and effort required to optimize cloud costs, delivering immediate results and long-term savings.

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