The FP&A Guide to Winning at Cloud Financial Management – Jeff Duresky at AWS
Oct 10, 2023
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Jeff Duresky, Senior FinOps Commercial Architect at Amazon AWS, discusses cloud financial management and its importance for FP&A. He shares insights on trading fixed expenses for variable expenses in the cloud, common cost language, cloud forecasting, cost reductions, and core metrics. The episode also touches on challenges with budget inheritance, the significance of finance and engineering collaboration in cloud forecasting, and the importance of note-taking and learning from other companies in cloud finance.
Establishing a common cost language is crucial in cloud financial management for grouping costs, filtering them, and understanding pricing models.
Technical knowledge is essential in cloud finance to facilitate effective communication between finance and engineering teams, enabling educated decisions on cost optimizations.
Cloud cost forecasting challenges can be overcome through documentation, collaboration between finance and engineering teams, and tracking unit costs related to business metrics.
Deep dives
The importance of understanding cloud finance
Understanding cloud finance is crucial for managing costs and optimizing resources in the cloud. One key aspect is establishing a common cost language, which involves defining how costs are grouped, filtering costs, and understanding pricing models. Unit costs are a key metric to track and analyze, as they provide insights into trends, cost optimizations, and operational efficiency. Additionally, close collaboration between finance and engineering teams is vital for accurate forecasting and cost management. Documentation, clear communication, and setting timelines for reporting and analysis processes are essential for successful cloud cost forecasting.
The role of technical knowledge in cloud finance
Having technical knowledge is important in cloud finance to facilitate effective communication between finance and engineering teams. It allows finance professionals to understand the business context and make educated decisions on cost optimizations. Knowledge of different cloud services, their pricing models, and metrics like cost per unit helps in identifying opportunities for cost savings and efficiency improvements. The ability to analyze and interpret data from the cloud and collaborate with technical experts enables more accurate forecasting and informed decision-making.
Challenges and strategies in cloud cost forecasting
Cloud cost forecasting presents various challenges, such as understanding complex pricing models, managing dynamic costs, and reconciling data between different systems. To overcome these challenges, it is important to document processes, assumptions, and timelines for forecasting exercises. Collaboration between finance and engineering teams is crucial to gain insights into workload plans and upcoming projects. Providing stakeholders with specific numbers and assumptions helps drive productive conversations and align expectations. Additionally, tracking unit costs and relating them to relevant business metrics can provide a holistic view of cost efficiency and support data-driven decision-making.
Achieving cost savings and efficiency in cloud finance
Cloud finance professionals can drive cost savings and efficiency by identifying optimization opportunities and collaborating with technical teams. Understanding cloud services and making informed choices based on factors like storage classes, instance types, and pricing plans can lead to significant cost reduction. Analyzing cost trends, identifying wasteful spending, and implementing adjustments or turning off unnecessary services contribute to overall cost efficiency. Engaging in ongoing communication, documentation, and sharing best practices within the organization helps optimize cloud expenditures and drive positive financial outcomes.
Key learnings from cloud finance experiences
Experiences in cloud finance highlight the importance of thorough understanding, documentation, and collaboration. Small issues and costs that may seem inconsequential in isolation can accumulate and significantly impact the overall budget. Taking notes, actively participating in discussions, and clarifying any ambiguities help newcomers to grasp cloud finance concepts and build effective forecasting models. Developing a common cost language and establishing clear communication channels between finance and engineering teams foster accountability and enable more accurate forecasting. Valuable insights can be derived from analyzing unit costs, monitoring trends, and driving cooperation between technical and financial experts in the organization.
Worldwide spend on cloud infrastructure hit a staggering $169 billion in 2022 with Microsoft and Amazon Web Services (AWS) combined, accounting for 62 percent of the cloud market share. In its first quarter of this year revenue from AWS totaled $21.35 billion, representing almost 17% of Amazon’s overall revenue. What lessons can we learn from within AWS about effective cloud financial management? How can FP&A teams better understand this complex line item? We are joined by Jeff Duresky, Senior FinOps Commercial Architect, Amazon AWS. He is a finance leader who supports the cloud leader’s largest and most strategic customers – and has also held strategic FP&A roles at companies including Capital One.
“As a finance professional the more you understand cloud, the better the insights you’ll be able to drive” – Jeff Duresky
In this episode
Jeff’s worst budget experience (aka professional service accrual releases).
The link between cloud financial management and FP&A
trading fixed expenses in cloud
Smart decisions related to cloud expenditures and management
Common cost language – how to get it right
Secrets to cloud forecasting
Promoting the best finance and engineering team conversations around the cloud
Finding reductions in costs for cloud users
Core metrics to assess and unit costs (cost per gigabyte, cost per instance)
First steps to begin forecasting cloud costs
My biggest finance strategic moment
The last finance thing I googled
The importance of taking notes in a career in FP&A
Follow and connect with Jeff Duresky on LinkedIn https://www.linkedin.com/in/jeffduresky/
FP&A Today is brought to you by Datarails, Datarails is the AI-powered financial planning and analysis platform. Keep your own Excel financial models and spreadsheets and benefit from AI for data consolidation, reporting and planning.
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