Optimizing Cloud Costs with FinOps

Customer Context

Cloud computing has been a huge change in the way businesses operate, offering scalability, flexibility, and efficiency. However, with these advantages come significant financial challenges. Many organizations struggle to control cloud costs, leading to budget overruns and inefficiencies. Without a structured approach to financial governance, companies may either overspend on underutilized resources or compromise performance to cut costs.

In the insurance industry specifically, these cloud cost management challenges are particularly acute. With 91% of insurance firms currently migrating to the cloud in some form, many insurers find that their cloud business cases are not holding up, with cloud solutions proving significantly costlier than anticipated compared to on-premises alternatives. Insurance companies face unique complexities including the need to manage sensitive customer data across multi-cloud environments, integrate with legacy systems that handle critical policy and claims data, and maintain strict regulatory compliance requirements.

The Challenge

Our client is a leading global insurance provider offering comprehensive insurance, investment management, and financial services across multiple markets. The company provides property-casualty insurance, life & savings products, and asset management services to millions of customers worldwide.

As part of their digital transformation journey, the organization heavily relied on cloud-based initiatives to drive innovation and operational efficiency.

However, with rapid cloud adoption came the challenge of managing increasingly complex and growing cloud expenses, requiring a structured approach to balance cost optimization with performance requirements.

To address these challenges, our customer partnered with us to implement a FinOps strategy. FinOps, or Financial Operations, is a methodology that integrates finance, operations, and technical teams to ensure cost-effective cloud usage without sacrificing performance. By fostering collaboration across departments, FinOps promotes continuous monitoring, analysis, and cost optimization.

Our client implemented a FinOps lifecycle framework, which consisted of several key phases:

Solution Stages

Our customized FinOps Strategy was implemented in 3 phases

Inform

During this phase, our teams implemented robust monitoring and reporting systems that provided real-time insights into the insurance provider's cloud expenditures across all services and departments. The team established standardized cost allocation methods and tagging strategies to ensure accurate tracking of expenses by business unit, project, and application.

Our teams also focused on creating accessible dashboards and reporting mechanisms for different organizational levels. Finance teams gained access to executive-level cost summaries and budget variance reports, while technical teams received detailed resource utilization metrics and performance indicators.

Operate

During this phase we created actionable policies and governance frameworks that guided day-to-day cloud spending decisions. Clear approval workflows for new cloud resources, spending limits for different organizational levels, and automated policies for resource provisioning and deprovisioning were provided. Our teams implemented cost allocation models that accurately distributed cloud expenses across business units and cost centers, ensuring accountability and ownership.

The creation of cross-functional collaboration between finance, operations, and technical teams was crucial to ensure smooth execution of cost management policies. Regular cost review meetings and governance committees were established to monitor spending against budgets and make necessary adjustments to policies and procedures.

Optimize

We analyzed our client's cloud usage to find and optimize underused resources and oversized instances. Our team implemented automated solutions and scheduling for non-production environments to ensure resources were active only when necessary. We also used advanced techniques like reserved and spot instance planning to maximize cost efficiency without affecting performance or availability.

Regular optimization reviews were scheduled to assess the effectiveness of implemented changes and identify new opportunities for cost savings. The team developed predictive models to forecast future cloud spending and proactively identify potential cost spikes or optimization opportunities.

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ACCELERATED DECISION-MAKING

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COST SAVING

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DATA QUALITY IMPROVEMENT

Accelerated Decision-Making

Data-driven organizations are three times more likely to report significant improvements in decision-making speed, helping them to respond faster to market changes

(Source: HARVARD BUSINESS SCHOOL)

Cost Saving

Data Platforms can allow companies to realize cost savings of up to 15% through minimized redundancies, optimized resource utilization and streamlined processes.

(Source: McKinsey&Company)

Data Quality Improvement

Companies focusing on structured data management can improve data accuracy and consistency by 10-20% through centralized data platforms

(Source: McKinsey&Company)

Cost Saving

Our approach resulted in lower storage, data integration costs and data transaction costs. This reduction in expenses has enhanced the organization's financial efficiency and resource allocation.

Efficiency

We achieve streamlined Data Management processes and improved Governance by implementing structured guidelines and technical solutions. This led to smoother operations and better utilization of resources across the organization.

Stakeholders Confidence

Demonstrable improvements in Data Management increased stakeholder trust. This support was crucial for securing ongoing investments and resources for future Data Management initiatives.

Real-World Impact and Benefits

The implemented FinOps strategy delivered significant results.

Operational Area	Before FinOps Strategy Implementation	After FinOps Strategy Implementation
Cloud Cost Control	Uncontrolled cloud costs leading to budget overruns and inefficiencies	40% reduction in cloud costs through structured optimization
Financial Governance	Lack of structured financial governance causing overspending or performance compromises	Stronger financial governance with established monitoring and accountability
Resource Management	Overspending on underutilized cloud resources without visibility	Enhanced budget policies with waste identification and efficient resource allocation
Team Collaboration	Siloed finance, operations, and technical teams working independently	Integrated approach fostering collaboration across finance, operations, and technical teams
Cost Visibility	Limited insight into cloud spending patterns and usage trends	Comprehensive analysis and continuous monitoring of cloud expenditures
Performance vs. Cost Balance	Risk of compromising performance to cut costs or overspending to maintain performance	Maintained high performance and innovation capabilities while optimizing costs

The success of FinOps implementation demonstrates, beyond the 40% in reduction in Cloud costs, the power of a structured, collaborative approach to cloud cost management. By integrating financial oversight with operational and technical decision-making, businesses can strike a balance between cost efficiency and innovation.

As more companies accelerate their digital transformation, adopting a FinOps mindset will be crucial in maintaining financial sustainability. The customer journey serves as a compelling example of how businesses can take control of their cloud expenses while continuing to innovate and scale efficiently.