Skip to main content

Using FinOps to Elevate IT in the Age of AI

Bill Lobig
IBM Software

From hardware and software investments, to the cost of supporting critical talent, IT spending is ubiquitous across industries, sectors and geographies. Worldwide, IT spending is projected to exceed five trillion this year – nearly an increase of 8% from 2023. Simply put, IT is a reality within any given organization.

However, your IT investments can be negatively impacted by high operational expenses and back-office inefficiencies, which, for some organizations, can cost up to 30% of their annual revenue. With business leadership keeping a close eye on budgets, every penny matters — and that's where FinOps can help keep IT spending in check while still allowing for innovation and investment.

Adapting to Today's Cost of Business

When an IT issue is not handled correctly, not only is innovation stifled, but stakeholder trust can also be impacted (such as when there's an IT outage or slowdowns in performance). When you add new technology investments and innovations into the mix, you have a recipe for disaster. The number of companies investing $10 million+ in AI is expected to double over the next year and cloud spend is poised for takeoff. Due to these increases, it will be critical for organizations to get their IT house in order now before new investments add chaos — and higher costs — to the mix.

FinOps Provides an Opportunity for IT to Show Value — Not Just Tell

When incorporating FinOps into an organization from both a technology and a culture perspective, organizations can reduce cloud costs by as much as 30%. This leaves ample room to reallocate funds and energy into new investments, provide more accurate forecasting, create more efficient workload planning, so IT teams can focus on innovating and creating new value rather than just managing existing applications and being burdened with day-to-day tactics.

How does this work?

According to the FinOps Foundation, organizations that have a mature FinOps posture can more effectively leverage automation, appropriately allocate their spend to the areas of the business that need it most and set very high KPIs to address the most difficult of use cases. With FinOps — in real time — the IT business can provide critical insights, information and recommendations to inform increasingly important spending decisions.

Connecting the Dots — from CFO to Developer

When discussing IT spend, the most commonly considered stakeholder in charge tends to be the CFO, the CEO or another revenue and business-centric leader. However, a FinOps framework creates a holistic and non-hierarchical platform across levels, functions and responsibilities encouraging collaboration and mutual understanding between finance and IT teams.

In today's enterprise, a developer can use company resources to modernize a company's application, an IT manager can leverage resources to provision onboard new employees, and a CIO can employ resources to invest in a new AI tool — all simultaneously. However, without an element of communication or strategy, these three roles will effectively cancel out the benefits of the others.

FinOps enables professionals at all levels of the organization to have equal visibility into overall IT spend. This common language allows leaders to make informed financial decisions at the individual level like never before.

Bill Lobig is VP, Automation Product Management, IBM Software

Hot Topics

The Latest

Production incidents rarely announce themselves as database problems. They appear as slow transactions, timeouts, rising response times, or an application struggling under a workload it previously handled. APM provides an essential starting point. It can identify a slow transaction path, highlight an affected service, and show that a database dependency is consuming more time than expected. But identifying the database as part of the problem is not the same as explaining what is happening inside it ...

Cloud teams are under constant pressure to reduce spend without slowing development or increasing operational risk. They are deploying autoscalers, rightsizing workloads, enforcing resource requests, reviewing utilization dashboards, and building FinOps processes around cloud-native environments. Yet the results often disappoint ...

Ask most IT leaders about their biggest concern with AI and you'll hear the same answer: hallucinations ... Today, however, the conversation has shifted ... As organizations move beyond chatbots and experiments, they are increasingly deploying AI agents that perform multi-step tasks. These systems retrieve documents, query databases, call APIs, generate reports, write code, and make recommendations. The issue is not whether the model can reason. The issue is whether the organization can see, verify, and govern the decisions being made along the way ...

While organizations want to take control of their telemetry, building telemetry pipelines from scratch can be a very daunting, complicated task, even when leveraging open-source standards like OpenTelemetry. It requires specialized knowledge across distributed systems, data engineering, and security. This fragmented approach across systems causes higher operational costs; it puts a strain on resources and reduces efficiency as teams have to work with different interfaces and processes ...

For decades, enterprise networks were designed around a simple assumption: work happened inside the office. Applications lived in centralized data centers, employees connected through internal infrastructure, and security focused on protecting the perimeter that surrounded everything ... But the way organizations operate today bears little resemblance to that environment. Cloud platforms host critical applications, employees connect from homes and airports as often as they do from offices, and partners collaborate through shared systems that exist far beyond corporate walls. In short, the corporate network no longer resembles the environment it was designed to protect ...

As an analyst who researches how IT organizations design, build, and operate their networks, I find that network data is a constant source of pain. Network teams struggle with data quality, fragmentation, authority, access, and trust. And these issues undermine everything they try to do. Here are the numbers: Only 45% of network teams are completely confident in the accuracy of their network source of truth, which documents the intent of their network ...

The 2026 Global Data Center Survey from Uptime Institute reveals an industry navigating workforce constraints, escalating outage expenses, even as rising costs remain the top concern for management teams ...

The next observability gap may not be in the code. It may be under the rack. That sounds strange until you think about how AI incidents actually feel in the middle of an investigation ... The application dashboard may be accurate. It may also be stopping at the wrong boundary. AI systems depend on software, but they also depend on a dense physical stack: racks, power paths, thermal margin, maintenance activity and, in many environments, liquid cooling. Those physical dependencies can change slowly before they look like a software incident ...

Certificate expiration is the rare outage you can see coming. Every TLS certificate carries the date it stops working, so the moment it will begin breaking connections is knowable in advance. That's what makes an expired certificate such a frustrating way to lose a service. What's changing now is how often that date comes around ...

Enterprises operate different combinations of workloads across cloud, hybrid and multicloud environments. For business-critical workloads, teams need to consider monitoring and observability early so they can detect health issues, investigate failures, and understand operational impact. Organizations place workloads on cloud platforms based on a combination of technical requirements, economics, existing dependencies, organizational standards, and business priorities. Their monitoring priorities therefore depend on what they operate and where those systems run. Those priorities will not look the same for every organization ...

Using FinOps to Elevate IT in the Age of AI

Bill Lobig
IBM Software

From hardware and software investments, to the cost of supporting critical talent, IT spending is ubiquitous across industries, sectors and geographies. Worldwide, IT spending is projected to exceed five trillion this year – nearly an increase of 8% from 2023. Simply put, IT is a reality within any given organization.

However, your IT investments can be negatively impacted by high operational expenses and back-office inefficiencies, which, for some organizations, can cost up to 30% of their annual revenue. With business leadership keeping a close eye on budgets, every penny matters — and that's where FinOps can help keep IT spending in check while still allowing for innovation and investment.

Adapting to Today's Cost of Business

When an IT issue is not handled correctly, not only is innovation stifled, but stakeholder trust can also be impacted (such as when there's an IT outage or slowdowns in performance). When you add new technology investments and innovations into the mix, you have a recipe for disaster. The number of companies investing $10 million+ in AI is expected to double over the next year and cloud spend is poised for takeoff. Due to these increases, it will be critical for organizations to get their IT house in order now before new investments add chaos — and higher costs — to the mix.

FinOps Provides an Opportunity for IT to Show Value — Not Just Tell

When incorporating FinOps into an organization from both a technology and a culture perspective, organizations can reduce cloud costs by as much as 30%. This leaves ample room to reallocate funds and energy into new investments, provide more accurate forecasting, create more efficient workload planning, so IT teams can focus on innovating and creating new value rather than just managing existing applications and being burdened with day-to-day tactics.

How does this work?

According to the FinOps Foundation, organizations that have a mature FinOps posture can more effectively leverage automation, appropriately allocate their spend to the areas of the business that need it most and set very high KPIs to address the most difficult of use cases. With FinOps — in real time — the IT business can provide critical insights, information and recommendations to inform increasingly important spending decisions.

Connecting the Dots — from CFO to Developer

When discussing IT spend, the most commonly considered stakeholder in charge tends to be the CFO, the CEO or another revenue and business-centric leader. However, a FinOps framework creates a holistic and non-hierarchical platform across levels, functions and responsibilities encouraging collaboration and mutual understanding between finance and IT teams.

In today's enterprise, a developer can use company resources to modernize a company's application, an IT manager can leverage resources to provision onboard new employees, and a CIO can employ resources to invest in a new AI tool — all simultaneously. However, without an element of communication or strategy, these three roles will effectively cancel out the benefits of the others.

FinOps enables professionals at all levels of the organization to have equal visibility into overall IT spend. This common language allows leaders to make informed financial decisions at the individual level like never before.

Bill Lobig is VP, Automation Product Management, IBM Software

Hot Topics

The Latest

Production incidents rarely announce themselves as database problems. They appear as slow transactions, timeouts, rising response times, or an application struggling under a workload it previously handled. APM provides an essential starting point. It can identify a slow transaction path, highlight an affected service, and show that a database dependency is consuming more time than expected. But identifying the database as part of the problem is not the same as explaining what is happening inside it ...

Cloud teams are under constant pressure to reduce spend without slowing development or increasing operational risk. They are deploying autoscalers, rightsizing workloads, enforcing resource requests, reviewing utilization dashboards, and building FinOps processes around cloud-native environments. Yet the results often disappoint ...

Ask most IT leaders about their biggest concern with AI and you'll hear the same answer: hallucinations ... Today, however, the conversation has shifted ... As organizations move beyond chatbots and experiments, they are increasingly deploying AI agents that perform multi-step tasks. These systems retrieve documents, query databases, call APIs, generate reports, write code, and make recommendations. The issue is not whether the model can reason. The issue is whether the organization can see, verify, and govern the decisions being made along the way ...

While organizations want to take control of their telemetry, building telemetry pipelines from scratch can be a very daunting, complicated task, even when leveraging open-source standards like OpenTelemetry. It requires specialized knowledge across distributed systems, data engineering, and security. This fragmented approach across systems causes higher operational costs; it puts a strain on resources and reduces efficiency as teams have to work with different interfaces and processes ...

For decades, enterprise networks were designed around a simple assumption: work happened inside the office. Applications lived in centralized data centers, employees connected through internal infrastructure, and security focused on protecting the perimeter that surrounded everything ... But the way organizations operate today bears little resemblance to that environment. Cloud platforms host critical applications, employees connect from homes and airports as often as they do from offices, and partners collaborate through shared systems that exist far beyond corporate walls. In short, the corporate network no longer resembles the environment it was designed to protect ...

As an analyst who researches how IT organizations design, build, and operate their networks, I find that network data is a constant source of pain. Network teams struggle with data quality, fragmentation, authority, access, and trust. And these issues undermine everything they try to do. Here are the numbers: Only 45% of network teams are completely confident in the accuracy of their network source of truth, which documents the intent of their network ...

The 2026 Global Data Center Survey from Uptime Institute reveals an industry navigating workforce constraints, escalating outage expenses, even as rising costs remain the top concern for management teams ...

The next observability gap may not be in the code. It may be under the rack. That sounds strange until you think about how AI incidents actually feel in the middle of an investigation ... The application dashboard may be accurate. It may also be stopping at the wrong boundary. AI systems depend on software, but they also depend on a dense physical stack: racks, power paths, thermal margin, maintenance activity and, in many environments, liquid cooling. Those physical dependencies can change slowly before they look like a software incident ...

Certificate expiration is the rare outage you can see coming. Every TLS certificate carries the date it stops working, so the moment it will begin breaking connections is knowable in advance. That's what makes an expired certificate such a frustrating way to lose a service. What's changing now is how often that date comes around ...

Enterprises operate different combinations of workloads across cloud, hybrid and multicloud environments. For business-critical workloads, teams need to consider monitoring and observability early so they can detect health issues, investigate failures, and understand operational impact. Organizations place workloads on cloud platforms based on a combination of technical requirements, economics, existing dependencies, organizational standards, and business priorities. Their monitoring priorities therefore depend on what they operate and where those systems run. Those priorities will not look the same for every organization ...