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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

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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

I've spent a lot of time in the channel, and one thing I keep coming back to is this: a partner program is only as good as what it looks like in the field. Many programs look great on paper, but when a partner is in front of a customer navigating a complex hybrid environment or trying to make the case for AI-powered observability, the gap between what a vendor promises and what it actually delivers becomes very clear, very fast ...

Enterprises today operate in a real-time environment where uninterrupted access to trusted data has become a baseline expectation for users, applications and automated systems. Traditional DataOps models, built on manual effort and human triage, cannot keep pace with this always active demand. AI agents are emerging as the operational backbone, ensuring consistent data availability, reinforcing trustworthiness and enabling a level of scale that manual processes cannot achieve ...

For decades, trust in the digital workplace rested on familiar signals. We trusted faces on video calls, voices on the phone, and emails that appeared to come from people we knew. These cues felt human and intuitive. They anchored how decisions were made, approvals were granted, and access was authorized. AI-powered deepfakes have quietly broken that model ...

Cloud migration was supposed to be a one-way door. For most enterprises, it turns out it isn't. Cloud data repatriation is a real and growing trend. A new survey ... finds that 89% of organizations plan to expand their on-premises infrastructure footprint over the next two years — and 75% have already moved at least some workloads back from public cloud in the past 24 months. The findings point to a broad rethinking of where data belongs ...

Over the past few years, large language models (LLMs) have revolutionized the software industry. Given their ability to excel at multi-step reasoning, LLMs have helped enterprises streamline workflows and adapt to the unknown. However, employing such models comes with sky-high costs, latency issues, and limited flexibility. In the realm of IT operations, it is generally wiser to employ smaller, domain-specific models instead ...

For years, DevOps teams operated under a simple assumption: collect enough telemetry, and you can find and fix any problem. That assumption is breaking down. Modern enterprises now operate across microservices, hybrid cloud environments, APIs, Kubernetes, and highly automated delivery pipelines. Releases happen continuously, dependencies shift constantly, and failures spread faster than teams can diagnose them ...

New Relic surveyed IT and engineering leaders from the media and entertainment (M&E) sector to understand what's working — and where challenges persist with their observability practices. The findings reveal how M&E organizations are navigating rising platform complexity, audience expectations, and AI-driven change. Below are five takeaways that stand out ...

Let me start with something I've seen play out more times than I can count. A team hits a wall with the cloud. Costs creep up, then spike. Performance starts to feel inconsistent. Someone in finance asks a simple question like "why did this double?" and nobody has a clean answer ... Maybe this isn't the right place for everything. That realization feels like a breakthrough, like you've identified the problem. In reality, you've just identified the starting line ...

In MEAN TIME TO INSIGHT Episode 24, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses network observability tool sprawl ... 

In cloud-native systems, scaling is often as simple as moving a slider. For on-premise databases, the stakes are different. Over-provisioning hardware is expensive. Under-provisioning leads to performance bottlenecks that are difficult to fix once the equipment is in the rack ...