Optimizing hybrid cloud expenditure and efficiency: Insights from our FinOps carbon strategy

As a Premier Partner of the FinOps Foundation, along with all of the major cloud hyperscalers including Amazon Web Services, Azure and Google Cloud Platform, NTT DATA is dedicated to assisting organizations in leveraging financial operations (FinOps) to optimize cloud usage and expenditure.

This effort includes offering customized FinOps solutions for state and federal government agencies to tackle their unique challenges and inefficiencies with cloud cost management. With advancements in artificial intelligence driving an increased consumption of cloud infrastructure, this strategy has expanded to focus on assigning financial value to the carbon emissions of these environments while reducing their environmental impact. As part of this focus on FinOps Carbon, NTT DATA is a leading contributor to the cloud sustainability workstreams of the FinOps Foundation's framework.

The challenge

Government agencies, particularly those with centralized cloud managed services teams, often face cost inefficiencies due to their federated application environments. The current chargeback model, where an agency requests a cloud environment that a central team provisions, lacks critical visibility into utilization measures. This model leads to several issues:

• Overprovisioning and overpayment: Agencies tend to over-provision cloud resources to match legacy on-premises environments, resulting in significant overpayment. Unlike traditional data centers, the cloud offers elasticity, allowing for resources to scale according to demand. However, agencies often fail to take full advantage of this flexibility, leading to wasted resources.
• Idle environments: It is common for organizations to leave environments running even when they are not being used. This practice of leaving idle resources spinning unnecessarily incurs additional costs and inefficiencies.
• Increased carbon emissions: Overprovisioning and leaving idle environments not only affect budgets but also contribute to unnecessary carbon emissions, counteracting the environmental goals many agencies strive to achieve.
• Lack of coordination: Without a coordinated effort and visibility into cloud utilization across the hybrid cloud estate, agencies miss out on the benefits of reserved instances, which could offer substantial cost savings and efficiency improvements.

Our solution

By implementing a robust FinOps framework, agencies can significantly reduce cloud overprovisioning and its associated costs, while also enhancing environmental sustainability through optimized resource allocation. At NTT DATA, we believe that state and federal agencies are poised to benefit greatly from a more coordinated approach to cloud management.

Introducing FinOps carbon solutions

NTT DATA has launched the world’s first and only FinOps Carbon Advisory Solution. This innovative offering is designed to maximize the business value of the cloud, sustainably. Our FinOps Carbon Value Innovation Triangle focuses on three main pillars:

• Cost and carbon: maximizing cost savings and carbon optimization to increase return on investment of the entire IT Estate and drive sustainable outcomes.
• AI innovation: leverage data driven insights from cost and carbon data to drive significant cost savings, deliver market-creativity, and gain first-movers advantage.
• Regulatory compliance: improve compliance requirements through comprehensive analysis of carbon emissions.

Staying informed

Key questions that drive an organization’s FinOps strategy include:

• What are we spending?
• What are we using?
• Who is responsible for what usage?
• How do we manage growth?
• How do we align on sustainable goals?

Measuring success

To have a successful FinOps program, agencies need to measure success metrics that include:

• Is our data consistent and clear?
• Are we capturing small improvements consistently?
• How do we define our time horizon?
• Are we evolving our metadata and hierarchy?
• How do we rationalize our scope 3 data in the cloud?

Challenges and insights

Maximizing Cloud ROI is difficult. Common challenges include:

• A lack of visibility results in challenges when it comes to identifying and addressing anomalies as well as unexpected cloud cost events, making it difficult to precisely recognize and optimize shared spending assets across different business units.
• Cost allocation in that KPIs lack standardization, leading to inconsistencies between cloud cost budgets and forecasts.
• Inconsistent reporting and complex business processes impact decision-making.
• Organizations struggle to measure Scope 3 carbon data.

NTT DATA’s FinOps carbon methodology

Our approach integrates FinOps Carbon Operating Model to maximize business value sustainably. Led by certified FinOps experts, our methodology includes:

• A FinOps Carbon Analysis provides detailed cost savings insights, along with a review and suggestions for reducing costs and cloud emissions.
• During the implementation phase, certified FinOps experts put forward recommended strategies to cut costs and decrease carbon emissions while enhancing cost-saving optimizations through the use of reserved instances.
• In the final phase of the methodology, NTT DATA conducts FinOps Carbon maturity workshops to support organizational change management and enhance organization capabilities within the domain.

Benefits of FinOps

Adopting a FinOps strategy brings numerous advantages:

• Enhanced financial accountability: FinOps practices instill a culture of financial responsibility across cloud stakeholders, ensuring budget adherence and financial transparency.
• Optimized resource utilization: Continuous monitoring and right-sizing of cloud resources lead to significant cost savings and efficient resource management.
• Improved decision making: Real-time data and analytics empower teams to make informed decisions regarding cloud spending and resource allocation.
• Increased agility: FinOps enables rapid adjustments to cloud environments in response to changing business needs, fostering innovation and flexibility.
• Environmental sustainability: By minimizing overprovisioning and addressing idle environments, FinOps practices contribute to reduced carbon emissions, supporting organizations' sustainability goals.

Client success stories

NTT DATA's FinOps Carbon solutions have delivered significant results for our clients. Here are a few examples:

Global government contractor

Customer Needs: Accelerate digital transformation, simplify internal systems, comply with transportation regulations. Business Outcomes: More than 10% annualized cost savings in the first phase, reduced costs by moving to managed cloud services, greater scalability, and faster time to market.

Supercar manufacturer

Customer Needs: Reduce and control cloud costs, optimize SAP in public cloud. Business Outcomes: Cloud costs reduced by 25%, SAP environment highly optimized, seamless integration with NTT DATA’s general cloud management service.

Large Telecommunications Provider

Customer Needs: Significantly reduce public cloud costs, improve cloud spend forecast accuracy, establish effective IaC operation for automated Terraform optimization. Business Outcomes: 32% realized cost savings, optimization level increased from 5% to over 90%, effective multi-vendor governance model established.

Conclusion

NTT DATA is dedicated to helping government agencies and organizations optimize their hybrid cloud expenditure and efficiency. By leveraging our FinOps Carbon Strategy, we offer comprehensive insights and solutions that drive financial resilience and sustainable outcomes to our government customers.

 

Take the first step towards optimizing your hybrid cloud expenditure and enhancing efficiency by partnering with NTT DATA. Our FinOps Carbon Strategy not only helps you achieve significant cost savings but also aligns your cloud operations with sustainability goals. Learn more here.