Authors: Vinay Kumar Ramachander/ Asst. Vice President, DevOps
Introduction
As per a recent whitepaper published by Becker’s Hospital Review, Healthcare organizations will face three main challenges in 2024: financial constraints, workforce disruption and growing competition. To address the financial constraints, Healthcare organizations need to prioritize optimizing their IT infrastructure costs and an optimized FinOps framework can help immensely.
This article delves into the FinOps methodology and explores the AWS services that can be used to effectively implement good cloud governance.
Benefits of FinOps for Healthcare organizations
Each type of Healthcare organization whether MedTech, Payer, Provider, or Life Sciences depending on their cloud adoption methodology, might experience varying degrees of the following benefits:
Cost optimization - By adopting FinOps practices, Healthcare organizations can gain insights into their cloud spending patterns, identify areas of inefficiency and waste, and take proactive measures to optimize costs.
Operational efficiency - With a clear understanding of their cloud environment, organizations can identify opportunities to enhance workflows, automate processes, and boost overall efficiency.
Enhanced business agility - FinOps empowers Healthcare organizations to scale their cloud resources based on demand, enabling them to swiftly adapt to evolving business needs.
Improved governance and compliance - FinOps assists in establishing sturdy governance frameworks, ensuring that cloud usage aligns with industry regulations, organizational policies, and security requirements.
Strategic decision-making - With comprehensive visibility into cloud spending patterns, organizations can align their cloud strategy with broader business objectives and make well-informed decisions.
Environmental sustainability - FinOps can play a significant role in promoting sustainable cloud usage by raising awareness of the carbon footprint associated with cloud resources.
Understanding FinOps
FinOps is a set of practices that brings together finance, technology, and business teams to accelerate cloud adoption while optimizing costs. It emphasizes collaboration, transparency, and accountability throughout the entire cloud journey. The FinOps lifecycle typically involves three stages: Inform, Optimize, and Operate.
Inform: Gaining Visibility
AWS provides a plethora of tools that empower organizations to gain deep insights into their cloud spending. Amazon CloudWatch, AWS Cost Explorer, and AWS Budgets are some of the key services that facilitate cost visibility.
- Amazon CloudWatch: This real-time monitoring service provides organizations with the ability to track AWS resources and applications. CloudWatch enables stakeholders to gain valuable insights into resource utilization and performance metrics. By setting up alarms and automating responses, organizations can dynamically optimize resource usage, ensuring efficiency and cost-effectiveness.
- AWS Cost Explorer: An analytics tool that provides a comprehensive view of costs over time, Cost Explorer enables users to analyze historical data and forecast future expenses. This service is instrumental in identifying trends that might impact the budget, allowing organizations to make informed decisions about resource allocation and utilization.
- AWS Budgets: Proactive cost management is facilitated by AWS Budgets, allowing organizations to set custom cost and usage budgets. These budgets trigger alerts when predefined thresholds are exceeded, providing stakeholders with early warnings to prevent budget overruns. This proactive approach ensures better control over expenses and aligns spending with organizational objectives.
KPI Tracker and modernization Dashboard
Optimize: Cost efficiency with AWS native services
Once informed about their cloud spending patterns, organizations can proceed to the optimization phase. AWS offers a myriad of native services designed to enhance cost efficiency and resource utilization.
- Amazon EC2 Spot Instances: For workloads with flexible start and end times, Spot Instances offer significant cost savings compared to On-Demand Instances. Organizations can leverage these Instances for fault-tolerant and stateless applications.
- AWS Lambda: Serverless computing with AWS Lambda allows organizations to execute code without provisioning or managing servers. This pay-as-you-go model ensures cost efficiency by charging only for the actual compute time consumed.
- Amazon S3 Intelligent-Tiering: AWS offers multiple storage classes for Amazon S3, including the Intelligent-Tiering storage class. This class automatically moves objects between two access tiers based on changing access patterns, optimizing costs without sacrificing performance.
- AWS Auto Scaling: With Auto Scaling, organizations can automatically adjust the number of Amazon EC2 Instances to handle changes in demand for their applications. This ensures optimal resource usage, avoiding unnecessary expenses during low-demand periods.
Operate: FinOps in Action
The Operate phase focuses on implementing the strategies devised during the Inform and Optimize stages. AWS provides several tools and services to streamline financial operations and maintain cost control.
- AWS Organizations: As organizations scale their cloud presence, managing multiple AWS accounts can become complex. AWS Organizations is an account management service that simplifies this process by allowing users to consolidate multiple AWS accounts allowing them to be centrally managed. This enables organizations to apply a consistent set of policies, including cost management, across all accounts.
- AWS Resource Groups: Efficient resource tracking is crucial for effective cost allocation and management. AWS Resource Groups allow users to create, view, and organize related resources based on custom criteria. This feature streamlines resource management and enhances cost visibility.
- AWS Tagging: Proper resource tagging is a cornerstone of effective cost allocation and management. AWS allows users to tag resources with metadata, enabling them to categorize and track costs based on business-specific criteria. This helps organizations gain granular insights into resource usage and associated costs.
- AWS Cost Anomaly Detection: In the dynamic cloud environment, unexpected cost increases can occur. AWS Cost Anomaly Detection employs machine learning algorithms to identify unusual spending patterns and potential cost anomalies. This proactive approach enables organizations to investigate and address unexpected cost increases promptly, preventing financial surprises.
Culture
Create a cost-conscious mindset. Empower teams with FinOps education and tools like AWS Billing Alerts to automatically notify them of potential cost spikes.
- AWS FinOps Foundation: Foster a cost-conscious culture through FinOps certification programs and educational resources.
- AWS Billing Alerts: Notify engineers and stakeholders of unexpected cost spikes, promoting prompt investigation and corrective action.
- Internal Dashboards: Share cost insights and optimization successes with your team, making cost management a transparent and collaborative effort.
Cloud Intelligence Dashboards
Cloud Intelligence Dashboards which are an open-source framework, maintained by a group of customer-focused AWS users, enable access to high-level and granular insights into their cost and usage data. Supported by the well-architected framework, these dashboards can be deployed by any customer in their environment, speedily. These dashboards help drive financial accountability, optimize costs, track usage goals, implement best-practices for governance, and achieve operational excellence across the organization.
The Cloud Intelligence Dashboards offer various advantages:
- Security: The dashboards support Identity and Access Management (IAM), do not require any agents to be installed, retain all data within the organization, and use only native AWS services.
- In-depth and prebuilt insights: The dashboards provide hundreds of pre-built visuals, offer resource-level granularity, are fully customizable, and provide machine learning-driven insights.
- Cost efficient: Since the dashboards are serverless, users only need to pay for what they use.
Conclusion
FinOps is not a one-time rodeo. It is a continuous journey of monitoring, optimizing, and refining the cloud cost management practices. As cloud environment evolves, adapt FinOps strategies to ensure responsible and sustainable growth . CitiusTech’s 100% focus on Healthcare combined with AWS’s cutting edge cloud technology helps Healthcare organizations take full control of their cloud environments.
Embracing the FinOps methodology on AWS empowers Healthcare organizations to achieve a delicate balance between innovation, agility, and cost optimization. The combination of informative tools, cost-efficient native services, and operational best practices positions enterprises to thrive in the cloud environment. By leveraging AWS's extensive set of services, Healthcare organizations can navigate the complexities of cloud financial management, ensuring sustainable growth and profitability.
As the cloud continues to evolve, a FinOps mindset becomes integral for Healthcare organizations aiming to maximize the benefits of their AWS investments while maintaining financial prudence. The journey toward mastering FinOps is ongoing, and Healthcare organizations that embrace this approach are well-positioned to navigate the dynamic landscape of cloud computing successfully. In conclusion, the synergy between FinOps principles and AWS native services paves the way for Healthcare organizations to not only optimize costs but also unleash the full potential of cloud innovation.
