Practical FinOps with IBM, Part 3: Laying the Groundwork with IBM's FinOps Suite

As organizations embrace the shift to cloud, managing cloud costs effectively has become a necessity rather than an option. In Parts 1 and 2 of our Practical FinOps with IBM series, we laid the foundation for understanding FinOps principles and emphasized the importance of a collaborative, disciplined approach to cloud financial management. We explored why cloud costs differ fundamentally from traditional IT spending and highlighted the need for real-time visibility, cross-functional teamwork, and continuous optimization to drive value from every dollar spent. Now, in Part 3, we turn to IBM's powerful tools—Cloudability and Turbonomic—that help businesses achieve this level of financial precision.

We'll take an in-depth, step-by-step look at how these tools can help your organization transform FinOps from a theoretical concept into a practical, proactive framework, so that your teams can manage cloud costs strategically across the entire organization. Our aim is that by the end of this article, you'll walk away with both a technical and strategic understanding of how to lay the groundwork for a FinOps approach that scales with your organization's needs. 

Getting Started with Cloud Cost Control Using FinOps

If you’re new to FinOps, it can be challenging to know where to start. By the time you have the following four steps in place, however, you'll have a solid, working FinOps framework in place: 

• Step 1: Set up Visibility over cloud costs 
• Step 2: Build Accountability through precise cost allocation
• Step 3: Set up Alerts and Monitor usage 
• Step 4: Prepare for Continuous Optimization

As you might have noticed, each of these steps effectively and strategically incorporates the three core principles of FinOps: collaborative teamwork, real-time visibility, and continuous optimization. While it takes time and effort to bring about this culture shift, IBM’s integrated suite of FinOps tools makes the journey smoother and more seamless.

Now, let’s take a detailed look at how IBM Cloudability and IBM Turbonomic come into play at each of the steps outlined above. Be sure to take some notes or bookmark this page, as we’ll also give you concrete actions you can take along the way.

Step 1: Setting Up Visibility with IBM Cloudability

Visibility is critical for FinOps because it provides the foundation for making informed, real-time decisions on cloud costs. Without visibility, teams are flying blind. Cloudability is IBM’s solution for cloud cost visibility and allocation. Its goal is to provide a single, accurate view of all cloud spending, so teams across your organization can see, understand, and take responsibility for their usage.

Start by Consolidating Cloud Costs Across Providers

A common challenge in cloud cost management is fragmented data. Different cloud providers have different billing formats, terminologies, and metrics, making it difficult to get a clear picture of total cloud spending. IBM Cloudability tackles this by consolidating cost data from all major providers—AWS, Azure, Google Cloud, and others—into a single, unified view.

• Actionable Step: Connect Cloudability to each cloud provider’s billing system. This typically requires setting up secure access through API keys or billing credentials. Once connected, Cloudability will automatically pull cost data from each platform, normalizing it into one consistent dashboard.

Break Down Costs by Project, Team, or Department

Visibility is only helpful if teams can understand what they’re seeing. Cloudability’s allocation features allow you to assign cloud costs to specific teams, projects, or departments, so that each group knows exactly where its budget is going. This not only brings clarity but also establishes accountability, making it easier for teams to manage their own costs.

• Actionable Step: Use Cloudability's business mapping features to create cost centers based on your organization’s structure. For example, you can map costs to project codes, product lines, or departments. This allocation setup ensures that every team sees its own expenses and understands its financial impact.

Configure Dashboards for Targeted Visibility

Dashboards are a powerful tool for visualizing cloud costs, but they need to be tailored to meet the needs of each team. For example, engineering teams may want to see usage trends, while finance may be more interested in budget forecasts. Cloudability’s customizable dashboards let each team track the metrics that matter most to them.

• Actionable Step: Set up customized dashboards for key stakeholders. Focus on providing useful and relevant insights—such as current spending vs. budget, forecasted costs, and usage spikes—that can help each team make informed decisions in real time.

Step 2: Building Accountability Through Precise Cost Allocation

For FinOps to be effective, each team—whether engineering, operations, or finance—needs to understand and take responsibility for its cloud usage. By allocating costs to specific teams or projects, Cloudability provides a practical way to share accountability. 

Assign Costs Directly to Teams and Projects

Cost allocation is one of the most effective ways to foster financial accountability. When teams see their cloud usage broken down by project or service, they can take ownership of their spending and identify areas for improvement. Cloudability supports both direct allocation, where costs are assigned based on actual usage, and tag-based allocation, where costs are split according to tagging rules.

• Actionable Step: Start by establishing a tagging policy that categorizes resources by project, department, or environment (e.g., development, testing, production). Tags should be specific and consistent across cloud environments, as they form the basis for accurate cost allocation in Cloudability.

Implement Chargeback or Showback Models

Chargeback and showback models are effective ways to promote cost accountability without adding operational friction. A chargeback model directly bills departments based on their usage, incentivizing them to optimize their resources. A showback model, on the other hand, shows departments their usage and costs without directly charging them, providing awareness and accountability without impacting budgets directly.

• Actionable Step: Start with a showback model to introduce cost accountability gradually. Over time, you can transition to a chargeback model once teams are comfortable with their cost visibility and understand how to manage their budgets.

Enable Cross-Team Visibility for Transparency

Cross-team visibility is key to building a collaborative approach to FinOps. When engineering, finance, and operations all have access to the same cost data, they can work together more effectively to manage and optimize cloud usage.

• Actionable Step: Create shared dashboards that offer an at-a-glance view of the organization’s cloud expenses. Make these dashboards role-based and accessible to all relevant teams, so everyone has a common understanding of current costs and financial goals.

Step 3: Setting Up Alerts and Monitoring Usage

Once visibility and accountability are in place, the next step is to actively monitor cloud usage and set up alerts for any deviations. Monitoring usage in real time enables teams to respond quickly to budget overruns and unexpected spending spikes, helping prevent costly surprises.

Set Budget Limits for Departments and Projects

Setting budget limits creates clear boundaries around cloud spending, making it easier for teams to operate within financial targets. With Cloudability, you can set budget thresholds for individual projects or departments, making sure that each team has a specific spending limit to work within.

• Actionable Step: Establish monthly or quarterly budget limits for each team or project within Cloudability. Set limits based on historical usage data, adjusting as necessary to account for seasonal demand or new project needs.

Configure Alerts for Anomalies and Budget Thresholds

Unexpected spikes in cloud usage can signal issues, such as overprovisioned resources or runaway processes. Cloudability's alerting feature detects anomalies and sends notifications when spending approaches predefined thresholds, allowing teams to address issues before they become costly problems.

• Actionable Step: Set up budget alerts for each team and configure anomaly detection in Cloudability. You can define thresholds for usage or cost, and Cloudability will notify teams when those limits are approached, allowing for quick corrective actions.

Monitor Usage Trends for Smarter Forecasting

Tracking usage trends over time provides valuable insights for forecasting future budgets. With a historical view of cloud expenses, teams can make data-driven decisions about scaling, resource provisioning, and budget adjustments.

• Actionable Step: Use Cloudability’s reporting tools to analyze past usage and spending patterns. Look for trends that may impact future budgets, and use these insights to refine forecasts and set realistic spending goals.

Step 4: Preparing for Continuous Optimization with IBM Turbonomic

Visibility and accountability set the stage for effective cost management, but FinOps doesn’t end there. Once the basics are in place, continuous optimization is the next step. IBM Turbonomic is a powerful tool on its own, continuously optimizing cloud resources in real time to prevent waste and maintain performance. From reducing cloud costs to improving operational efficiency, Turbonomic has helped organizations save millions of dollars and thousands of hours across industries. You can learn more about Turbonomic in our article on Application Resource Management. 

When integrated with Cloudability, IBM Turbonomic takes FinOps to a whole new level. Together, they deliver a complete solution, combining real-time operational efficiency with deep financial insights and governance. With this unified approach empowers organizations to fully maximize cloud value and make informed, cost-effective decisions across their environments.

Rightsize Instances Automatically to Prevent Overprovisioning

Overprovisioned resources are a common source of cloud waste. Turbonomic continuously analyzes resource usage and rightsizes instances automatically, adjusting them to meet actual demand without overspending.

• Actionable Step: Configure Turbonomic to monitor cloud resources in real time. Set policies that automatically resize or decommission underutilized resources, ensuring that you’re only paying for what you need.

Scale Resources Based on Real-Time Demand

Turbonomic’s performance-based scaling feature dynamically adjusts resources based on current demand. This makes sure that applications have the resources they need without unnecessary spending.

• Actionable Step: Enable dynamic scaling in Turbonomic and configure it to automatically adjust resources based on usage metrics. This not only optimizes costs but also ensures that critical applications remain responsive under high demand.

Integrate Cloudability Insights for Closed-Loop Optimization

One of the unique strengths of IBM’s solution is that Cloudability’s cost insights feed directly into Turbonomic’s optimization processes. This closed-loop system means that your organization’s real-time cost data continuously informs optimization actions.

• Actionable Step: Connect Cloudability and Turbonomic so that cost data flows effortlessly between the two tools. This integration enables Turbonomic to make optimization decisions based on actual spending patterns, creating a feedback loop for continuous cost control.

Common Challenges when Implementing FinOps 

While following a step-by-step approach is an excellent way to begin the FinOps journey, we've observed a few common challenges that can become major roadblocks for organizations along the way. Afterall, an effective FinOps strategy fundamentally changes how an organization does business. It's not just about the tools and the integrations - it's about the people. Below are the most common challenge areas:

Bridging Diverse Team Priorities 

As we've discussed, FinOps requires a cross-functional approach that brings together finance, engineering, and operations teams, each of whom has different priorities and traditional areas of focus. Finance may focus on cost control, while engineering emphasizes performance, and operations ensures system stability. Aligning these diverse objectives under a unified FinOps framework can be challenging, requiring active collaboration and open communication.

Training for Both Tools and Mindset

Adopting FinOps tools like Cloudability and Turbonomic is essential, but successful implementation also requires a shift in mindset. FinOps introduces a new way of thinking about cloud costs and accountability, and team members often need targeted training to understand both the tools and the principles of cloud financial management. Without this foundation, organizations may struggle to realize the full potential of their FinOps practices.

Creating a Cultural Shift across the Organization

At its core, FinOps is a cultural shift that impacts how an organization thinks about costs, accountability, and collaboration. For FinOps to succeed, there needs to be buy-in across all levels of the organization, with a shared commitment to transparency, teamwork, and continuous improvement. Building this cultural foundation takes time, especially for organizations accustomed to traditional cost management approaches.

Navigating FinOps With Expert Guidance 

Because implementing FinOps is a significant shift, trying to manage it internally can be overwhelming. Teams may struggle to prioritize efforts, establish best practices, or find themselves reinventing the wheel. Many organizations we've helped struggled to understand even where to start. 

If you're working through these challenges or just starting to think about how FinOps could fit into your organization, our team at C4G is here to help. We’ve supported organizations across sectors and industries, from setting strategy to implementing complex technologies. Whether you have questions about specific tools like IBM Cloudability and Turbonomic, are looking for some custom training for your organization, or simply want to learn more about FinOps, reach out to us at any time. We are happy to help. 

Moving Forward with a Solid FinOps Foundation using IBM 

In the last part of this series, we’ll look at some case studies and real-world use cases and explore how organizations have generated ROI and created value from their FinOps practices.

If you're interested in learning more about this series or exploring other FinOps insights, feel free to reach out at insights@c4genterprises.com or schedule a free consultation with the C4G Team.