FinOps Maturity Model: 3 Essential Stages Explained

Understanding the FinOps Maturity Model

FinOps maturity model showing the Crawl, Walk and Run stages of cloud financial management

The FinOps maturity model helps organisations assess how effectively they manage cloud costs, align finance and engineering teams, and improve the business value of their cloud investment.

Cloud cost management has become increasingly important when running a business. Understanding how much your business is spending on the cloud is not enough, you need to understand where this money is going, what factors are driving the costs, and if you are actually getting any value out of them. This is where the FinOps maturity model comes in.

It was developed and maintained by the FinOps Foundation and enables organisations to understand how mature their cloud financial management is, and what they can improve. There are 3 levels, these are Crawl, Walk and Run. Being aware of where you are within each capability will help you understand how mature you are.

According to the State of FinOps survey 2024, 72% of organisations are still in Crawl or Walk stages.

The model is not intended to be a strict checklist. Different capabilities will grow at different times. For example, you may have a strong tagging framework but be struggling to forecast accurately.

The 3 Stages of the FinOps Maturity Model

There are 3 levels to the maturity model.

Crawl

This stage will be where you are starting off. You will have some visibility into your costs but much of the information will be manual. Cost reports will likely be looked at after an unexpected spike in costs. The cost allocation will be manually tracked. Optimisation will also likely be done when issues arise.

Overall this stage will focus on improving your understanding of your costs.

Walk

This will give you a more structured approach to cloud financial management. You will have some standardised tagging, reports will be automated and you will be regularly reviewing costs.Engineering teams will also be thinking more about the costs in their decisions. You will be forecasting but accuracy may not be great. You will have a less reactive approach to costs. You will have started to put structures in place.

Run

This will give you a more mature FinOps approach. Costs will be embedded into the culture. You will be using automation to carry out routine optimisation. Forecasting will be more accurate and aim to have a variance of 5-10%. Decisions will take into account unit economics and cloud cost efficiency. Your cloud costs will be more aligned with engineering.

Why is Cloud FinOps Important?

FinOps is a culture that helps organisations get the most value out of their cloud investment. By working with engineering, finance and business teams, decisions about cloud usage can be made with a clear understanding of the impact. If you are not working collaboratively between teams, different teams may have different aims. Engineering will be focused on performance and speed of development, whereas finance will be focused on budgets. FinOps will help align these priorities.

By having standardised approaches, teams can understand where they are using their cloud. This enables them to be more proactive with their decisions based on the data. They can also identify any potential issues. FinOps can help organisations focus their spend on more valuable activities. By optimising the cloud, savings can be made and used for AI, modernisation and other strategic projects. Having a better understanding of your costs will also help with future planning.

Cloud FinOps is very relevant at the moment as organisations are increasingly under pressure to reduce their IT spend. One third of IT decision makers admit to wasting 50% or more of their cloud spend.

Cloud Cost Management vs FinOps

While these are similar, they are not the same.

Cloud cost management focuses on keeping your costs low. Understanding your costs and identifying any unnecessary spend. FinOps looks at a broader approach. It brings all teams together (engineering, finance and business) to help make informed decisions. It considers how your cloud costs can help meet your business objectives.

Optimising costs is a result of having a mature FinOps approach.

Savings may seem like a good idea however cutting back on resources can impact performance and slow down development. FinOps encourages you to think about how to keep your costs efficient while also meeting your business needs.

A structured FinOps approach can also support cost optimisation for Indian SMEs by improving spending visibility, accountability and resource efficiency.

How your FinOps maturity develops

FinOps maturity isn’t about adding more dashboards and reports. Each capability will build upon what has been done in other areas. Having good tagging will help with cost allocation. When you have a clear understanding of where your costs are going, you’ll have more accountability. This will help improve forecasting and optimisation.

By having reliable links between cloud costs and workloads, applications, products, customers or transactions, you can start to understand unit economics. This helps you understand how you’re spending your money and how it relates to the value you’re getting.

As your capabilities improve, the questions you ask will change. Initially you may just want to know how much you’ve spent and who/what is contributing. As your maturity improves you can start to ask questions like why have my costs changed? What should I expect to spend in the future? And have my cloud investments provided any value to the business?

This is where FinOps really makes a difference. Moving from just explaining your cloud costs to making better decisions around your usage.

Understanding your FinOps maturity

Understanding where you are with each capability will help you improve. Instead of looking at your overall maturity score, look at the strengths and areas to improve within each process.

For example, you may have good visibility into your costs but still rely heavily on historical data when forecasting. Or you may not have clear owners meaning nothing can be done to reduce unnecessary spend. Or you may have reactive governance.

As your capabilities improve, you’ll be able to link your cloud usage more clearly to the value you’re providing.

These questions will help you to identify where you can improve your maturity to have the biggest impact. It will also give you a clear picture of how finance and engineering can work together to improve accountability and financial decisions.

Conclusion

The FinOps maturity model gives organisations a practical way to understand where they are with their cloud financial management capabilities and identify areas to improve. The model has 3 stages (Crawl, Walk and Run) to help you understand how you can move from having basic visibility to having a more structured, automated and valuable approach.

Remember, you won’t suddenly become mature and not every capability will improve at the same rate. Focus on understanding where you are, and improving the areas that need attention. Overall FinOps is not about getting to the end or cutting down on every cost. It is about having a clearer understanding of your cloud costs, having owners, bringing finance and engineering closer together and making informed decisions as your business and technology evolve.

FinOps Maturity Model: Where Does Your Company Stand?