Benchmarking Capability

Benchmarking is when organizations measure specific things, called unit metrics and KPIs (Key Performance Indicators), to see how well they are using their cloud resources. They compare these measurements both within their own teams and with other companies that use cloud technology in similar ways.

FinOps teams, which help manage and optimize cloud costs, work with leaders and engineers in the company to choose which metrics or KPIs will give the best insight into how the company is using the cloud. This is important because it helps them make smarter decisions about their cloud spending and usage.

Internally, companies compare these metrics between different teams or departments. This internal benchmarking helps in making decisions about how to get better value from the cloud. They set up clear goals, collect accurate data, and often use dashboards to show this information. Sometimes, they even make it a bit like a game, with rewards, to encourage teams to perform better.

Companies also compare their metrics with those of other organizations, which is called external benchmarking. This needs to be done carefully to keep sensitive pricing or usage information safe. Since many companies are not comfortable sharing detailed data, they often share information more casually through communities like the FinOps Foundation, or get general data from analysts and cloud service providers.

No two companies use the cloud in exactly the same way, so while benchmarking is useful, it’s just one tool among many that FinOps teams use to help understand and improve how the cloud is used. They constantly review these metrics and make decisions based on the best information available, instead of waiting for perfect data.