Process optimization: a given in every industry, except for IT? Why FinOps should be just as evident

The simple answer: because we haven’t embedded FinOps the same way we focus on optimizing traditional business processes.

In this blog I use three metaphors to show why FinOps has the exact same aim, and how to put it into practice.

Production process -> workload optimization

A manufacturer continuously asks itself:

• Can we use cheaper raw materials without sacrificing quality?
• Does it pay to invest in new machines that increase capacity and yield?
• Can we prevent process errors and production outages?
• Is market demand predictable so we can benefit from discounted bulk orders?

Compared with IT and FinOps:

• Raw materials = compute, storage, licenses, databases, data platforms. Can we use cheaper compute or more flexible storage tiers without impacting performance?
• New machine = investing in modernization (containerization, serverless, refactoring) that lowers operating costs and accelerates time‑to‑market.
• Process error = automation, better observability and guardrails that prevent human mistakes and unnecessary consumption.
• Bulk orders = committed discounts, such as Reserved Instances and Savings Plans, where you receive a discount in exchange for a guaranteed level of consumption.

Production managers invest when the ROI is clear: a lower unit cost, higher reliability and shorter lead time. FinOps provides exactly the financial calculation tools for IT: cost per workload (e.g. an application), cost per user, forecasted ROI of modernization. With the same business language (cost per unit, return on investment) IT investments become as steerable as a new machine.

Cost optimization needs little explanation. achieving the same result at lower cost is a no‑brainer everywhere.

Logistics process -> network and resource utilization

In warehouses you optimize pick routes, packaging material use and return flows (RMA):

• Can we process more orders by improving pick routes efficiency?
• Is the warehouse layout optimized for fast‑moving vs. slow‑moving items?
• Can we use less cardboard to cut costs and operate more sustainably?
• How can we automate returns handling as much as possible?

Compared with IT and FinOps:

• Pick routes = Azure regions and your networking setup. Deploy resources in the region where they are accessed and avoid unnecessary public internet egress and cross‑region traffic.
• Warehouse layout = frequently requested items are placed close to packing/shipping locations, just as frequently accessed files are stored on premium storage.
• Less packaging material = instance utilization. If an instance, for example a virtual server or database. has a consistently low load, you’ve chosen too big a “box.” That is waste in money and CO2 emissions; a smaller instance or a different storage tier would have been more appropriate.
• Return flow = support ticket. Applying AI to support tickets can resolve many incoming questions without human intervention. Similarly, returned products can be visually inspected with cognitive AI services.

For management: logistic improvements lower your direct costs and increase customer satisfaction. The same benefits are achievable in IT. Smarter network design prevents data traffic costs, hosting applications on the right VM (packing them in the best fitting cardboard box) avoids unnecessary expense.

And IT infrastructure has an advantage over a physical warehouse: it can automatically scale up and down and change size based on actual demand. Something a physical warehouse cannot do.

Sales & financial KPIs -> Unit Economics

Business and finance define KPIs to monitor results and steer operations:

• Which products or services are or aren't profitable?
• What is the (average) customer lifetime value?
• What is the average lead time from procurement to sale to payment?
• What are the costs of onboarding a new customer?

Compared with IT and FinOps:

• What does a feature or module cost to develop and deliver, and how much subscription revenue does it generate?
• What is the cost of a transaction in your e‑commerce environment, and what is the average revenue per transaction?

Why this resonates with management: with Unit Economics you link IT cost to business revenue and get insight into KPIs that matter to Business and Finance. It makes things like “cost per unit” visible and actionable. Business and finance are used to steering on KPIs: they can easily compare cost per unit (e.g. cost per transaction, cost per active user per day) with revenue and margin. With rightsizing or committed discounts you can directly reduce cost per unit. With optimization you lower cost per unit by improving the process.

Call to action for management

If processes across your organization are being optimized, why should IT be the exception? FinOps aligns IT, business and finance and provides the insights needed to make business decisions: reduce cost, optimize or invest. Start small: make cost data transparent and identify your biggest cost drivers. Determine which insights are missing to enable targeted cost‑and‑budget steering. Appoint an owner for this problem and work out an improvement plan that will deliver tangible results within weeks, both financially and strategically.

Would you like to move quickly? Book a FinOps Starter workshop (60–90 minutes). During this workshop we help you draft a plan that reveals how FinOps can have immediate and positive impact.

All the best,

Rick van den Hoogenhof
Hippo B.V.