Few organizations remain today without some of their business operating in the cloud. According to a study from 451 Research, part of S&P Global Market Intelligence, 96 percent reported enterprises using or planning to use at least two cloud application providers (Software-as-a-Service), with 45 percent using cloud applications from five or more providers. In 2024, global spending on public cloud services is expected to reach $679 billion, surpassing $1 trillion by 2027. With AWS leading the market share among cloud providers, it is often the first place enterprises look when scaling workloads.

Most companies move to the cloud to take advantage of cloud computing solutions’ speed, innovation, and flexibility. Cloud operations can also provide cost savings and improved productivity. 

However, controlling cloud costs has become increasingly difficult and complex as cloud adoption grows. That is why cloud cost management has become a priority for CIOs to understand the true ROI for cloud operations. 

When cloud assets are fragmented across multiple teams, vendors, and containerized environments like AWS, Azure, and Google Cloud, it is easy to lose sight of the budget. As a result, cloud financial management is a must-have for understanding cloud cost and usage data and making more informed cloud-related decisions. 

Plus, it’s an opportunity for more savings! According to McKinsey, businesses using CFM can reduce their cloud costs by 20% to 30%.

But what exactly is Cloud Financial Management (CFM)? Is it merely about cutting costs? What kind of tools are best for multiple cloud environments? If you have these and other questions, we have the answers. Let’s jump in!

 

Table of Contents:

 

What is Cloud Financial Management(CFM)?

Cloud Financial Management is a system that enables companies to identify, measure, monitor, and optimize finances to maximize return on their cloud computing investments. 

CFM also enhances staff productivity, workflow efficiency, and other aspects of cloud management. However, it is important to remember that while cost is a major focus, it’s not the only one. 

A subset of CFM is FinOps, which is essentially a combination of Finance and DevOps. The idea behind FinOps is to foster collaboration and communication between the engineering and business teams to align the cost and budget to their technical, business, and financial goals.  

Cloud Financial Management Benefits 

Better Track Cloud Spend

 Cloud Financial Management helps companies oversee operations, tasks, and resources that drive usage billing. This insight can be used to identify projects, apps, or teams that are driving your cloud costs, whether on AWS or other cloud providers.

Real-world example: One of the biggest questions finance teams ask is “How do we track cost per customer or feature?” Without CFM, the data is often siloed, and engineering teams can’t answer where specific usage spikes are coming from. By mapping spend to business units or customer segments, companies get the clarity they need to measure ROI accurately.

Optimize Cloud Costs

With visibility into cloud resources and spend, your organization can identify and remove unutilized resources, redundant integrations, and wasteful processes.

Real-world example: Many companies discover entire clusters or instances running idle in AWS because no one shut them down after testing. Eliminating these “zombie resources” can cut thousands off the monthly bill.

Financial Accountability  

Instead of reacting to unexpected cost spend and spikes, cloud financial management allows businesses to plan and predict budgets by making delivery teams financially accountable. By aligning cloud financial data to business metrics, organizations can establish common goals and outcomes. 

Operational best practice: Mature FinOps teams often track unit economics, such as cost per transaction or cost per API call. This helps product owners understand whether revenue is actually outpacing cloud spend.

Cloud Financial Management Challenges

Companies that lack full visibility into cloud spend find it difficult to identify where there are inefficiencies, waste, or overuse of resources. The result is that decisions can’t be made regarding the efficient allocation of resources, and companies are in the dark regarding questions such as whether an increase in spend results from business growth or from sheer inefficiencies.

Best practices and actions:

  • Monitor key cost factors like storage growth, compute hours, and data transfer in AWS to spot the drivers behind spend spikes.

  • Set budget alerts at both the account and service level so finance teams are notified before monthly bills climb out of range.

  • Review anomalies weekly with engineering and finance stakeholders to separate valid business demand from inefficiencies.

  • Automate idle resource detection so unused instances, databases, or containers are flagged before they pile up costs.

Budgeting

Migrating from on-premise to the cloud often means transitioning from a CapEx to an OpEx model. On the surface, switching to a predictable OpEx-based strategy seems attractive. However, the change can create more issues than it solves. 

Real-world challenge: Why Cloud Costs Spiral Without Visibility often comes down to teams overprovisioning resources in AWS or leaving test environments running without oversight.

Visibility Into Cloud Assets and Usage

Monitoring cloud assets makes or breaks FinOps. But employees often find it challenging to track asset performance, resource needs, and storage requirements. Tagging offers a simple solution, allowing easy categorization of cloud assets by department, performance, usage, costs, and more, particularly in AWS, where tagging can be automated at scale.

Even when you look at the infrastructure, there are numerous departments in an organization, and there are different purposes for them to use the cloud. So, unless and until there is a proper tagging system for these departments, operations, and costs, it is very difficult to monitor cloud assets. 

Real-world example: Finance leaders often ask, “What Causes Unexpected Cloud Bills?” Without proper tagging and reporting, there’s no quick way to identify the source of a spike.

Calculating Unit Costs

The unit cost calculation becomes a tedious job, considering the complexity of the cloud infrastructure and the sheer number of assets. In addition, calculating and comparing the investment and the revenue being generated becomes difficult when there are so many multiple interdependencies. 

Operational best practice: Mature CFM teams benchmark against Top FinOps Metrics for Finance and Engineering Teams, such as cost per transaction, cost per user, or cost per API call.

Identifying Inefficiencies

Companies that lack full visibility into cloud spend find it difficult to identify where there are inefficiencies, waste, or overuse of resources. The result is that decisions can’t be made regarding the efficient allocation of resources, and companies are in the dark regarding questions such as whether an increase in spend results from business growth or from sheer inefficiencies.

Best practice: Regular anomaly detection combined with budget alerts helps separate real business demand from waste. Engineering and finance teams should review anomalies weekly to determine whether spikes are legitimate.

Building a Cloud Center of Excellence

A Cloud Center of Excellence (CCoE), or FinOps practice, is an important next step for companies using ad hoc methods for cloud cost management. A CCoE provides a roadmap to execute the organization’s cloud strategy and governs cloud adoption across the enterprise. It is meant to establish repeatable standards and processes for all organizational stakeholders to follow in a cloud-first approach.

The CCoE has three core pillars:

  1. Governance – The team creates policies with cross-functional business units and selects governance tools for financial and risk management.
  2. Brokerage – Members of the CCoE help users select cloud providers and architect the cloud solution, often beginning with AWS.
  3. Community – It’s the responsibility of the CCoE to improve cloud knowledge in the organization and establish best practices through a knowledge base.

With those pillars as a foundation, CCoEs are generally responsible for the following activities:

  1. Optimizing cloud costs – Managing and optimizing cloud spend is a key task of the CCoE. They are also accountable for tying the strategic goals of the company with the cost of delivery value in the cloud.
  2. Managing cloud transformation – In the initial phase of transformation, the CCoE should assess cloud readiness and be responsible for identifying cloud providers. During migration, the team should provide guidance and accurate reports on progress.
  3. Enforce cloud policies – Security and regulatory requirements can change frequently in complex and changing cloud ecosystems. It’s important that CCoE members enforce security standards and provide operational support across the business.

Umbrella for Cloud Financial Management 

Umbrella’s Cloud Cost Management solution helps organizations get a handle on their true cloud costs by focusing on FinOps to drive better revenue and profitability.

Best actions with Umbrella:

  • Tie cloud spend to business outcomes. Umbrella tracks metrics like cost per feature or per customer so leaders see whether increased spend is driving revenue growth.

  • Leverage anomaly detection. Umbrella automatically flags outliers so teams can investigate before the AWS invoice arrives.

  • Adopt multi-cloud visibility. Umbrella consolidates AWS, Azure, and GCP costs in one dashboard to eliminate blind spots and silos.

  • Build accountability into workflows. Umbrella’s reporting makes it easier to align finance and engineering teams around shared KPIs like unit cost or ROI.

From a single platform, Umbrella provides complete, end-to-end visibility into your entire cloud infrastructure across AWS, Azure, Google Cloud, and Kubernetes. By tracking cloud metrics alongside revenue and business metrics, Umbrella helps cloud teams grasp the actual cost of their resources.

Best practice in action: Umbrella supports Best Practices for CFM in Multi-Cloud Environments by unifying AWS, Azure, and GCP costs into one central dashboard. This prevents teams from wasting time reconciling multiple bills and improves decision-making speed.

How Umbrella supports best practices in FinOps operations:

  • Forecasting and budgeting with 98.5% accuracy. Using historical data and growth trends, Umbrella predicts future AWS and multi-cloud spend so teams can set realistic budgets and avoid bill shock.

  • Multi-cloud cost visibility. Customizable dashboards and cost tagging unify AWS, Azure, and GCP costs, making it easier to see who owns what and tie spend back to customers or features.

  • Real-time cost monitoring and alerts. Instead of discovering problems after the invoice arrives, Umbrella provides anomaly detection and targeted notifications so engineers can take immediate action.

  • Automated savings recommendations. Umbrella surfaces more than 80 cloud cost optimization actions, helping companies reduce annual spend by up to 40% without manual auditing.

  • Unit economics and accountability. Umbrella enables teams to track metrics like cost per API call, cost per transaction, or cost per customer, ensuring engineering and finance speak the same language.

  • AI-powered CostGPT. Teams can ask questions in plain language — e.g., “What caused my AWS bill to spike this week?” — and get instant, actionable answers.

  • Savings tracking. Automated reports show how much has actually been saved from implemented recommendations, closing the loop on optimization efforts.