Operationalizing Your FinOps Strategy with Cloud Expense Management Solutions   


Cloud technologies are critical to every business for scalability, agility, efficiency, and cost savings, but the latter two are not a guarantee. The reality is that 80% of companies struggle to see cost savings with their cloud implementations and 70% of IT and financial decision-makers say it’s hard to account for cloud usage and spend. Yet spend companies will: 86% plan to invest more in Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS), and Unified Communications-as-a- Service (UCaaS) despite the eclipsing challenges of overspending, shadow IT, and cloud waste.

The cloud is a fundamentally different consumption model that requires a fundamentally different cost management strategy – namely, FinOps – to fully deliver business benefits.

FinOps is the new methodology for addressing today’s cloud cost realities. The operational framework standardizes cost optimization for IaaS, SaaS, and UCaaS, empowering stakeholder teams to confidently manage cloud costs and generate ROI without wasting resources or adding unnecessary complexity.

Now for the million-dollar question: how do you activate a sustainable FinOps plan? Determining the right path for your organization ensures success at the onset, and technology is the ultimate consideration. A Cloud Expense Management (CEM) solution is the smartest choice. This guide explains why cloud expense management solutions have become the standard technology platform for controlling costs using a FinOps approach. Plus, you’ll learn four competitive capabilities that act as a force multiplier.

FinOps can reduce cloud costs by as much as 40% when implemented effectively.

Why Use a Cloud Expense Management Solution for FinOps?

The FinOps Framework provides a high-level overview of what functional activities are needed to run a FinOps practice via its six Domains and capabilities. Accountability and enablement, measurement and realization, cost optimization, planning and forecasting, and tools and accelerators are at the core of these focus areas.

The 6 FinOps Domains

The six FinOps Domains outline the capabilities an organization must perform to effectively practice FinOps. Each Domain defines a different “sphere” or territory of activity or knowledge, including functional activities to be performed as part of that Domain. For example, the first FinOps Domain – Understanding Cloud Usage and Cost – includes the following capabilities: measuring unit costs, managing shared cost, managing anomalies, and forecasting, among others.

CEM solutions are the machine behind FinOps, designed specifically to activate the FinOps Framework step by step, domain by domain, and automate it phase by phase for all stakeholder teams. A staggering 98% of organizations surveyed by CIO.com said they want cloud management in one platform for SaaS, IaaS, and UCaaS for this reason. By nature, every FinOps solution should create a single-pane view of cloud service usage and cloud financial information across as many providers and software applications as possible.

Here’s what a CEM solution brings to the table:

  • SaaS Optimization: From Shadow IT discovery to licensing, payment, and contract renewals, your applications are easily managed across your enterprise with AI-powered tools and analytics that help identify unused resources, reduce duplicate apps, and maximize value.
  • IaaS Optimization: Track, analyze, and optimize cloud infrastructure services in one easy-to-navigate platform that works across major cloud providers. With multi-cloud optimization, you’ll see where you’re overspending and get tangible recommendations to cut costs and make more efficient use of your cloud infrastructure.
  • UCaaS Optimization: Gain the visibility and insight you need to maximize your cloud communications investments and contact center operations with granular call detail records. Keep your organization connected and collaborative while driving fiscal responsibility, operational efficiency, compliance, and cost savings.
  • Streamlined Financial Management: From keeping an eye on cloud contract renewals to simplifying cost allocations, invoice management, and bill pay, CEM solutions are designed to serve IT and finance leaders while also fostering collaboration and cross-functional accountability.
FinOps Foundation

Tangoe is a Premier member of the FinOps Foundation, a validation of our cloud expense management excellence for enterprises of all sizes.

6 Ways CEM Solutions Champion FinOps Cloud Governance

The results of an organization implementing the six FinOps Domains are ultimately determined by the solution and technology platform you use – not all platforms are built the same. While a platform with comparatively limited capabilities fails to fully execute on FinOps, the right CEM solution leaves no stone unturned, fully aligning with FinOps to boost savings. While the average FinOps cost savings is 20-30%, Tangoe finds that its CEM solution can save clients up to 40%.

Here’s how an effective CEM solution operationalizes FinOps through the six FinOps Domains.

FinOps Domain 1:

Unlock Deep Insights into Cloud Usage and Cost

The first and arguably most important step for operationalizing FinOps involves gathering information that helps you understand how much you’re spending on cloud services and how effectively you’re using those assets.

A CEM solution deeply integrates with IaaS, SaaS, and UCaaS services to uncover current cloud usage and cost, including historical trends, at a level of granularity that sets the stage for Domain 2 — mapping cost to budgets, using historical information to establish benchmarking, investigate any cost overruns, and forecast needs.

CEM solutions are designed for:

  • Multi-Cloud IaaS Data Ingestion:
    CEM solutions are integrated with cloud service providers and their IaaS platforms, helping you normalize data from disparate providers for apples-to-apples comparisons, discover unused and misused IaaS resources, get tagging guidance, compare your existing configurations against the most cost-effective configurations, and know when to use service pausing features, discounts, and more.
  • AI-Based Analysis & Recommendations:
    Humans with spreadsheets are no longer the right tool to evaluate complex cloud data feeds. CEM solutions are frontloaded with AI-driven analytics and automation to help you gather vast information, evaluate usage patterns, flag anomalies, and bring forward ideas and suggestions to optimize costs and resources. Moreover, solutions should help you prioritize the list of optimizations based on which changes offer the biggest payout.
  • Multi-Source Shadow IT Discovery:
    CEM solutions have multiple ways to find out which applications are running inside your corporate network and how each employee is using each tool. This helps you recognize redundant SaaS applications, pinpoint unused and underutilized licenses, and get the insights you need to boost security and mitigate risk.
  • Connecting the Dots between Usage and Spend:
    CEM solutions connect all service usage data, pricing information, and associated financial data (like budgets, invoices, and contracts) in one platform that serves as a single source of cloud truth for IT operational management and financial management.
  • Cost Allocations and Chargebacks:
    CEM solutions apply the client’s personalized chargeback and financial business rules to the daily ingested data to accurately allocate costs.

Gartner expects the number of employees using unsanctioned apps to increase from 41% in 2022 to 75% by 2027. CEM solutions help IT and finance teams nip this in the bud with purpose-built discovery tools that uncover all the SaaS apps their company uses, reinforcing security and regulatory/industry compliance.

FinOps Domain 2:

Know Where Your Money Goes and How it Flows, Performing against Your Budget

FinOps isn’t about one-time cost reductions; the framework establishes a continuous cycle of monitoring, analyzing, and refining cloud usage and spend to ensure continuous ROI, even (and especially) as your requirements shift over time. An effective CEM solution allows you to track and trace exactly where your spending goes in real-time to understand at granular levels who benefits from expenditures and how, who is responsible for expenditures, and how and why spending aligns or misaligns with financials budgets and forecasts.

Notable CEM features include:
  • Real-time monitoring capabilities keep watch over service utilization, making it easy to track, observe, and evaluate IaaS usage patterns, storage or server waste, pricing trends, and any sudden spikes in cost and the reasons behind them.
  • Real-time reports that summarize current and previous purchases, set baselines, reveal spending trends, and track budget performance for each department, project, or stakeholder.
  • When CEM solutions are integrated with corporate financial systems, customizable cost allocations can be based on IaaS tags, projects, and instances. More importantly, the solution can generate a General Ledger file to sync with any existing financial system so cloud services and FinOps governance works in compliance with corporate fiscal management processes.

FinOps Domain 3:

Improve Stakeholder Enablement with Real-Time Decision Making

FinOps is a team sport; no one should be sitting on the bench. This means establishing a decision and accountability structure in which every business line manager has timely access to cost and usage data for real-time decision-making in alignment with financial goals and objectives.

A CEM solution makes everyone in your organization a superhero with right-time, right-person data, viewable in a simple format that makes complex cloud data easy to understand. This brings the level of organizational transparency, accountability, and visibility required for building a FinOps culture of trust and collaboration.

CEM solutions help:
  • Build custom reports for different teams and departments, offering sweeping insights for executives but also granular details for each team or project that show how cloud services are used (or misused) and where costs get assigned to each cost center.
  • Find out which software applications are centrally managed by the business, managed by a specific team, unmanaged, or restricted by security or corporate policy.
  • Set thresholds that instantly alert teams to new purchases or sudden cost increases. For example, sending an automatic alert of a detected anomaly so application and services owners can implement preventative measures in the moment when it matters most.
  • Refresh evaluations daily, ingesting data at high frequencies for the most up-to-date information and optimization efforts.

FinOps Domain 4:

Optimizing Cloud Contracts and Service Rates

This is where the rubber meets the road. How can you strategically leverage discounts and use economies of scale to change the rate you’re paying and alter what you’re buying to achieve better price performance or higher cloud ROI?

CEM solutions leverage AI and hyper automation to make sure you’re taking advantage of discounts, securing better rates, and paying only for the features you really need.

These features include:
  • SaaS Rate Optimization: Get the insights you need about your apps, users, and usage to make data-driven decisions around license rightsizing without impacting users and their productivity.
  • Know how SaaS Services are paid for: Know which SaaS services are paid for by the corporation versus personal credit cards, or purchased outside of corporate contracts, and flag which subscriptions are set to auto-renew.
  • Reduce Duplicate SaaS tools: See which applications have similar capabilities and could be consolidated. Get recommendations on the most cost-effective alternative apps and vendors that you may not have been considering in your renewal.
  • IaaS Rate Optimization: See the most cost-effective configurations that will meet your needs, and know when to use long-term discounts to lower your rates.
  • Procurement and Contract Renewals: Set up automatic alerts that proactively inform you of contract renewals before they hit their deadline.
  • Scenario Testing: CEM solutions have the ability to play out theoretical scenarios that reveal the cost savings potential of making specific changes to your service or IaaS configurations.

FinOps Domain 5:

Optimizing Cloud Service Usage and Resource Management

To make FinOps work, you need to be able to act on cost savings recommendations. This means matching your cloud services to actual business needs as closely as possible and at any given time.

A CEM solution pulls back the veil on where needs and services are mismatched so you can start scaling or rightsizing across IaaS, SaaS, and UCaaS, ensuring you get the most value from your digital innovation investments.

These capabilities are critical in helping you take action on FinOps insights:
  • Actionable Recommendations: Tangible guidance should pinpoint unused and underused resources, provide tagging guidance, and inform you when to use service pausing features and alternate SaaS providers.
  • Automated Implementation: Using AI-based automation and tight integration, CEM solutions can act on their own recommendations with just the click of a button. Once a recommendation is approved, the system can make changes to your IaaS configurations, accelerating your time to savings. This advanced capability is explained further in this guide.
  • Automated SaaS License Management: Automated workflows intelligently streamline the tasks needed to manage license assignments and reallocations. This is particularly helpful during employee on- and off-boarding, ensuring licenses don’t go to waste.
  • Proactive vs. Reactive: Governance features analyzing variances in budget-to-actual costs and customized alerts can be helpful in getting ahead of cost optimization, rather than only reacting to events and invoices after the fact.
  • Customizable Dashboards: Tailor-made reports and custom data cuts can move cost optimization efforts beyond out-of-the-box recommendations, helping teams customize solutions to their unique cloud environments, business needs, and financial management rules.
  • Managed Services: Pre-built software is helpful in analyzing data, but the expertise of expense management professionals is critical for taking action and elevating cost optimization efforts.

It's estimated that 50%+ of IT expenses go to Shadow IT, 29% of app licenses go unused, and companies typically have 10-20 times more apps in use than originally approved by IT.

FinOps Domain 6:

Organizational Alignment that Fosters a FinOps Culture

FinOps isn’t just a practice, it’s an organizational culture. How will your IT and finance teams work synergistically to operationalize FinOps?

A CEM solution satisfies the vast needs of IT and finance across the areas of cost optimization and expense management in one comprehensive system. It’s a central control center that harmonizes events across the entire cloud cost management ecosystem (see image).

As a central control center, CEM solutions:
  • Address the broader cloud estate with IaaS, SaaS, and UCaaS cost optimization in one platform.
  • Manage cloud resource utilization and cloud finances together as one coordinated effort for all stakeholders. Beyond just cost cutting, a CEM solution offers ways to streamline financial management by comparing actual costs to budget expectations, comparing invoices to contracts, handling invoices, payments, and contracts, and assisting with accurate cost allocations.
  • Hyper-automate an expansive array of workflows that IT, finance, and procurement teams need to drive financial management efficiency and cost savings simultaneously.

Force Multipliers:
4 Reasons Tangoe Skyrockets FinOps Success

When it comes to FinOps and CEM solutions, Tangoe has set the bar and continues to raise it. We pioneered technology expense management more than 20 years ago. Today, our deep expertise is powered by an automated technology platform layered with AI for the smartest approach to cloud cost control. When you’re ready to put FinOps strategies into action, the Tangoe One Cloud solution saves companies up to 40% on their cloud costs.

Here are four force multipliers you get when you partner with Tangoe to activate your FinOps strategy:

1. The Widest Cloud Visibility
Tangoe offers the industry’s most extensive array of pre-built API integrations, fostering a vast ecosystem of partners that facilitate broader data ingestion for a clearer perspective on software and infrastructure services.

  • Multi-cloud IaaS solution supports four major cloud service providers
  • Direct SaaS integrations with 550+ apps and support for +225K other apps
  • Shadow IT discovery includes a five step process for multi-source data gathering
  • No one comes close to Tangoe’s deep user analytics for Microsoft 365®

2. Smartest AI Platform Powering FinOps

AI automation and patented capabilities expedite cloud financial management workflows to yield quicker insights and faster savings.

  • Advanced analytics pinpoint waste and leverage +1M IaaS pricing schemas to deliver cost-savings recommendations
  • 13 AI patented tools determine your most cost-effective cloud consumption models while 50+ other patented capabilities speed expense management
  • Automated implementation features act on cost savings recommendations in near real- time for faster results
  • No-code automation offers 1,000 actions to streamline SaaS license management
  • Hyper-automation spans an array of workflows for IT, finance, and procurement teams

3. Broadest Choice and Flexibility in Cloud Cost Management

More than just cost-cutting, you can streamline cloud financial management with one centralized solution serving both IT and finance.

  • One platform optimizes your IaaS, SaaS, and UCaaS resources
  • Customizable solutions are tailored to meet the diverse needs of both IT and finance teams
  • Professional services, managed services, and technology consultants deliver broad flexibility in solution management and support

4. Savings that Go beyond the Cloud

When you’re ready to simplify, manage, and optimize more than just your cloud estate, Tangoe seamlessly scales cost optimization for your mobile devices and telecom services, taking your savings further.

This helps explain why Tangoe clients are 62% more likely to report that their cloud deployments delivered benefits to a “great extent,” compared to 41% of others.


The adoption of FinOps is crucial for organizations looking to harness the full potential of cloud technologies while effectively managing costs, and the key to activating a sustainable FinOps plan lies in advanced technologies found in cloud expense management solutions.

With the potential to reduce cloud costs by up to 40%, these platforms have become the preferred choice for organizations seeking to maintain control over their cloud expenditures while achieving sustainable growth. As every cloud estate continues to grow and evolve, organizations that embrace FinOps and leverage CEM solutions will be best positioned to thrive, realizing the true benefits of cloud innovation without the burden of excessive costs.

Ready to put your FinOps plan into action?

Contact Tangoe today for a FinOps solution demonstration and ask about getting a proof of concept.