OPM part of pilot to bring FinOps to federal government

“We formed a special interest group, which is a bunch of government agencies, and we're all coming together trying to figure out what does FinOps look like in...

The Office of Personnel Management is still early in its cloud journey with about 10% of all workloads off premise. But that isn’t stopping senior IT leaders from setting the foundation to measure, monitor and govern its future state where cloud is the norm, not the exception.

OPM is one four agencies taking part in a pilot to adopt FinOps, a cloud financial management discipline and practice. OPM joined with the General Services Administration and the departments of Energy and Veterans Affairs to test out a FinOps playbook developed by public and private sector experts earlier this summer.

“We formed a special interest group, which is a bunch of government agencies, and we’re all coming together trying to figure out what does FinOps look like in the federal government compared to what it is an industry,” said Melvin Brown, the deputy chief information officer for the Office of Personnel Management, on the discussion Managing cloud services, measuring their value. “What the pilot is doing right now is taking the actual playbook and we’re actually living it out. Here at OPM, we were already ahead in that journey. So a lot of what you’ve seen in the playbook was work that we had previously done. But now we are starting to look at what are the differences? Where are they? Where are the anomalies, and we’re running into challenges around acquisition and forecasting, and specifically acquisition around how do we do reserve instances? How do we buy reserve instances? What does procuring cloud look like in this new cloud environment?”

Brown said the challenges agencies face compared to private sector companies add more complexity to how they manage and measure cloud services.

The challenge of buying cloud

One of the biggest differences is in how industry can procure reserve instances of cloud on a quarterly basis. The government doesn’t have the same budgetary or acquisition flexibility in many cases.

“How do we start to work now with our procurement shops and our acquisition partners on the strategies that we can use that are consistent with the Federal Acquisition Regulations to help us to buy cloud now in a way that is beneficial and where we can get the full benefit of all the discounts,” Brown said. “Those are the things that we as a working group are starting to get our head around. Now that we’ve gone down this journey, how do we maximize that? What does that look like for us in the federal space? And then what policies or processes do we need to change or modify in order to achieve the real benefits of cloud?”

The working group’s short term goal is to come up with revisions to the playbook and additional best practices to help agencies buy cloud more easily and efficiently.

Brown said OPM, like many agencies, face the never-ending challenge of budgeting for cloud services because of the unknown potential or real costs that may come up in a month or six months.

“I have a fuzzy napkin, if you will, to say I have an estimate of what I think that cost is going to be. But for my new cloud applications, it’s like asking me to move into an apartment and asking me what my utility bill is going to be the next year, I can give you what I think, but I really won’t know until I get some more data about where we are finding benefit of taking our on-premise system and moving it to the cloud,” he said. “We can at least forecast what the previous spin was and then make optimizing below that our goal. That’s typically the approach that we’re taking right now from a forecasting perspective.”

Seeing the benefits already of cloud

Brown said OPM hopes to mature its understanding of measuring the cost of cloud services by 2025, which is the same timeline it hopes to move a majority of systems into the cloud.

Even with a low number of applications in the cloud today, Brown said OPM already is improving its processes and understandings of cost and value.

For example with the retirement services call center which OPM moved to the cloud in the last year, Brown said it already is comparing prior year costs to what they are paying today.

“What we are gaining is flexibility in our ability to scale the requirements or the retirement services call center in a way that we hadn’t been able to do before. So now we can increase the amount of bandwidth, increase the amount of licenses as we add agents to the call center,” he said. “We’ve also implemented agile processes, which is still relatively new to OPM. In January, we began implementing what we call the Scaled Agile Framework (SAFe) framework as our agile framework. Within the first eight months, we’ve been able to have better insight into our capacity and velocity so that we can migrate systems and build new capabilities.”

OPM has used that approach to move its Freedom of Information Act (FOIA) management system and is in the middle of moving its cost accounting system to cloud instances.

More accurate view of IT costs

Brown said his office also is developing metrics and key performance indicators to specifically address cost and benefits OPM realized by moving workloads to the cloud.

“We have been using the Technology Business Management (TBM) framework, and what TBM has allowed us to do is to define our tools, processes data and the people that we need to manage these business systems,” he said. “TBM has given us an historical look. Because we’re not able to optimize real time, TBM has given us the ability to look backwards and figure out what it really is costing me to run this application. We have married that with FinOps.”

Brown said combining TBM data with the FinOps framework, OPM can improve how they track cloud spending more accurately.

“For the first time, we’ve got accurate data from our cloud, and combining that with TBM, we can actually have a higher level of confidence that we are improving our financial planning in the future as it relates to our cloud spending,” he said. “We’re running around like parents telling people to turn things off. Do you really need that on? Should that server really be on? Do we need to run those virtual machines on the weekend? Are we turning off those tests environment? We’re starting to do that and that’s allowing us to show the value of what it means to be in the cloud and how we can, in real time, optimize the cost of moving our on-premise systems to the cloud.”

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