How to use Leaderboards to incentivize cloud cost usage optimization?
Using gamification and incentives to create a culture of distributed cloud cost ownership and achieve cost efficiency.
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Using gamification and incentives to create a culture of distributed cloud cost ownership and achieve cost efficiency.
Usage optimization focuses on controlling cloud costs by minimizing unnecessary or inefficient resource consumption. Think removing idle resources, rightsizing, and taking advantage of cost saving mechanisms (e.g. S3/EFS intelligent tiering in AWS). For a deeper dive into how this is difference from rate optimization, see here.
While rate optimization can be centrally managed by Cloud FinOps without any engagement from engineering teams, usage optimization typically needs input from engineering teams managing those workloads. At Enterprises central FinOps Teams often don’t even have the ability to make changes to infrastructure.
Acting on usage optimization therefore inherently requires engaging distributed cloud cost owners. I’d propose that achieving engineering action inherently requires incentives.
Acting on usage optimization therefore inherently requires engaging distributed cloud cost owners. I’d propose that achieving engineering action inherently requires incentives.
It’s no surprise that “Engaging Engineers” is consistently rated toughest challenge by FinOps folks.
Leaderboards are visual representations of performance rankings, showcasing teams based on specific metrics. In the context of cloud cost optimization, leaderboards display the efforts and achievements teams in achieving cloud cost usage optimization savings.
Humans are naturally competitive, and the desire for recognition drives us to excel. Leaderboards tap into this psychology, fostering a sense of accomplishment and healthy competition among employees.
Gamification involves applying game elements to non-game contexts. By incorporating elements like rewards, badges, and friendly competition, leaderboards make cost optimization engaging and fun. The “score” is easy - it’s the amount of cloud computing resources wasted that can be saved. The incentive provided depends on the company, but successful Cloud FinOps Teams achieve distributed cloud cost ownership with incentives.
The table below show’s Cloudthread’s Leaderboard, highlighting the amount of money Wasted, Spent, and Saved every month. Some quick definitions:
Wasted: Sum of all the Savings Opportunities that didn’t have any action and contributed to wasted spend during the month.
Spent: Total cloud bill attributed to that Team during the month.
Saved: Sum of all Monthly Savings that were acted on by the Team during the month. For example in the month if a Team rightsized an RDS instance that saved them $100 per day, this would contribute ($100 x 30 =) $3,000 to Saved.
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Leaderboards make distributed engineering teams more aware of cloud cost consumption, accumulated waste in their infrastructure, and the impact of their actions. This awareness is the first step toward optimization.
People are highly motivated by incentives. But a system of incentives that isn’t trusted is destined to fail. Leaderboards provide an objective and consistent source of truth that shows how much teams are spending, wasting, and saving each month.
…a system of incentives that isn’t trusted is destined to fail.
Recognition on leaderboards boosts employee morale and motivation, resulting in increased participation in cost optimization initiatives. Competition encourages employees to outperform one another in cost-saving efforts, leading to better results.
I’ve seen companies adopt a “wall of shame” approach to cloud costs which can be effective in catalyzing action on egregious but incentives are a better way to operationalize cloud cost savings for the long term.
Define Teams that are associated with cloud cost ownership centers at your company. Depending on how your company attributes infrastructure ownership this can be by Business Unit, by Product, by Region, by Team.
With Cloudthread Teams can be segmented and attributed based on AWS and GCP cost dimensions (Azure coming soon!).
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Each Team needs visibility into all the waste that exists in their attributed infrastructure. Cloudthread computes 50+ savings opportunities to highlight cloud cost saving potential per Team.
Central Cloud FinOps Teams, especially when first starting to roll out cloud cost usage optimization initiatives, often want to tackle different savings initiatives at a time. For example one month they may want to focus on RDS idle instance cleanup and rightsizing and another month focus on Graviton migrations.
Being able to assign priorities to Savings Opportunities and then filter Team priority visibility is essential to achieving this focused approach.
When the ground work is complete, it’s time to:
Essential to this process is ensuring that Teams are surfaced their savings opportunities on a regular cadence and that it doesn’t become a monthly/quarterly exercise. Cloudthread facilitates this process with weekly Savings Reports for Teams via email and Slack which surfaces how much savings potential the team has and new Savings Opportunities that have been created in the week.
Operationalizing the incentive program requires the Cloud FinOps Team to review the Leaderboard on a regular cadence and distribute the incentive. Often what can be effective is a mid month check in to make teams aware of what the current ranking is.
Leaderboards are powerful tools to motivate teams in optimizing cloud cost usage. By harnessing the psychology of competition and recognition, organizations can achieve significant cost savings while fostering a culture of distributed cloud cost ownership.
Embrace leaderboards as a valuable addition to your cloud cost optimization strategy, operationalize usage optimization, and watch your organization thrive in the cloud computing era.
