#17. Do you really need FinOps Tools?

Should you buy a FinOps tool, build your own or use existing native tools?

At FinOpsX, I realized that most of the vendors were FinOps tools providers. In fact, as of today, there are 106 tools listed on the FinOps foundation landscape website. Having a FinOps tool seems to have become a fact of life for most organizations. Yet, it's important to ask the fundamental question: Do we really need a FinOps tool? If so, why and when? This article will help you make up your mind.

TL;DR

Before rushing to buy a tool, setup FinOps culture and educate people.
Tools should provide a real added value, specially facilitating automations.
Balance between price and expected outcome before purchasing a tool.

A fool with a tool is still a …

Pardon my bluntness, but this statement rings true. If you believe that a tool offering cost-saving recommendations and fancy dashboards will automatically save you money, you're deceiving yourself. The real issue isn't about lacking visibility into cost-saving opportunities. In fact, most of these tools provide identical recommendations—pulled directly from Cloud APIs—so you might as well access them through the native cost optimization services provided by the cloud platforms.

Does this mean buying a tool is a waste of money and time? Not at all. But a tool is just that—a tool. It's a utility that offers convenience, not a substitute for poor practices and lack of accountability. Organizations should focus on educating all cloud stakeholders about their roles and responsibilities, and specifically train cloud engineers and application owners to make sound decisions about cloud usage. Only then might a tool become truly valuable.

Why should you use FinOps Tools?

Here's a fact: FinOps reaches high maturity when most processes are automated. This should be the main focus of tooling. While dashboards showing spend allocation and cost recommendations are nice to have, you don't really need an extra tool for those features. What you need is a tool that provides real value—and that largely comes down to automation.

From my experience, here are some valuable examples of tools that provide automation (without mentioning specific names):

Automatic cost allocation without tagging. Some tools provide contextual cost allocation using smart mechanisms that scan network data, APIs, and raw data (e.g., database transactions) to allocate your costs. This is especially useful to calculate the unit economics.
Commitment Laddering. Without doubt, costs achieved through cloud rates or commitments (e.g., Saving plans, RI, CUDs, etc.) have higher potential than those of cloud usage. However, this can only be maximized by increasing the effective saving rate (ESR). A tool that automatically purchases commitments based on demand can save you significant money.
Automated usage cost savings: Some tools rightsize block storage capacity and manage memory and CPU for containerized environments (e.g., Kubernetes). These tools remediate actions on your behalf and automatically generate substantial cost savings.
Shifting left and governance: Look for a tool that provides cost-saving recommendations before you incur them. These tools typically include mechanisms to apply your service recommendations to a governance catalog, ensuring that cloud spend stays aligned with business value.

What is your FinOps tooling Strategy?

So, should you buy a tool, build your own, or just rely on open-source and native tools? This is a decision each organization must make, but here are some tips to help you:

Consider using native tools or open-source solutions for cost allocation, visibility, basic cost-saving recommendations, and reports (e.g., cloud cost management portals). If you have multiple clouds or on-premises infrastructure, consider normalizing the data using FinOps Focus. This approach might be significantly more cost-effective than most paid options.
You might want to consider building simple dashboards and tools that provide visibility of spending or automate task creation. However, be aware that maintaining such tools can come at a high cost in terms of time and resources.
Buy tools that will automate actions on your behalf. The examples from the previous section might address your needs. These tools are essential for maximizing your cloud savings.
Be skeptical of tools claiming to provide all FinOps services in one suite. While they aren't necessarily poor choices, they often provide limited real value. Focus on depth versus breadth—more functions don't always mean better results.
Last but not least, consider the price. Most tools charge a percentage of your cloud spend. If you're investing in a tool, it should generate at least double that investment in cloud savings.

Summary

Don't rush into buying FinOps tools. First, establish a genuine FinOps culture by educating and empowering all cloud stakeholders. Then carefully evaluate whether you truly need a tool.

Focus on tools that deliver real value through automation—everything else is just nice to have. While there are many pros and cons to buying, building, or using native tools, the bottom line is simple: your investment should be worthwhile. The tool must deliver clear savings in money, resources, and time.