Brad Payne: Integrating FinOps and Business Strategy

Speaker A: Greetings, everyone. I'm Brad Payne, and this is the world famous Finops Pod.

Speaker B: Hi, I'm Stacy Case. And I'm Joe Daly, and this is Finops Pod.

Speaker C: This is is fot.

Speaker B: And if you're still with us, Joe, how are.

Speaker C: Well, Stacy, this is episode three of the year 2025, and we are in the tenth month of the year.

Speaker B: Well, we had a goal.

Speaker C: We had a goal to not do

Speaker B: more than five, and I think we're there.

Speaker C: I'd forgive anyone who thought we canceled this podcast. We didn't. It's just, uh, you know, slow moving.

Speaker B: And to be fair, Joe, for all of the people out there who have asked to speak on the podcast or have recorded. It's not you, it's us. It's 100% us.

Speaker C: Absolutely. It has been brought up. How about you let someone else edit this? I, uh, could turn over the audio file and let a professional do this work. No, but they don't know what they're doing.

Speaker B: Let's be honest. The only reason you'll never let somebody else edit this is because they will leave all of the stuff. Stuff in there that you say that gets cut out because you only leave things in there that make me sound questionable.

Speaker C: I may be drunk with power, but I just feel like it's more like if we do it, if it's edited here, it's more of the feel of the community, so it, uh, goes way slower. But having said that, advances in AI editing have come a long way between the last episode and this episode.

Speaker B: So it wasn't that you were not getting to it, that you were waiting for technology to catch up.

Speaker C: I did feel really bad. This interview with Brad Payne from Point Click Care we recorded this July, maybe August. It's been long enough that I actually don't remember. It takes, like, three, four, five hours to edit an episode with A.I. uh, it took 45 minutes. I felt so bad. It took me two months to get.

Speaker B: But knowing that maybe there'll be less hesitation to record other people and we can get to five in 2025.

Speaker C: Oh, we're gonna get to. Let's see. We had three. We had Larry, Kim, and Ron from Target, and we have this one.

Speaker B: Wait, do Kim and Ron count as two?

Speaker C: I'm gonna re release it.

Speaker B: Re release and re release it as Ron and Kim.

Speaker C: There we go.

Speaker B: Just change the title. Put it this way, at this rate, we can't even do a best of, uh, at the end of the year because we. It would just be two podcasts, just

Speaker C: like can you just listen to the ones we put out?

Speaker B: I am glad to hear that the editing is going a lot faster. That did take a long time. I feel like that's the Perfect plug for FinOps for AI training.

Speaker C: You could talk about how I'm racking up all these costs using AI to do editing.

Speaker B: Well, Joe, we just happen to have an amazing course that we are in the process of releasing right now, which is the FinOps certified FinOps for AI, which is different than any other of our courses that we've done in the past. Because this is a training series where typically when we release a training, it's kind of like with editing, like you, you record it all, get all the information in, build a course, edit it and then push it out. You have to know everything in advance and then push it out. But with this one, because AI is moving so quickly, it's changing so quickly. And the way that we're thinking about finops for AI has evolved a lot. We're releasing it in series, so we've already released the introduction and level one and then in November we'll release level two and then January level three and then the certification right after that. It's really robust. And as we're going through this, I was talking to our instructional designers, Natalie Bergman and Charlotte Bergman, and I was like, this is just going to be like an hour long module and then when we get them all together it'll be like a few hours, like oh no, no. Level one by itself is like a four to five hour course. It is so robust and meaty, which I know that you've taken it and you know that too.

Speaker C: That's why I couldn't get the podcast

Speaker B: though, because of the courses. Anyway, so finops for AI is out now. Get it. It's great. It's amazing. I've learned so much taking it and I'm just super excited that that's out in the community right now.

Speaker C: Actually, the pricing on this editing software is being switched to a more variable rate based on consumption. So it was a fixed price of however much I used each month. But now with all these new AI features, they're using consumption based pricing. Maybe this certification will be useful for me.

Speaker B: Not maybe it will be.

Speaker C: I can't wait.

Speaker B: Inter sound effect of like, I don't know, like happy, cheerful sounds. All right, so back to Brad. Tell me a little bit more because I know that since you did edit, you re familiarize yourself with the content, what he's doing, how they're linking his FinOps program closer to business value. Talk to me what you mean.

Speaker C: So Brad and the uh, FinOps team at point Click Care are really cool. Click Care is in the healthcare industry with nursing home spaces and things like that. They provide software that supports those sorts of services. What they've been able to do Is take their FinOps program and their metrics, their unit economics and instead of making it based about some sort of technology like servers, storage, etc. They've linked it. They've actually linked it to product and business product that gets sold to the end user customer. And what's amazing is that they started working with finance and they're tying it to uh, revenue and margin and they came to the realization that the, the salespeople in the business were selling the products based off of different cost structures from before they migrated to the cloud. So they got really involved very close to the business. It was finops informed business decisions and pricing decisions. So it's very cool. And I, what I really like about this story is I did FinOps at uh, two Fortune 100 companies, really, really large companies, thousands of workers, and I was sitting in a shared services department that was far away from the business. People in that department felt like they worked for an IT company, not a healthcare distribution or insurance company. So to get so close like Brad did and actually be able to impact how it hits the consumer is. It's pretty cool. It's pretty cool.

Speaker B: That's really cool to think about how the work that you're doing in Venops can go back to impacting, like really being able to make an informed decision on impacting the price of a product or how you're selling it or anything like that. It's cool. I can't wait to listen to it.

Speaker C: It's great.

Speaker B: So let's listen to Brad. Let's go from um, Point Click Care.

Speaker C: So why don't you introduce yourself?

Speaker A: Yeah. Brad Payne. I work for Point of Care here in Mississauga, Canada and have been leading the FinOps function since 2020. We're certified practitioners since 21.

Speaker C: Now I don't normally focus on where people work.

Speaker A: Right.

Speaker C: However, for the case of your story, I actually think it's important to know what Point Click Care does. Can you just share in a nutshell, what Point Click Care does?

Speaker A: Yeah, absolutely. In the healthcare space, we're a technology company that offers SaaS solutions for that space. The aim of that is making sure that every care provider can give the best possible care to the residents. So like real world examples, what that means is if you think of having a family member, a loved one in a long term care facility in North America, there's a high chance they're using some of our software and the idea is that software is supporting caregivers to provide exceptional care.

Speaker C: Excellent. That sets us up. Lovely. Now, like I said, I've heard the story before. It's one of my favorite finops stories and it's taken a long time to circle back to get recorded. So I'm super happy to do this. Point click Care SaaS, provider of services for long term care facilities in North America. And your position is leading the. Is it just a finops team or is it more than finops?

Speaker A: It is the finops team.

Speaker D: Cool.

Speaker C: And what's your reporting structure?

Speaker A: Up to the SVP of SAS Engineering Operations. That is hosting, right? That is us and the team. My peers are cloud SRE leads, database reliability, service delivery management. It is the organization that is keeping all the infrastructure in the cloud running and safe and secure and performant.

Speaker C: You're in hosting, you're firmly in the middle of it. Uh, that's your day job. That's who you're interacting with every day. So you have a unit economic story that really is one of the best I've ever heard. Can you share that?

Speaker A: I believe our journey into the cloud post migration is probably identical to 99% of other organizations and other pin ops practitioners. We hit some sort of cost crisis, right? I think what we did differently than most was rather than going straight at optimization, we went straight at allocation and unit economics. We very quickly wanted to understand what we were spending all that money on in our context. We didn't want to know that it was Azure vms or SQL Managed Instance or load balancers or bandwidth costs. We wanted to know for point click care for our customers, what are we spending this money on? Starting that robust allocation. Let us understand unit economics pretty quickly and in doing so make those optimization decisions.

Speaker C: So you're just instead of like, oh my God, the dumpster's on fire, you're saying where is the trash in the dumpster coming from? Horrible analogy.

Speaker A: No. And is it trash or is it actually someone like a little raccoon, right? A little trash panda in there trying to figure it out. It's all on fire. But maybe this is something that we want to keep around. Maybe this is. Okay. Yes, exactly.

Speaker C: So what did you start finding?

Speaker A: I think some of the findings that we got was I've been on point click care for I'm approaching 12 years. There were moments when we were Starting to bring together the different elements. We had our hosting costs, so we knew we were spending in Azure. Our allocation model was there. We knew what that spend was relative to our products or projects and environments. We had all the different combinations and permutations for allocation. And then we started getting data about our customers, their size, the revenue they're bringing in, and starting to compare all that together. I feel like we knew either for the first time or since we were a very small startup, what the unit economics was for things we knew, you know, product X was costing us X amount to host every month, but we also knew what the revenue was. And so we knew what margin was or we knew what the ratio of cost to revenue. We could start understanding that for multiple products. In some cases we could start understanding the cost to host. This product for the Joe Daly organization is X and it's Y for the pain foundation. We could ask those questions about, well, why is it different? And we could, in understanding our customers, we would know, well, that makes sense because the right. The Joe Daly customer is so much larger. They have different demands and their hosting costs are different. Uh, so that's what we were able to understand of the things that are on fire. Should some be burning brighter than others?

Speaker C: Who did you work with to find out where the spend was coming from? In finding out, it's this customer or that customer. Yeah.

Speaker A: So we started being within hosting, getting that data set of what our production environments look like and what the environments that host the customers and generate on the cost, getting all that data very easy. That's within our vertical, working very closely. And then it was reaching out to our financial planning and analysis team and partnering with other folks in finance to get data about our customers.

Speaker D: Mhm.

Speaker A: They could tell us customer X is generating revenue for these products in these ways or customer Y is doing similar or different.

Speaker C: You were collaborating with finance and going deeper in finance and you were able to tie. All right, these customers drive this much revenue. And on the flip side, you knew exactly how much their cloud bill was. So if you saw a cloud bill was far larger than another customer, you could start asking questions, especially relative to the revenue.

Speaker A: Yeah, exactly. That led us to, in a couple cases, working with pricing and packaging and then we had to start understanding discounting structure. That started to become interesting and raised a whole set of insights. We identified certain areas where the revenue was notably lower. Like, hey, what's going on here?

Speaker C: Let's take a step back because this is where I think things are fascinating. What is pricing and packaging and where Are they in point? Click Care.

Speaker A: During our journey during this pricing and packaging actually moved as a function that was in product operations into finance. So in different organizations, perhaps it sits in different areas, but I suspect product operations could as well. But the individual we're working with was VP of pricing and packaging and the task there was ensuring that new products or existing are bundled. I'm um, probably going to like, you know, butcher this a little bit. Are bundled in such a way that when our customers purchase them, they're getting value. And so instead of us being seen as an organization that's nickel and diming, like, oh, this feature is X amount of cents per day or this product's another dollar to your bill and so on and so on. Right. Trying to get away from being a la carte cable type company, but wanting to be here's a package, it has these different products and that there's value in that to the organization.

Speaker C: Right.

Speaker A: Price engine packaging is the group that makes that make sense. Brings in, we understand our hosting costs, what the market will bear. We need to make margin, all these things and then with all those formulas arrives at the cost that our customers pay.

Speaker C: So now you, you've worked your way from finance into what is it Basically the business that is deciding how to sell the product to each customer that's

Speaker A: uh, informed sales, lets them know, hey, discounting structure could be plus or minus X percent given size of customer, importance of customer, all these things. Right. I think the thing that finops could do very well was it costs us X to host it. But there's all those additional costs, what's our people costs around that, what are supporting it. And that's just, that's just table stakes. Then there's okay, how do we make margin? How does this relate to competitors? That's the magic that pricing and packaging is doing.

Speaker C: And you found they were packaging things in such a way that we're driving up the cloud spend.

Speaker A: We found legacy products that had pricing models that no longer made sense in the cloud. The specific one that's easy to talk about that I think we would all understand was around user storage. Right. SaaS solution. Our customers needed the ability to upload documentation. Okay, we priced that and that pricing model had not stated, had not changed from our journey on Prem to the cloud. As a FinOps person, you know, your cost basis just changed. In moving from on Prem to the cloud, this was an area where we knew the pricing M model had to change since we had migrated.

Speaker C: Then what happened? You told them like, okay, you're Giving away the storage.

Speaker A: Right. They were reviewing it. We were able to bring data to the table. That said our costs would be X as a baseline. Please consider this the minimum that we must. We should now be charging.

Speaker C: Right.

Speaker A: The unit economics has changed from two years ago prior to the migration. It's got to be this. And yeah, the end result was prices and packaging, working with product, working with other stakeholders across the organization. We are now billing our customers differently for our users and storage product than

Speaker C: we were before for y. I think it's amazing. I've worked at many companies and if you're in the IT department, especially in a hosting department, you're often so far away from the business. So the fact that you got really close up to the business, to the people talking to the customers and saying this is the deal and you were able to say, hey, you are creating dumpster fires of cloud spend.

Speaker A: Yeah.

Speaker C: And give them information and partner with you on that.

Speaker A: Yeah, I agree.

Speaker C: It was.

Speaker A: You know, you and I have talked about the recent thing I'm working on around revenue leakage and I find both of them are so much closer to the business than they are to the infrastructure.

Speaker C: Yeah.

Speaker A: Like in the example of our user storage solution, we could optimize hosting costs there to help make the packaging model. Makes sense. But you, as we all know, there's only so much optimization you can do in the cloud. And if you compare your cloud infrastructure to your on prem and capitalized assets, like we were never going to make that up. Not completely. So yes, do the work to optimize and inform the business. We have to think about selling this in a different way. We've come across a couple of other products that we found discounting structures on certain products that it's just like you can't discount it that way anymore. It made sense on prem. It made sense when we own the assets after X amount of years. But we're paying for this every month in the cloud. That, uh, discount structure won't work anymore.

Speaker C: That's so cool. So you've been partnering with the business this way for a while now. I think that's so amazing.

Speaker A: Yeah, I guess. I mean we talk about Personas. I think a big part of our success was very early on working with financial planning analysis. I meet more frequently, routinely with our finance partners than sometimes engineering. I think that's the thing that's made us really successful.

Speaker C: It's collaboration at its best.

Speaker D: Uh.

Speaker C: Right. We can come up with so many amazing engineering and technological solutions. But how is the business using it? And how is the business driving it? I remember that one of the companies I worked at a really awesome data lake that just had all this data in it and you could find out all sorts of information on it, but it would just leak material, huge logging costs. And we were like, what is driving all this logging? What is driving this? And we figured out that the business, instead of like querying just the information that they needed in all the entirety of the data, like every single time I would just beg, like, can you please go talk to the business and just say the user needs to know that they need to use the tool differently? You know, uh, there was just so much hesitance to be, to leave the safety of the middle of it. It's really amazing to hear you make that connection. So you're having all this success with and you're continuing to stay connected with the business now and working closer with the business than necessarily with it. You know, how has this evolved and how are you continuing to work with them?

Speaker A: We really continue to work kind of ad hoc. So I think there's a couple things that happen. The way we've done our allocation model and bring our data into the system is kind of on a monthly cycle. We're identifying opportunities. We talk about anomaly detection and I suspect when we think of that we think, oh, somebody left that gateway on. But anomaly detection for us is, hey, this environment's costing more than it was last month, or the product offering for Customer X was more or less than it was last month, or this environment's costing more than that environment. So we look at anomaly detection that way as well. And so we track those trends of what our products are costing. See, there's LRs there. Occasionally if there's something there, we can have conversations with the product or engineering owners.

Speaker C: But that's brilliant what you just said. And I'm going to pull up the FinOps framework because we've just updated this year. We put business strategy on top of the FinOps framework and technology strategy and FinOps ties the two together. When I was a practitioner, we were so far away from the business products, I made a few attempts to try to take tie it all directly to the business products. But it's super hard failing to do that. Like all my anomaly alerting, all my allocation were based on IT constructs that match the business as best we could. What you're doing is you're saying, I know this environment supports this business offering this customer and now I'm able to do anomaly alerting off of uh, business operations.

Speaker A: Okay, so you're making me feel even more accomplished.

Speaker C: Yeah, that's why this is a cool story.

Speaker A: That's how we've always done it. We would not be successful going to an engineering team and saying, hey, your DV3 spending's gone up. What are you buying all these VMS for? We have to go to the particular team and say, hey, you've increased your monthly run rate by X percent on product. Product, why? And it's related to VMS and database costs. We've got alerting around that when we hit certain thresholds. That's a trigger for me to have the conversation with engineer Joe saying, hey, man, what's going on? Doing a check in. Like, maybe you're within budget or maybe you're going to trend over budget. But, right, we can paint a picture of, uh, a product or a project. A business construct is trending this way because of these reasons. It just, the amount of it is alerting, but it may not be alarming relative to budget and forecast stuff. That's the package. If you hear from finops at point, click Care. That is the parcel we will deliver. Not just a, uh, hey, you're spending too much on VMS this month because

Speaker C: that's so meaningless to them. And yeah, it's amazing.

Speaker A: That ties back to the original problem. Yes, there's a cost crisis, but what's on fire? Is it valuable? Are there things that we want burning brighter than others?

Speaker C: Yeah, I remember. So I heard you tell this story at, uh, your Toronto meetup a few years ago. And I was sitting there and I was just like, this is amazing. And I was just looking around everyone like, right, right, this is amazing. And everyone's like, yo, this is a good story. It's a very good story. But I'm like, no, you're connecting with the business and it's so hard to do that. And a lot of the reasons, companies that have been wrong for 100 years and some of the products are running on mainframes, they're all over the place and they're sharing applications and sharing solutions and environments. Oh, my goodness. It's a maze that you have very little chance of getting out of, uh, trying to tie it back to the business. That's why I think these stories are really impressive and you should feel accomplished because it is a very impressive thing you've done. The collaboration that you have with the business to where you're at is impressive.

Speaker A: I appreciate the kudos, sir.

Speaker D: Thank you.

Speaker C: Yes, absolutely. And I'm super impressed with the idea of like, hey, Rather than saying we're having a spike in VMs, we're having a spike in client document storage and

Speaker A: it is related to the storage costs or it is related to whatever other services that we might have supporting yet. Client document storage.

Speaker C: So this is so funny. It started off to me in my head as a unit economic story, because that's how I remember it. You were talking about. Yeah, we were tracking the unit economics of these different products and really it starts as an allocation story.

Speaker B: Yeah.

Speaker C: And then unit economics, measuring the unit economics anomaly and alerting and total collaboration. So you just, you're hitting the FinOps framework all over the place. Ah.

Speaker A: It still just strikes me the amount of value we get out that any FinOps team, practitioners, anyone, will get out of a really robust allocation model. Like, sure, we can accomplish that with tags, but go further. There's so many more dimensions of data that you may want to understand. And having that model, really strong foundation just allowed us to build up quickly. Right.

Speaker C: Uh, and it matches. Does that like match your business structure of point care?

Speaker A: Yeah, exactly. So that's how we started. We still maintain that structure. Sometimes FinOps is fighting to maintain that while we're finding now maybe it's time to mature. To give you an example of how our allocation structure matches the business and how we make some of our cloud resources match. A particular subscription in Azure can reference an environment that is linked to a cost center who is a VP that may or may not have a line of business. And within that, using the resource groups from Azure, resource groups can contain products or projects. So then we know these resource groups are in a subscription that belongs to a cost. Like we're getting a lot for free. Having established that just by. Oh, Brad and Joe have these resources in this resource group. We know which VP that goes to, we know which cost center that goes to, we know if that's opex, we

Speaker C: know if it's cogs, all that kind

Speaker A: of flows and that supports that anomaly detection I was telling you about. It's that nomenclature and taxonomy that says, hey, Brad and Joe, you've got a spike on this thing. It's impacting your budget if it continues at this rate. Let's chat.

Speaker C: So you are very aware of how the business operates, how it's structured, and you're able to match your work to line up with that so that the data you collect can turn into information that could turn into messaging, the stories and then.

Speaker A: Correct. Yep, absolutely. And that was where we put our attention first versus hey, wish we optimized. Wish we shut down. It was. Hang on, what are we looking at? Four Point Click here.

Speaker D: I love how the Point Click Care team didn't just chase our optimization immediately, but instead built a foundation around allocation and unit economics, really connecting cloud costs to the business. Not a lot of people would slow down enough to act with such forethought. The immediate thought that comes to mind is to put the dumpster fire out, but the way they approached it actually helped them emerge from the initial fire into a place that put them into a spot to change business pricing. It's such a great reminder that FinOps isn't just about saving money, it's about understanding value. Huge thanks to Brad for sharing his story and for showing how finops can bring engineering, finance and product teams together to make smarter, more impactful decisions. And if you are not set up to work so closely with the, uh, end business yet, what can you do? My recommendation?

Speaker C: Start by making sure your work ties

Speaker D: to the leadership goals. If you can't tie your work directly or indirectly to leadership goals and strategic projects, start asking questions so you can learn how they do. That's step one. Then look who you are supporting and then who are those people supporting? Is there anything you can do to shrink the distance between you, your immediate stakeholders and their stakeholders? Not with the intention to eliminate the stakeholder in the middle, but to make the data and decisions better quality?

Speaker C: I'll leave it there for now.

Speaker D: I do want to take a moment and thank every person who has reached out to share with either me or Stacey how much you enjoy finops Bot. I'm not lying when I say that you are the fuel that helps us get these shows produced. Thank you for letting us know and thank you for asking for more. We will do our best to keep meeting you here, hopefully more often. Thank you to Brad Payne for sharing this awesome story and for the extremely long wait to get it out. And thank you for Stacy Case for being awesome and always kicking off the podcast with such great energy. And thank you to you for wanting to listen. Uh, until next time, keep on finopsin'.