Maximizing cloud value for taxpayers through FinOps transformation

Social Security Scotland, an executive agency of the Scottish Government, was designed from day one to operate in the cloud environment. With the mission to deliver benefits fairly and efficiently to the people of Scotland, Social Security Scotland built their infrastructure on Amazon Web Services (AWS), embracing the agility and scalability of cloud-native technologies. 

But rapid growth came with hidden costs. As the organization scaled, their cloud spends grew without the dedicated governance needed to track or optimize it. Under those circumstances, Social Security Scotland faced two pressing challenges:

• Significant cloud spending without clear visibility into resource utilization and cost controls.
• Inability to attribute cloud consumption to specific teams or business units, making it difficult to ensure cost attribution to the right service owners.

With a delivery Programme nearing its end and the increased emphasis on budget constraints at both UK government and Scottish governments, Social Security Scotland made optimizing costs, without compromising service delivery, a significantly higher priority, with maximizing value for the citizens of Scotland the clear aim.

To tackle their business challenges, Social Security Scotland took the decision to invest and  partnered with IBM Consulting® and Nordcloud, an IBM Company, to outline and assist in the  implementation of a comprehensive FinOps transformation. The implementation began with the deployment of the IBM® Cloudability® platform, a leading FinOps tool that provides immediate visibility into cloud spend and surfaces actionable cost optimization opportunities.

On one side of the partnership, IBM Consulting worked closely with Social Security Scotland’s engineering leadership and Chief Digital Officer (CDO) to assess the financial impact of their cloud usage and define a roadmap for transformation. This strategic advisory work was powered by IBM Cloud Platform Engineering Services and IBM Cloud and Technology Strategy, which helped architect a solution tailored to Social Security Scotland’s unique public sector environment.

Social Security Scotland chose not to implement the fully managed service but Nordcloud, defined the strategy, operating model and supported the required engineering efforts and the change generally. Leading, for example, to showback reports that revealed which teams were consuming cloud resources and how much they were spending. This enabled Social Security Scotland to ensure accurate cost attribution and foster a new culture of accountability. In addition, the IBM Consulting team also layered in custom analysis and semi-automated engineering solutions to identify and eliminate waste.

Security remained the top priority throughout the transformation. IBM, Nordcloud and the Social Security Scotland re-architected applications on AWS with security and compliance embedded by design. This included implementing “compliance as code” practices that aligned with the agency’s internal security standards, filling the gaps where controls had previously been missing. The team also introduced the use of enterprise-grade, open-source technologies to reduce licensing costs. Additionally, they created a tailored FinOps framework that combined automation, manual analysis and strategic consulting.

The result was a smarter, more transparent cloud strategy that not only optimized spend but also enhanced digital service delivery and operational resilience. Social Security Scotland is now at the forefront of FinOps capability in the UK public sector and a model for other organizations to deliver the best possible value for taxpayers.

The results of the transformation were immediate and impactful. In just 18 months, Social Security Scotland achieved the cost optimization goals originally set for a three-year period. Within the first year alone, the organization had a 30.4% reduction in cloud costs. As a result, the agency was able to save a huge amount, with 78% of those savings driven by usage optimization.

“We didn’t just deliver cost optimization—we helped Social Security Scotland build a FinOps operating model that gave them control, accountability and long-term sustainability. Introducing cloud unit economics provided a benchmark to measure the business value of the cloud. Finally, achieving three years’ worth of savings in just 18 months was a testament to the power of strategic consulting and engineering working together,” say Olga Zagraba and Marcin Walków, Nordcloud FinOps consultants.

Key outcomes include:

• 390% ROI achieved in 18 months, exceeding 3-year targets in half the time 
• 36% drop in core business cloud costs, driven by usage and rate optimization, including rearchitecting and licensing, measured by cloud unit economics 
• 30.4% reduction in cloud spend in the first year
• 78% of savings from usage optimization, enabled by tailored engineering and FinOps practices

Social Security Scotland, founded in 2018, is an executive agency of the Scottish government. Headquartered in Dundee and Glasgow, they administer 17 benefits to around 1.8 million people across Scotland. With approximately 4,000 employees, they operate under principles of dignity, fairness and respect to support those in need.