This post first appeared on my personal blog, The Human Side of Tech.
Read Time: 20 minutes
In an era of rising cloud costs and shrinking tech budgets, the most valuable engineers combine technical excellence with understanding the business impact of their decisions. You don’t need to become an accountant, but in today’s ROI-driven tech landscape1, financial awareness acts as a powerful multiplier for your technical impact.
Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments. It directly measures the amount of return on a particular investment, relative to the investment's cost.
As engineers, we often focus on performance, scalability, and shipping value fast. But behind every commit is something most of us rarely think about: a price tag.
I learned this lesson the hard way. Eight years ago, while working at a startup, I led the development of an end-to-end chatbot configuration platform. Microservices were generating lots of buzz at the time, and I eagerly jumped onto the trend. In my enthusiasm for building “modern” architecture, I designed every configuration step as its own microservice.
While the accidental complexity was off the charts anyways, it also turned out that AWS Fargate was quite expensive, in comparison to our startup’s runway. With that realization I just had to merge the services together. The preferable architecture was a simple, monolithic application, deployed on AWS Elastic Beanstalk. What would have been 6 Fargate instances, became a single service, much cheaper, much less accidental complexity.
Boring and simple—usually the best choice anyways.
While discussions of engineering economics exist in various forms—from specialized FinOps resources2 to leadership books to platform-specific optimization guides3—there’s a noticeable gap in practical guidance for everyday engineers. Most resources either target specialized roles or focus narrowly on technical optimizations without developing the underlying financial mindset.
This article addresses that gap by focusing on how individual engineers at any career stage can develop financial awareness as a core competency that amplifies their technical impact. Rather than treating financial thinking as a specialized discipline or a leadership-only concern, I argue it’s a fundamental skill that belongs in every engineer’s toolkit.
Every technical decision carries financial implications—whether visible or hidden. Before we dive into specific practices, let’s explore the fundamental financial principles that underpin effective engineering. These core concepts will provide the foundation for everything that follows, helping you think more holistically about the true costs and returns of your technical work.
Your time is expensive. Your infrastructure is expensive. Your complexity is expensive.
Engineers are hired to generate value through code that exceeds their cost. When an engineer consistently delivers work costing more than the value produced, it signals a fundamental misalignment in priorities—unsustainable for both engineer and company.
I’m sharing this to create transparency, not anxiety:
At my current company, we use a internal tool called “Cost Finder”. It analyzes our infrastructure and gives you notifications, if there’s under-utilized resources and presents you the calculated savings. Convenient downsizings like these, save significant monthly costs with zero impact on performance. A nice demonstration of engineering maturity and finesse.
Think of every technical choice as a small investment. When you develop the habit of weighing cost against return, you’ll naturally make better decisions.
The most common mistake I see engineers make goes beyond technical issues—they often work on things that feel productive but create minimal actual value.
You might spend a week polishing an internal library that saves each developer five minutes per month. But what if that same week could have gone into fixing a critical user-facing bug affecting thousands of customers? We call this opportunity cost, and your ability to recognize it often separates good engineers from great ones.
Before starting any significant work, ask yourself:
Try framing even technical debt in business language. Rather than saying, “We need to refactor this module because the code is messy,” try something like: “Our team currently spends approximately 8 hours per month debugging issues in this module. This refactoring would reduce that to 1 hour per month, saving us a full engineer-week per quarter.”
I know, it’s hard and feels quite unintuitive at first, but this thinking will ground your decision-making further by transforming technical concerns into quantifiable business investments. When you start attaching concrete financial metrics to your technical initiatives, your decisions become more accurate, data-driven, and the outcomes more predictable and measurable, rather than relying on intuition and proxy metrics alone. Weighing off opportunity cost will get much easier.
When you communicate in these terms, product teams and leadership begin to view your technical judgment with greater credibility. You transform from being seen as merely a technical person into a true business partner.
You won’t find technical debt on any financial report, but make no mistake—it extracts a real price that compounds over time.4
We’ve all seen it happen. Teams ship fast without proper engineering investments, creating a temporary illusion of velocity and “making that deadline”. Then six months later, the reality hits: you struggle to integrate new features, tests become increasingly flaky, onboarding new engineers drags from days into weeks, and delivery timelines keep stretching longer.
I’ve found these costs are surprisingly quantifiable:
Especially as a staff engineer or engineering leader, your job goes beyond just identifying technical debt—you need to translate it into business impact. This approach moves you from merely pointing out problems to practicing genuine ownership of both code and organizational success.
While technical debt represents the “hidden costs” in our codebase, cloud infrastructure often constitutes the most visible and immediate financial impact of our engineering decisions. As we move from examining the costs embedded in our code, let’s explore how modern cloud environments make financial awareness both more urgent and more actionable for engineers:
The shift to cloud computing and consumption-based models has fundamentally changed how engineering decisions impact finances. This new landscape creates both challenges and opportunities, making financial awareness more urgent and actionable than before. Let’s study how modern tech environments have transformed the financial implications of engineering work.
The public cloud has fundamentally transformed how we build software. It has also made costs much more visible and immediate, creating both new challenges and valuable opportunities.
Enter FinOps (Financial Operations)—a practice that gives engineers both the tools and mindset to take ownership of infrastructure costs. At its core, FinOps brings financial accountability to the traditionally separate worlds of engineering, finance, and business.
The waste can be substantial:
Gartner research shows that organizations typically waste 30-70% of their cloud spend due to idle or improperly managed resources.5
Engineers with FinOps awareness naturally understand that resources spent in one place can’t be invested elsewhere—making opportunity cost a constant consideration. In practice, they:
The rise of serverless and consumption-based pricing models has fundamentally changed the financial calculation for engineers.6 Unlike traditional fixed infrastructure where overprovisioning was the primary concern, these models put costs "in your face" with direct correlation to usage patterns. This creates both challenges and opportunities:
The upside is that consumption models push us toward higher resource utilization and create immediate feedback loops between engineering decisions and costs—reinforcing the financial thinking mindset.
While FinOps principles apply broadly across tech organizations, their adoption becomes particularly crucial—and often mandatory—in certain business contexts. Private equity ownership represents perhaps the clearest example of how financial awareness shifts from optional to essential, with FinOps practices becoming a cornerstone of engineering operations rather than just a nice-to-have capability:
At my current employer, we experienced a significant shift when we were acquired by private equity. Suddenly, the focus on return on investment and operational efficiency became much more pronounced.
Many PE firms define specific target operational models with clear financial parameters. Department sizes are often strictly managed with headcount targets that expect net-zero growth—any new role typically needs to be balanced by efficiency gains elsewhere. It directly impacts your ability to staff projects and address technical challenges.
These ownership structures amplify the visibility of opportunity costs, as limited resources mean any technical investment directly affects another potential initiative. This leads to fundamental shifts in engineering approaches:
This transition is rarely smooth. Many engineers are accustomed to optimizing primarily for technical quality and throughput—not cost. But the best engineers adapt quickly, recognizing that constraints often drive innovation.
The stakes become quite personal: While revenue growth remains the expectation, the key success metric shifts to ensuring this growth outpaces operational costs. If not, margin pressure can trigger uncomfortable consequences like reduced merit increases, limited growth opportunities, or in worst cases, layoffs. This isn't abstract corporate finance—with performance bonuses often directly tied to revenue and EBITDA targets, engineers suddenly find financial awareness impacting their own compensation.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures a company's operational profitability without accounting for financial decisions or tax environments.
Let me be clear: this shift focuses on sustainability, not penny-pinching. Under PE ownership, having ROI top-of-mind isn’t optional—it becomes a non-negotiable requirement for engineering teams to maintain credibility and influence. The reality of today’s economic climate means engineering organizations must connect technical decisions to business outcomes or they’ll increasingly struggle to justify their existence.
Having explored how ownership structures like private equity and cloud economics intensify the need for financial awareness, the obvious question arises: How do we maintain our innovative edge while operating within these financial constraints? While reducing costs is a important challenge, the actual key is optimizing for the right combination of innovation and efficiency:
Technical excellence and financial responsibility are complementary aspects of engineering maturity. Finding the right balance requires nuanced thinking about when to optimize for cost and when to invest for the future. This section explores how to navigate these tensions and make decisions that serve both technical and business needs.
Wielding the “revenue-sword” as your only tool will quickly earn you disrespect from engineering teams. Similarly, allowing engineers to build overblown “money-burners” without constraints damages your credibility with business stakeholders.
The key is understanding the business context and strategy first, then using that knowledge to shape the solution space collaboratively with engineers. This approach allows you to:
Navigating these tensions requires both tactical awareness and strategic thinking. Using concepts like a simple value chain or a more sophisticated Wardley Map7 can help—understanding where components sit on the evolution axis helps determine appropriate investment levels. Core infrastructure that supports multiple visible features often justifies higher investment, even if the immediate ROI is less obvious.
An example of a classifieds marketplace. A Wardley Map can be a great tool to kickstart discussions around investment levels.
Wardley Mapping is a strategic technique that visualizes the evolution of technology components from novel to commodity. It helps engineers prioritize where to invest effort—custom-building components that provide competitive advantage while efficiently standardizing those that don’t.
Financial awareness becomes harmful when it leads to short-sighted decisions like:
True financial maturity means knowing where cost control matters and where investment is essential.
Having explored how ownership structures like private equity intensify the need for financial awareness, the obvious question arises: How do we maintain our innovative edge while operating within these financial constraints? While reducing costs is a important challenge, the actual key is optimizing for the right combination of innovation and efficiency:
There are definitely times when spending more is the right engineering choice:
Research shows that companies maintaining strategic investments during economic downturns often emerge stronger when markets recover.8 The key is distinguishing between wasteful spending and strategic investment.
Critics of financially-driven engineering often argue that excessive focus on costs leads to short-term thinking and technical compromise. There’s legitimate truth here—Organizations optimize themselves into technical corners that ultimately cost far more to escape from.9 However, this represents a misapplication of financial awareness rather than a flaw in the principle itself.
True financial maturity recognizes that some technical investments defy simple ROI calculations. Engineering practices like automated testing, comprehensive observability, and architectural modernization often deliver their value through risk reduction and opportunity creation rather than direct cost savings. These investments require a more sophisticated financial lens that accounts for risk-adjusted returns.
Now that we’ve established why financial awareness matters and explored its various dimensions in engineering decisions, let’s shift our focus to practical application. How can you begin developing this mindset regardless of your current expertise level? The journey from theoretical understanding to practical financial awareness starts with simple but powerful steps.
Moving from theoretical understanding to practical application requires specific tools and approaches. Whether you’re just starting to think financially or looking to enhance your existing practices, these implementation strategies will help you integrate financial awareness into your daily engineering work.
If you’re completely new to financial thinking in engineering, here’s a practical approach I’ve found useful:
While maintenance and complexity are topics that us engineers often talk and think through, we rarely do it through a financial eye. This exercise often reveals surprising insights—sometimes architectures with similar functionality have vastly different cost profiles. Even when the differences are minor, this practice builds the muscle of considering financial implications alongside technical ones.
Just as we track technical metrics and user impact, engineering teams should integrate financial metrics into their practices:
Sprint-Level Cost Tracking:
Quarterly Reviews:
Post-Mortems with Financial Context:
My goal here isn’t to create a culture of fear around spending. Instead, I want us to bring the same thoughtfulness to financial impact that we naturally apply to technical decision-making.
Common Pitfalls to Avoid:
Financial Awareness Self-Assessment:
To strengthen your financial engineering awareness, consider these resources:
Cost Visibility Tools:
Decision Frameworks:
Communication Templates:
The type of financial awareness needed varies significantly by engineering role:
SRE/DevOps Engineers: These roles typically have direct visibility into what actually costs money—the infrastructure itself. They’re often closest to the resource utilization metrics and spending patterns.
Backend Engineers: Architecture decisions at this level directly influence infrastructure requirements. The data storage patterns, processing approaches, and scalability models they choose drive downstream costs.
Frontend Engineers: While seemingly further from infrastructure costs, frontend decisions about asset sizes, client-side processing, and API call patterns can significantly impact backend resource needs.
Generally, the further down you are in the value chain (closer to infrastructure), the greater understanding you should have of costs, as your decisions will have cascading impacts upstream. But all engineers should have at least a basic understanding of how their work affects the bottom line.
Across all these company types and roles, I’ve found one principle holds true: engineering decisions made without considering financial impact remain fundamentally incomplete. This doesn’t push you toward always choosing the cheapest solution—rather, it empowers you to make conscious tradeoffs with full awareness of cost implications.
Once you’ve begun implementing financial awareness in your own work, the next challenge is extending this mindset beyond your individual contributions. Moving from personal practice to organizational impact requires navigating diverse contexts and sometimes difficult conversations. Even the most financially sound engineering decisions can face resistance, misunderstanding, or competing priorities from different stakeholders. As you develop your technical and financial toolkit, you’ll need complementary skills to advocate for financially responsible approaches across various organizational environments:
Financial awareness doesn’t exist in a vacuum—it happens within specific organizational contexts and conversations. Different environments require different approaches, and effectively communicating financial thinking can be as important as the thinking itself. Let’s explore how to adapt these principles to various situations and advocate effectively for financially sound engineering.
The financial awareness needed by engineers varies across organization types, though the principles remain consistent:
Bootstrapped Startups: In organically growing companies, every cent spent on infrastructure directly impacts runway. Engineers in these environments need to be ruthlessly pragmatic, often choosing "good enough" solutions that preserve capital for growth.
Private Equity-Owned Companies: These organizations typically focus on operational efficiency and EBITDA improvement. Engineers need to frame technical investments in terms of measurable returns, often with shorter time horizons.
Enterprise Organizations: Larger companies operate with more complex budget cycles and CapEx/OpEx considerations. Engineers need to understand the difference between capital and operational expenditures and how budget cycles impact project approvals.
CapEx vs. OpEx: Capital Expenditures (CapEx) are major purchases that will be used long-term, while Operational Expenditures (OpEx) are ongoing costs to run the business. This distinction matters for engineering decisions because many organizations budget differently for these categories, often finding it easier to approve OpEx.
Introducing financial awareness into engineering practices isn’t without challenges. Common resistance patterns include:
The Ownership Barrier: In many organizations, infrastructure decisions are controlled by specialized teams (like SRE) who may restrict technology choices. This can create friction when engineers want to experiment with new approaches.
The Innovation vs. Cost Dilemma: Too much focus on cost can artificially constrain the solution space. For example, I’ve encountered situations where we were discouraged from creating separate development environments due to cost concerns, despite their value for exploration.
The Technical Debt Justification Challenge: Long-term investments in code quality can be difficult to justify when benefits are diffuse and costs are immediate.
When you encounter resistance or disagreements about the financial value of technical work:
This approach builds trust and positions you as a thoughtful partner rather than someone defending their technical territory.
Engineers who consistently demonstrate this awareness:
Most importantly, they future-proof their careers in an increasingly cost-conscious tech economy.
Throughout this article, we’ve explored how financial awareness transforms engineering practice—from individual technical decisions to organizational contexts. Having seen how this mindset applies across different environments, let’s now examine the ultimate impact of financially-aware engineering:
What’s the ultimate outcome of developing financial awareness as an engineer? This section examines how this mindset transforms not just your technical decisions, but your overall impact and career trajectory. We’ll look at both immediate benefits and long-term advantages of approaching engineering with financial awareness.
I want to emphasize this core message: Financial thinking is about making strategically sound decisions, not about cutting corners.
Engineers who consistently demonstrate financial awareness:
future-proof their careers in an increasingly cost-conscious (and AI powered) tech economy
At any career stage—from junior developer to staff engineer—developing financial awareness will amplify your impact. You don’t need to become an accountant; you simply need to bring business context to your technical decisions.
Thanks for making it to the end. I hope you like the content.
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