Generally, these rules are no different than those that govern your on-premises. However, one ought to ignore the nuances that a cloud brings in. These rules are termed cloud governance rules. Let’s dive deeper into what this aspect is all about.
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Cloud Governance Encapsulated
With the increasing cloud integration, it is easy to get carried away. However, one should write down rules to propel their business in the long run. These rules should address how the budget is allocated to the concerned departments.
The organization should stipulate which software can be used by which department and prescribe the circumstances for software usage. However, it is pertinent to acknowledge that, although cloud governance is a set of guidelines, one should be flexible, as the real-time environment introduces various unknown factors.
After setting the rules, one should monitor whether the users comply. Monitoring compliance helps you assess security risks and prevent financial losses. Furthermore, it lets you plan how to proceed with your cloud journey.
Factors to consider before deciding the governance strategy
Before drafting policies, create a current-state view of:
- Inventory and topology: accounts, subscriptions, projects, VPCs/VNets, regions, data residency.
- Identity and access: roles, group mappings, cross-account trusts, service principals.
- Tagging and allocation: coverage for cost centers, products, environments; % of spend allocated to business owners. (Only ~22% of companies allocate ≥75% of cloud costs today; most organizations still lack granular attribution.)
- Security posture: baseline to CIS Benchmarks, drift from desired state, open high-severity findings (CSPM/CNAPP/CIEM).
- Compliance scope: ISO 27001, SOC 2, PCI DSS, HIPAA, SOX, FedRAMP, and data retention.
- Reliability and recovery: SLOs, RTO/RPO, backup, and DR patterns.
Also align to reference models (e.g., NIST Cloud Computing Reference Architecture) to clarify roles and control responsibilities.
Also Read: Cloud Implementation Services: Strategy, Solutions and Benefits
A Practical Cloud Governance Framework
Use these domains to structure policies and automate enforcement:
1) Strategy and Operating Model
Define ownership, decision forums, and a Cloud Center of Excellence (CCoE). Establish a service catalog, onboarding blueprints, and an approval workflow for new cloud services.
2) Financial Governance (FinOps)
Ties spend to value with unit economics (e.g., cost per transaction, per customer, per model inference). Drive showback/chargeback and align budgets to product P&L. The FinOps Foundation emphasizes measuring unit costs to connect engineering to business performance.
3) Identity and Access Management
Enforce least privilege and zero trust. Centralize identity, mandate MFA, time-bound elevated access, and just-in-time approvals. Misconfigurations remain the primary cause of cloud security failures. Gartner has long projected that through 2025, the vast majority of cloud security failures are customer-side.
4) Data Governance and Privacy
Classify data, set encryption requirements (in transit, at rest, and in use), manage keys (KMS/HSM, BYOK), define retention and deletion, and enforce data residency by region.
5) Platform and Landing Zone
Standardize multi-account structures, network segmentation (hub-and-spoke), baseline images, and golden patterns for VMs, containers, and serverless.
6) Security and Compliance
Codify controls as policy: CSPM baselines, workload scanning, SBOM, secrets management, key rotation, DLP, SIEM/SOAR integration, and audit logging. Tie controls to frameworks (ISO 27001, SOC 2, PCI DSS, HIPAA) and automate evidence capture.
7) Reliability and Resilience
Mandate SLOs, chaos testing, backups, cross-region DR, and recovery runbooks. Track error budgets and change failure rate.
8) Observability and Auditability
Standardize metrics, logs, traces, and retain immutable audit trails (e.g., CloudTrail, Azure Monitor, Cloud Logging). Provide role-based dashboards.
9) Cost Optimization and Performance
Rightsize, autoscale, eliminate idle resources, schedule non-prod off hours, commit coverage (RIs/Savings Plans), and drive architectural efficiency.
10) DevSecOps and Change Management
Integrate security and cost checks into the CI/CD pipeline. Require IaC (Terraform, Bicep, Pulumi), drift detection, and peer reviews. Promote reusable modules with guardrails.
11) Third-Party and SaaS Governance
Assess vendors for data handling, identity integration, egress exposure, and incident SLAs; maintain a sanctioned service list.
12) AI and Model Governance
Register models, track datasets and lineage, define access policies for prompts/contexts, and monitor usage to prevent shadow AI and leakage. Breach costs remain significant. IBM’s 2025 study puts the global average at $4.4M per breach, with higher impacts for US-based incidents.
Best Practices for the Optimal Cloud Governance
We have listed the cloud governance best practices for efficient, secure, and compliant cloud management.
1) The Governance Policy Must Complement Your Business Objectives
When setting down a policy, one often tends to adopt a rigid approach. However, the policy should be agile and stipulate boundaries that are never to be exceeded. The agile policy should enable you to achieve your goals without compromising security concerns or other critical aspects. Once the business objectives are listed, tailoring a policy won’t be a herculean task.
One should not forget to keep the policy flexible, as unknown variables occasionally emerge.
Tracking the policy’s impact on expenses is pertinent for trimming costs. If the policy’s purpose is defeated, molding it to suit the requirements should be a priority.
2) Identity Access Management
Security breaches increase costs and erode morale. A robust program and project access governing policy will stave off potential and definitive risks. The organization should have a defined approach to this aspect. Never adopt an elastic and ignorant identity policy, for it will only lead to various breaches.
3) Automation is a Vital Factor
Automating routine security tasks will reduce risks. By reducing the scope for human error, the organization can enjoy optimal security. The automation, as stipulated by the governing policy, will run checks to ensure the software is used and deployed by the organization’s compliance policy. In short, automation features will be the governing policy watchdog.
4) Track the Compliance
Having a policy but not practicing it is as good as not having it at all. An audit would be wise, as it lowers the potential for definitive risks. The audit should cover both your organization’s users and external users, such as consultants. The governance policy should also define when and how an audit should be implemented.
5) Chalk Out Data Storage Policy
Research and Development information, proprietary software, source codes, and project files should be adequately secured. After deliberation, devise a storage policy that securely stores your data. This policy gives you peace of mind; automation can prompt users to store as the organization stipulates.
Cloud Governance KPIs That Matter
Track a mix of leading and lagging indicators:
- Security: mean time to remediate (MTTR) policy violations, % high-severity findings open >30 days, privileged accounts without JIT.
- Cost: % of spend allocated, unit cost by product/feature, RI/Savings Plans coverage, rightsizing rate, and idle resource elimination rate. (Unit cost measurement is a core FinOps capability.)
- Reliability: change failure rate, SLO compliance, backup success rate, and DR exercise pass rate.
- Compliance: control test pass rate, evidence freshness, exception backlog, and age.
Case Study: Implementing Cloud Governance for an Airline’s Enterprise Cloud Infrastructure
Veritis partnered with a major airline to deliver enterprise-scale infrastructure automation and orchestration on a public cloud platform. As part of the engagement, Veritis established comprehensive and robust cloud governance frameworks that covered every aspect of cloud management, from identity and access management (IAM) to resource tagging, cost controls, and compliance monitoring. These practices ensured operational consistency, minimized risk, and improved visibility across the client’s complex, multi-tier cloud environment.
This case illustrates how effective cloud governance enables enterprises to scale cloud adoption while also significantly enhancing operational efficiency, security, and cost awareness.
Read the complete case study: Infrastructure Automation and Orchestration for Airlines Client.
Final thoughts
Although the cloud is about expanding your business potential and profitability, influential tech brings challenges. To mitigate these challenges, it is essential not to skip or postpone the governance policy. Cloud governance may hinder productivity, but having the protocols streamlines production.
It is wise to upgrade the cloud governance policy in iterations. As the company evolves, government policy enforcement should be prioritized as multiple people access data files.
If you’re looking for expert guidance on cloud governance or need assistance with your cloud consulting services, veritis offers tailored solutions to help you navigate the complexities of cloud adoption, ensuring your organization stays ahead of the curve.
