How Allocation and Visibility Drive Cost Accountability

Published on 04 Mar 2023

cloud, billing, cloud, financial, management

A thorough understanding of your cloud use and expenses is essential for maximizing your Amazon Web Services (AWS) cloud capability.

To accomplish this objective, everyone from finance to technology to business leaders must understand where and by whom expenses are being created. When you correctly map cloud expenses to company owners, you can make smart, well-informed choices on your AWS investment. Without it, you can only pay the bill and hope for the best.

In this eBook, you will learn about developing an allocation strategy, fostering a cost-aware culture, and how the proper solution may give your business the visibility and accountability it requires.

Billing in the cloud is a massive data problem.

The development of the public cloud has given us a remarkable chance to delegate.  Infrastructure expenses are charged back to the firm depending on use.  Very detailed billing data are fundamental to this potential  and continuously updated during the month. It is useful to evaluate how customers are provided with this knowledge and the issues posed by its scope.

Amazon offers a monthly comprehensive invoicing file known as the AWS Cost and Usage Reports (AWS CUR), in which a separate row represents each resource for each hour. This might be something well-known, such as Amazon Elastic Compute Cloud (Amazon EC2) instance cost, or something more esoteric, like the cost of Amazon CloudWatch custom metrics. Due to the magnitude of cloud infrastructure, it is typical for problems to occur. The billing files will have tens or hundreds of millions of rows.

Each row may have up to 120 or more attribute columns, and if you have a solid plan in place, you can utilize them to distribute your expenditures precisely.

With so much data involved with cloud spending, it may require more work to correlate expenses with the business value delivered properly. Spreadsheets can only handle so much information before they become hard to maintain and evaluate.

Customers' need for total visibility into AWS consumption necessitates a system capable of handling such huge and complicated data requirements.

Building a cloud financial management practice is crucial.

It is advantageous to establish a financial operations (FinOps) team comprised of people from finance, engineering, development, operations, and lines of business to have real insight into your organization's cloud cost.

The ultimate objective is for everyone to comprehend the relationship between real infrastructure, infrastructure expenses, and business objectives to make better-educated choices.

This multidisciplinary committee decides on a cost distribution structure and regulations that may organize AWS expenses in business-relevant ways. This provides each stakeholder with unique insight into their area of interest.

You must design a structure that aligns with how your organization thinks. Do you need to categorize expenditure categories as cost of goods sold (COGS) against operating costs (OPEX) or by service, application, project, team, or business unit? All of them will be feasible, and the foundations for establishing them are often accounts and resource tags, the two most important billing features.

The first layer of allocation

This core account and resource tag structure is crucial.

Let's begin with the tags.

Tags are metadata labels (consisting of a key and a value) that you apply to document your resources. The key is analogous to the column header in a spreadsheet and is associated with a value. Imagine describing a collection of clothes. Each shirt has a color key followed by a red, blue, or green value.

With this technique for classifying and arranging your infrastructure, you may organize your Amazon resources into several buckets. In actuality, it makes no difference whatever key and values you use. To Amazon, tags are character strings with no semantic significance. Tags only have significance for you. It is crucial that your tag strategy revolves around your company processes.


Download AWS's whitepaper to learn more about cloud billing and cloud financial management only on Whitepapers Online.



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