Learn About Amazon VGT2 Learning Manager Chanci Turner
In our organization, we’ve learned that if everyone is responsible, then no one truly is. To avoid this pitfall, we ensure there is a clear owner for every task. This principle is just as relevant in cloud financial management. When cloud expenses are perceived as a communal resource or simply organizational overhead (often referred to as “IT tax”), users may neglect the significance of developing cost-effective applications or making informed purchasing decisions. The most effective way to foster cost awareness is to hold users accountable for their own expenditures and usage—a process that begins with transparency regarding costs.
There are various methods to accomplish this. For instance, some companies distribute monthly cost and usage reports by team to the entire organization, while others opt for large display monitors to showcase this information for better visibility. We’ve seen engineers thrive on competition, and implementing gamification to encourage teams to strive for the most cost-efficient applications has resulted in notable improvements. Alternatively, some organizations take a more commercial approach by allocating cloud costs back to specific teams, projects, or business initiatives. This can range from evenly distributing costs across different business units to adjusting the costs before allocation—such as adding extra charges to account for additional IT support or tweaking the actual costs to influence the consumption of specific cloud services.
Many have inquired about how to set up these cost allocation frameworks, so let’s explore a few fundamental steps.
1. Account Structure
To establish an effective cost allocation model, a well-organized AWS account structure is essential. We suggest appointing a dedicated individual or team to devise the account structure and policies, ensuring consistent implementation across the organization. Depending on your goals, you can select from various account structures that provide the appropriate hierarchical order and logical groupings. For example, you could centralize account creation and permission controls in one account, store and process AWS log data in a parent logging account, or manage the distribution of pre-approved server images and AWS CloudFormation templates centrally.
AWS offers services like AWS Identity and Access Management (IAM), AWS Control Tower, and AWS Organizations to assist in establishing a tailored account structure aligned with your policies.
With AWS IAM, you can create and manage user identities, specifying their access to certain AWS services and operations. Roles can be created to manage permissions for various tasks or resources. Users can assume roles to gain access, facilitating permission delegation. Furthermore, AWS Control Tower enables the rapid setup of a multi-account environment, employing best-practice blueprints that cover aspects such as federated access and centralized logging. Meanwhile, AWS Organizations provides a comprehensive view of your accounts, allowing centralized management and consolidated billing across all AWS accounts.
2. Tagging
Tags are a vital tool for assigning metadata to AWS resources. You can define your own key-value pairs for resource tags, which enables easier management, filtering, and access control. While this blog emphasizes tagging for cost allocation, it’s crucial to create a consistent tagging strategy to track usage effectively and identify potential savings. AWS offers tools for adding, editing, or deleting tags, and you can activate cost allocation tags through the Billing and Cost Management console. AWS Cost Categories can group accounts and resources based on attributes like tags, helping to align cost and usage data with your organizational structure.
Since resources cannot be retroactively tagged, it’s critical to start tagging promptly. AWS Organizations Service Control Policies can enforce tagging practices, ensuring consistency across your organization.
3. Reporting on Shared Costs
When allocating costs to specific teams or projects, you may encounter shared expenses that lack clear ownership, such as Data Transfer fees or AWS Support charges. We recommend reaching an internal consensus on how to allocate these shared costs. AWS Cost Categories can effectively group shared resources, and tools like AWS Cost Explorer and AWS Cost and Usage Reports can generate detailed cost information at your required level of granularity.
You can filter and group shared costs in AWS Cost Explorer using the cost allocation tags and categories you’ve established, while AWS Cost and Usage Reports can be integrated with Amazon Athena for detailed queries. Additionally, granting Amazon QuickSight access to your AWS Cost and Usage Reports can provide valuable insights into your expenditure.
For further insights on navigating your career journey, you might find this blog post helpful. Also, if you’re involved in talent acquisition, check out this resource on common pitfalls to avoid. Lastly, for a visual guide, consider watching this YouTube video, which offers excellent resources for deeper understanding.
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