This is post 2 of 5 of the Cloud Financial Management in AWS series by guest contributor Vikash Kumar. If this is your first encounter with this series, you may want to check out the first post in the series, “Best Practices for Cloud Financial Management in AWS”, before this one!

Before it’s possible to identify opportunities for reducing costs, an organization must have a good understanding of its current costs, as well as the business factors that drive those costs. However, because one company will often have multiple organizational units that each operate their own cloud workloads, each with its own revenue stream, company-wide cost optimization can be a challenge.

This post will explain some of the best practices an organization can apply to accurately monitor costs and resource usage in their cloud environments on AWS. In the following sections, we’ll look at the ways you can assess the portability of your organization’s cloud infrastructure between products and business units, make informed decisions about resource allocation, and use your organization’s funds efficiently.

Create Policies Aligned with Organizational Needs

Managing resource usage and cost at the organizational level requires cost-management policies to be implemented at the organizational level. These policies should define how resources are to be managed within the organization, including the cost considerations and operational requirements that should be applied to any given workload.

Generally speaking, such policies should detail the process of developing, altering, and decommissioning cloud resources over their entire lifecycle. Applied across an entire organization, this practice helps companies have processes in place to meet all their needs and helps avoid allocating resources to unnecessary tasks.

Risk from Not Establishing this Practice

Without a baseline understanding of an organization’s needs and a shared process for allocating resources, it’s impossible to have a comprehensive idea of the organization’s resource usage or optimize those costs.

Implementing this Practice

To put your organization in a better position to reduce expenses and understand how its resources are utilized, consider the following when developing the policies that form the basis of your cloud financial management strategy.

Configure Detailed Information Sources

To help make effective cost-optimization decisions about your AWS infrastructure, you should configure the relevant data sources on AWS, including the Cost Explorer and the Cost and Usage Report tools. From the perspective of understanding cost drivers, it is also useful to configure each workload to create log entries for different business outcomes.

Risk from Not Establishing this Practice

High. Detailed data is necessary to make informed decisions about your resource usage.

Implementing this Practice

To leverage high-quality information in your cost-optimization decision making, consider the following best practices for more effective data source configuration.

Track Resources

To effectively plan infrastructure expenditure and build cost awareness across your organization, it’s critical to track all resources over their whole lifecycle. Ensure that your team comes to a consensus on the method you’ll define and implement to track resources and their associations with workloads and roles.

One method that works well for many organizations is to develop a tagging scheme to identify the function or associated workload for each resource.

Risk from Not Establishing this Practice

High. Without maintaining an understanding of the resources your organization currently has deployed—and how those resources are being used—it becomes impossible to share resources effectively between organizational units.

Implementing this Practice

To implement an effective method for tracking your AWS resources, keep the following practices in mind:

Implement a Decommissioning Process

Finally, one important practice necessary to building awareness of AWS cost and usage within the organization is implementation of a process for identifying and decommissioning unused resources.

Risk from Not Establishing this Practice

High. Without an established method for releasing unnecessary resources, your organization risks unnecessary expenditures—and unnecessary downtime when an ad hoc workload decommissioning encounters unexpected problems.

Implementing this Practice

To enable an organization to decommission unused resources and manage workloads over the long term, keep the following best practices in mind when developing your decommissioning process.

Conclusion

For an organization that wishes to build awareness of its AWS expenditures and usage, the multi-faceted approach described above can be very beneficial. These best practices allow organizations to gather the necessary data about their resource usage, analyze their workloads, and report the results of the analysis accordingly. Beyond helping you to monitor expenditures, the approach described here will help you understand how to create effective policies, track resources, and implement a decommissioning procedure to optimize resource usage.

Written by Vikash Kumar of TatvaSoft

Vikash has a rich experience in digital content publications and you will find his many by-lines published in many reputed publications.