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Implement goals and targets

Establishing clear cost and usage goals as well as measurable targets is critical for effective governance. This approach allows teams to align their innovations with financial responsibilities, ensuring that spending is optimized and that the organization stays on track to meet its objectives without excess expenditure.

Best Practices

  • Establish Clear KPIs: Define Key Performance Indicators (KPIs) that specify both cost expectations and usage patterns. This enables stakeholders to monitor performance against defined targets, fostering accountability and promoting cost-effective decision-making.
  • Regular Reporting and Review: Implement a regular cadence for reviewing cost and usage reports. Set intervals for assessments to compare actual performance against established targets, allowing adjustments to be made proactively to meet financial goals.

Supporting Questions

  • Are your teams aware of the established cost and usage goals?
  • How often do you review progress towards these targets?

Roles and Responsibilities

  • Product Manager: Responsible for defining product roadmaps that align with cost optimization goals and for communicating expectations around cost management across teams.
  • Finance Team: Oversees financial metrics, providing insights on budget adherence and facilitating discussions around cost implications of project decisions.

Artifacts

  • Cost Management Dashboard: A visualization tool that displays real-time data on cost and usage, enabling teams to assess their performance against goals and targets effectively.
  • Budget Projection Documents: Detailed documents outlining expected costs for upcoming projects or workloads, serving as a benchmark for evaluating actual spending.

Cloud Services

AWS

  • AWS Budgets: Allows users to set custom cost and usage budgets, providing alerts when thresholds are exceeded. This enables teams to proactively manage spending and remain within financial targets.
  • AWS Cost Explorer: Offers visualization features for discovering patterns and insights in spending, facilitating the achievement of established financial goals through data analysis.

Question: How do you govern usage?
Pillar: Cost Optimization (Code: COST)

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