Establish organization metrics

Establishing organization metrics is vital for understanding usage patterns and their cost implications. This helps your team allocate resources effectively and ensures transparency in financial management, enabling ongoing analysis and adjustments to optimize costs.

Best Practices

Establishing Metrics for Cost Optimization

• Define key performance indicators (KPIs) that align with your business objectives, such as cost per customer report produced or cost per web page served.
• Use AWS tools like Cost Explorer and AWS Budgets to track your costs against these established metrics.
• Regularly review and analyze the data from AWS billing reports to identify trends and opportunities for cost savings.
• Incorporate metrics into your organizational culture by sharing findings with relevant stakeholders to raise awareness and drive accountability.
• Set up automated alerts for any unexpected spikes in cost to take immediate corrective action.

Questions to ask your team

• What metrics are currently being used to track cost efficiency for this workload?
• How often are these organization metrics reviewed and updated?
• Are there any specific customer reports or performance indicators that reflect cost management?
• Is there a system in place to allocate costs to specific departments or teams?
• How do you ensure that all stakeholders are aware of and understand these metrics?
• What tools or dashboards are utilized to visualize and analyze these metrics?

Who should be doing this?

Cost Optimization Manager

• Establish organization metrics required for cost monitoring.
• Define key performance indicators (KPIs) related to costs and usage.
• Regularly review and assess cost allocation processes.
• Collaborate with finance teams to align metrics with organizational goals.
• Report on cost efficiency improvements to stakeholders.

Cloud Financial Analyst

• Monitor AWS cost and usage reports.
• Analyze financial data to identify cost-saving opportunities.
• Prepare detailed reports on cost metrics and trends.
• Assist in budgeting and forecasting processes.
• Support team members in understanding cost implications of their workloads.

DevOps Engineer

• Implement tagging policies to better allocate cost across services.
• Ensure metrics are integrated into CI/CD pipelines for continuous visibility.
• Collaborate with the Cost Optimization Manager to ensure workload efficiency.
• Automate reports and alerts related to cost anomalies.
• Maintain documentation related to cloud cost structures and metrics.

Project Manager

• Oversee initiatives to establish organization metrics.
• Ensure cross-functional teams are aligned on cost optimization goals.
• Facilitate regular meetings to discuss cost optimization strategies.
• Manage timelines and deliverables related to cost management initiatives.
• Coordinate training sessions for team members on cost efficiency practices.

What evidence shows this is happening in your organization?

• Cost Monitoring Dashboard: An interactive dashboard that visualizes cost and usage metrics across various AWS services, allowing teams to monitor spending in real-time and analyze trends.
• Cost Allocation Policy Template: A template outlining the procedures for allocating and monitoring costs across different departments and projects, ensuring accountability for cloud expenditure.
• Monthly Cost Review Report: A comprehensive report generated monthly that outlines total AWS costs, usage compared to budget, and key performance indicators related to cost efficiency.
• Cost Metrics Checklist: A checklist of key metrics to monitor for cost optimization, including customer reports produced and web pages served, which helps assess the financial impact of cloud services.
• Cost Optimization Strategy Guide: A guide providing strategies for improving cost efficiency, including best practices for monitoring usage and adjusting resources based on organization metrics.

Cloud Services

AWS

• AWS Cost Explorer: Provides a set of tools to analyze your cost and usage data, allowing you to view trends, forecast future costs, and identify areas for savings.
• AWS Budgets: Helps you set custom cost and usage budgets that alert you when you exceed your limits, enabling better financial control.
• AWS CloudWatch: Monitors AWS resources and applications in real time, providing metrics that can help correlate usage with cost, enhancing visibility of your expenses.

Azure

• Azure Cost Management + Billing: Allows you to track and analyze your cloud costs across Azure services, providing insights for better budget management and cost allocation.
• Azure Advisor: Offers personalized best practices and recommendations for optimizing your Azure resources and can help analyze your spending patterns.
• Azure Monitor: Collects and analyzes telemetry data from your cloud environment, helping you understand performance and related costs better.

Google Cloud Platform

• Google Cloud Billing Reports: Provides detailed insights into your Google Cloud costs and usage, enabling you to track spend against the allocated budget effectively.
• Google Cloud Cost Management: Helps you to set budgets, monitor expenditures, and analyze your usage patterns, which in turn can lead to improved cost optimization strategies.
• Google Cloud Operations Suite (formerly Stackdriver): Monitors and manages cloud performance data, which includes billing metrics to help correlate application usage with costs.

Question: How do you monitor your cost and usage?
Pillar: Cost Optimization (Code: COST)