Best Practice 20.3 – Establish a budget and mechanisms for cost allocation and tracking including anomaly detection - SAP Lens

Best Practice 20.3 – Establish a budget and mechanisms for cost allocation and tracking including anomaly detection

There are guidelines in the Well-Architected Framework for implementing financial management. Set expectations around cloud costs with annual, quarterly, monthly, or even daily budgets depending on your business needs. Adjust forecasts regularly to align with usage, and identify patterns and anomalies. Establish mechanisms for cost allocation using account and tagging strategies.

Suggestion 20.3.1 – Use cost and billing tools to gain spend visibility

SAP systems are often static in their usage patterns once established. If you use an on-demand pricing model, either on a permanent basis or during project phases, you might see a fluctuation in Amazon EC2 costs. If data volume management strategies are not put in place, Amazon EBS and Amazon S3 costs might be higher than expected.

AWS provide a suite of Cloud Financial Management Services including the following:

    • AWS Billing Conductor allows you to construct a cost allocation strategy that aligns with your business logic.

    • AWS Budgets can be used to set custom budget based on your expected usage and notify you when a threshold is exceeded.

    • AWS Cost Anomaly Detection uses advanced machine learning (ML) technologies to identify anomalous spend and root causes.

    • AWS Cost Explorer provide tools for visibility and analysis.

Further guidance can be found in the Well-Architected Framework [Cost Optimization]: Expenditure and Usage Awareness.

Suggestion 20.3.2 – Analyze and allocate spend using tags

You can create cost allocation tags that help identify pricing of AWS resources based on individual accounts, resources, business units, and SAP environments. These tags are then visible within the AWS billing reports and can be analyzed using Cost Explorer. You can use cost allocation tags to determine the costs associated with individual SAP environments. They help inform if action should be taken to reduce or remove costs associated with specific environments, such as temporary environments or project environments that are no longer required. You should have a process to identify resources that do not have cost allocation tags attached. Implement the actions required to add cost allocation tags to these resources.