COST01-BP04 Implement cost awareness in your organizational processes - AWS Well-Architected Framework (2023-04-10)

COST01-BP04 Implement cost awareness in your organizational processes

Implement cost awareness, create transparency, and accountability of costs into new or existing processes that impact usage, and leverage existing processes for cost awareness. Implement cost awareness into employee training.

Level of risk exposed if this best practice is not established: High

Implementation guidance

Cost awareness must be implemented in new and existing organizational processes. It is one of the foundational, prerequisite capabilities for other best practices. It is recommended to reuse and modify existing processes where possible — this minimizes the impact to agility and velocity. Report cloud costs to the technology teams and the decision makers in the business and finance teams to raise cost awareness, and establish efficiency key performance indicators (KPIs) for finance and business stakeholders. The following recommendations will help implement cost awareness in your workload:

  • Verify that change management includes a cost measurement to quantify the financial impact of your changes. This helps proactively address cost-related concerns and highlight cost savings.

  • Verify that cost optimization is a core component of your operating capabilities. For example, you can leverage existing incident management processes to investigate and identify root causes for cost and usage anomalies or cost overruns.

  • Accelerate cost savings and business value realization through automation or tooling. When thinking about the cost of implementing, frame the conversation to include an return on investment (ROI) component to justify the investment of time or money.

  • Allocate cloud costs by implementing showbacks or chargebacks for cloud spend, including spend on commitment-based purchase options, shared services and marketplace purchases to drive most cost-aware cloud consumption.

  • Extend existing training and development programs to include cost-awareness training throughout your organization. It is recommended that this includes continuous training and certification. This will build an organization that is capable of self-managing cost and usage.

  • Take advantage of free AWS native tools such as AWS Cost Anomaly Detection, AWS Budgets, and AWS Budgets Reports.

When organizations consistently adopt Cloud Financial Management (CFM) practices, those behaviours become ingrained in the way of working and decision-making. The result is a culture that is more cost-aware, from developers architecting a new born-in-the-cloud application, to finance managers analyzing the ROI on these new cloud investments.

Implementation steps

  • Identify relevant organizational processes: Each organizational unit reviews their processes and identifies processes that impact cost and usage. Any processes that result in the creation or termination of a resource need to be included for review. Look for processes that can support cost awareness in your business, such as incident management and training.

  • Establish self-sustaining cost-aware culture: Make sure all the relevant stakeholders align with cause-of-change and impact as a cost so that they understand cloud cost. This will allow your organization to establish a self-sustaining cost-aware culture of innovation.

  • Update processes with cost awareness: Each process is modified to be made cost aware. The process may require additional pre-checks, such as assessing the impact of cost, or post-checks validating that the expected changes in cost and usage occurred. Supporting processes such as training and incident management can be extended to include items for cost and usage.

To get help, reach out to CFM experts through your Account team, or explore the resources and related documents below.

Resources

Related documents:

Related examples: