COST03-BP05 Configure billing and cost management tools - Cost Optimization Pillar
Implementation guidance Resources

COST03-BP05 Configure billing and cost management tools

Configure cost management tools that meet your organization's policies to manage and optimize cloud spending. This includes services, tools, and resources to organize and track cost and usage data, enhance control through consolidated billing and access permission, improve planning through budgeting and forecasts, receive notifications or alerts, and lower cost with resources and pricing optimizations.

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

Implementation guidance

To establish strong accountability, consider your account strategy first as part of your cost allocation strategy. Get this right, and you may not need to go any further. Otherwise, there can be unawareness and further pain points.

To encourage accountability of cloud spend, grant users access to tools that provide visibility into their costs and usage. AWS recommends that you configure all workloads and teams for the following purposes:

  • Organize: Establish your cost allocation and governance baseline with your own tagging strategy and taxonomy. Create multiple AWS Accounts with tools such as AWS Control Tower or AWS Organization. Tag the supported AWS resources and categorize them meaningfully based on your organization structure (business units, departments, or projects). Tag account names for specific cost centers and map them with AWS Cost Categories to group accounts for business units to their cost centers so that business unit owner can see multiple accounts' consumption in one place.

  • Access: Track organization-wide billing information in consolidated billing. Verify the right stakeholders and business owners have access.

  • Control: Build effective governance mechanisms with the right guardrails to prevent unexpected scenarios when using Service Control Policies (SCP), tag policies, IAM policies and budget alerts. For example, you can allow teams to create specific resources in preferred regions only by using effective control mechanisms and prevent resource creations without specific tag (such as cost-center).

  • Current state: Configure a dashboard that shows current levels of cost and usage. The dashboard should be available in a highly visible place within the work environment like an operations dashboard. You can export data and use the Cost and Usage Dashboard from the AWS Cost Optimization Hub or any supported product to create this visibility. You may need to create different dashboards for different personas. For example, manager dashboard may differ from an engineering dashboard.

  • Notifications: Provide notifications when cost or usage exceeds defined limits and anomalies occur with AWS Budgets or AWS Cost Anomaly Detection.

  • Reports: Summarize all cost and usage information. Raise awareness and accountability of your cloud spend with detailed, attributable cost data. Create reports that are relevant to the team consuming them and contain recommendations.

  • Tracking: Show the current cost and usage against configured goals or targets.

  • Analysis: Allow team members to perform custom and deep analysis down to the hourly, daily or monthly granularity with different filters (resource, account, tag, etc.).

  • Inspect: Stay up to date with your resource deployment and cost optimization opportunities. Get notifications using Amazon CloudWatch, Amazon SNS, or Amazon SES for resource deployments at the organization level. Review cost optimization recommendations with AWS Trusted Advisor or AWS Compute Optimizer.

  • Trend reports: Display the variability in cost and usage over the required period with the required granularity.

  • Forecasts: Show estimated future costs, estimate your resource usage, and spend with forecast dashboards you create.

You can use AWS Cost Optimization Hub to understand potential cost-saving opportunities consolidated from a centralized location and create data exports for integration with Amazon Athena. You can also use the AWS Cost Optimization Hub to deploy the Cost and Usage Dashboard, which utilizes Amazon QuickSight for interactive cost analysis and secure cost insight sharing.

If you don't have essential skills or bandwidth in your organization, you can work with AWS ProServ, AWS Managed Services (AMS), or AWS Partners. You can also use third-party tools but ensure you validate the value proposition.

Implementation steps

  • Allow team-based access to tools: Configure your accounts and create groups that have access to the required cost and usage reports for their consumptions and use AWS Identity and Access Management to control access to the tools such as AWS Cost Explorer. These groups must include representatives from all teams that own or manage an application. This certifies that every team has access to their cost and usage information to track their consumption.

  • Organize Costs Tags and Categories: organize your costs across teams, business units, applications, environments, and projects. Use resource tags to organize costs, by cost allocation tags. Create Cost Categories based on the dimensions with using tags, accounts, services, etc. to map your costs.

  • Configure AWS Budgets: Configure AWS Budgets on all accounts for your workloads. Set budgets for the overall account spend, and budgets for the workloads by using tags and cost categories. Configure notifications in AWS Budgets to receive alerts for when you exceed your budgeted amounts, or when your estimated costs exceed your budgets.

  • Configure AWS Cost Anomaly Detection: Use AWS Cost Anomaly Detection for your accounts, core services or cost categories you created to monitor your cost and usage and detect unusual spends. You can receive alerts individually in aggregated reports and receive alerts in an email or an Amazon SNS topic which allows you to analyze and determine the root cause of the anomaly and identify the factor that is driving the cost increase.

  • Use cost analysis tools: Configure AWS Cost Explorer for your workload and accounts to visualize your cost data for further analysis. Create a dashboard for the workload that tracks overall spend, key usage metrics for the workload, and forecast of future costs based on your historical cost data.

  • Use cost-saving analysis tools: Use AWS Cost Optimization Hub to identify savings opportunities with tailored recommendations including deleting unused resources, rightsizing, savings Plans, reservations and compute optimizer recommendations.

  • Configure advanced tools: You can optionally create visuals to facilitate interactive analysis and sharing of cost insights. With Data Exports on AWS Cost Optimization Hub, you can create cost and usage dashboard powered by Amazon QuickSight for your organization that provides additional detail and granularity. You can also implement advanced analysis capability with using data exports in Amazon Athena for advanced queries, and create dashboards on Amazon QuickSight. Work with AWS Partners to adopt cloud management solutions for consolidated cloud bill monitoring and optimization.

Resources

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