Best Practices and New Tools for Cost Reporting and Estimation (COP218)

Amarlin
2025.03.01
 Introduction Mastering AWS Cloud Financial Management: Key Strategies and Tools for Optimized Cloud SpendingEffective cloud cost management has become a pivotal challenge and opportunity for businesses as they scale their operations in the cloud. At a recent AWS session, experts shared insights into harnessing AWS Cloud Financial Management (CFM) tools and practices to align cloud spending with business outcomes while driving cost efficiency. Here’s a detailed breakdown of the key takeaways and strategies discussed.
 Understanding Cloud Financial ManagementAWS Cloud Financial Management (CFM) is about more than reducing costs; it’s about creating value from your cloud investments. By adopting CFM tools and methodologies, organizations can achieve cost efficiency, mitigate risks, and evolve their financial strategies into a holistic cloud efficiency program.
 Top-Down and Bottom-Up Approaches to Cost ManagementThe session outlined two approaches to managing and estimating cloud costs:
Top-Down Approach
This approach focuses on high-level reporting, providing an aggregated view of costs across objectives, business units, or projects. Key elements include:
Reporting Levels: Provider-wide, business unit, project, or granular resource levels.
Frequency: Weekly, monthly, or continuous reporting.
The top-down approach is ideal for finance teams and executives seeking a holistic overview.
Bottom-Up Approach
Starting at the resource level, this approach gathers detailed data for precise cost estimations. Key considerations include:
Service-Level Analysis: Deep dives into project or application-specific resource usage.
Incorporating Growth Drivers: Using pipeline and business forecasts for accuracy.
Regular Refinements: Collaborating with engineering teams and leaders to improve cost predictions.
The bottom-up approach is best suited for technical teams focused on in-depth planning and analysis.

By integrating these methods, organizations can elevate their cost management practices, ensuring better alignment with business outcomes.
 Tip #1. Compare Apples to ApplesNormalize your cost and usage data
Utilize the FinOps Open Cost and Usage Specification (FOCUS) to standardize billing data across cloud service providers and SaaS platforms.
Use the FOCUS file export with AWS columns to bring uniformity to data schemas and simplify analysis.
Leverage QuickSight Dashboards and Athena Queries to visualize and query normalized cost data for consistent comparisons.



AWS introduced the FOCUS file export to ensure cost data is standardized, making it easier to compare spending across different cloud providers. By integrating FOCUS with AWS-native tools like QuickSight Dashboards, organizations can build cross-provider comparisons seamlessly. Similarly, Athena Queries enable customized exploration of normalized cost data, helping teams identify and address cost inefficiencies with precision.
 Tip #2 . Keep your finger on the pulseSpot trends and critical areas
Access the Billing Console to track spending trends at a glance.
Enable AWS Cost Anomaly Detection to identify unusual spending patterns using machine learning.
Use the Cost Monitor Widget to set up budget alerts and keep spending aligned with targets.
The session highlighted new Cost Monitor Widgets that can be embedded directly into your dashboard, offering real-time insights into cost performance. Additionally, AWS Cost Anomaly Detection uses machine learning to automatically identify spending anomalies, helping teams take proactive action before costs spiral out of control.
 Tip #3 . The more you know, the better you doAccess to reporting drives optimization
Provide tailored visibility using AWS IAM permissions for granular access to billing tools.
Share AWS Cost and Usage Reports (CUR) with teams to promote data-driven decisions.
Deploy Cloud Intelligence Dashboards for prebuilt insights into cost savings and KPIs.
AWS's latest Cloud Intelligence Dashboards make it easier than ever to access actionable insights. These prebuilt templates consolidate critical cost and usage data, enabling teams to quickly identify areas for optimization. The session also emphasized using Cost and Usage Reports (CUR) to empower teams with granular spending data, while IAM permissions ensure secure and appropriate access to these tools.
 Tip #4 . You can't hit a target you can't seeSet KPIs with usage trends and granular data
Customize Data Exports to filter AWS usage data by accounts, tags, or services.
Build KPIs using the Cost and Usage Dashboard to track cost breakdowns by compute, storage, and data transfer.
Deploy the CUDOS (Cloud Intelligence Dashboard Suite) to access reserved capacity recommendations and KPI dashboards.
AWS’s new CUDOS (Cloud Intelligence Dashboard Suite) is a game-changer for setting and tracking KPIs. With features like reserved capacity recommendations and cost breakdowns, this tool enables businesses to monitor resource utilization in real time. Additionally, the Cost and Usage Dashboard now offers customizable data exports, providing teams with granular insights tailored to their needs.
 Tip #5 . Pay your own wayMake chargeback/showback transparent
Use AWS Billing Conductor to group accounts by business entities and assign pro forma rates.
Share custom line items (e.g., enterprise support fees or savings plan benefits) for clear cost allocation.
Enable teams to manage their costs independently while maintaining transparency through pro forma reporting.
The AWS Billing Conductor has been updated to include more granular pro forma reporting and account groupings. This allows businesses to allocate shared costs, such as enterprise support fees, transparently. With custom pricing rules, teams can now better understand and manage their spending while maintaining transparency in chargeback and showback models.
 Tip #6 . Don't let perfect be the enemy of goodEnhance your metadata
Retroactively apply cost allocation tags for up to 12 months with AWS’s backfill feature.
Aggregate tags using Cost Categories to unify inconsistently tagged resources (e.g., case-sensitive tags).
Use AWS Tag Editor to regularly audit and update metadata for accurate reporting.
AWS now allows retroactive tagging with its tag backfill request, enabling users to apply or update cost allocation tags for up to 12 months in the past. This is a powerful addition for organizations seeking to enhance historical cost reporting. Moreover, the session highlighted Cost Categories as a key tool for aggregating inconsistent tags into unified groupings, streamlining analysis.
 Tip #7. Cover your fair shareDistribute costs equitably
Split shared costs using Cost Categories with proportional, fixed, or even distribution.
Enable Split Cost Allocation Data (SCAD) for granular attribution of costs in ECS and EKS by cluster, or namespace.
Use CloudWatch Container Insights for real-time resource utilization data to improve cost allocation accuracy.
The new Split Cost Allocation Data (SCAD) capability provides granular visibility into ECS and EKS costs, allowing organizations to allocate expenses by namespace, pod, or cluster. Combined with CloudWatch Container Insights, businesses can accurately distribute costs based on real-time usage data, ensuring fairness in chargeback models.
 Tip #8. Look before you leapIntegrate cost estimation with change management
Use the enhanced AWS Pricing Calculator to estimate cost impacts by importing existing usage and modifying configurations.
Simulate Savings Plan scenarios with the Savings Plan Purchase Analyzer to evaluate hourly commitments and savings.
Incorporate historical usage and growth projections for more accurate budgeting and scenario modeling.
The enhanced AWS Pricing Calculator now integrates with real usage data, allowing businesses to model cost impacts of changes such as region selection, instance type adjustments, and workload migrations.
Additionally, the Savings Plan Purchase Analyzer enables teams to evaluate multiple scenarios, ensuring they make informed commitments that maximize savings.
 Training and Resources for Continuous ImprovementIf you interested in learning more about this topic, AWS announced free Cloud Financial Management Digital Training, which covers:
FinOps fundamentals.
Technical cost optimization tips for major AWS services.
Practical guidance to master cloud cost management.
 The Bottom LineAWS Cloud Financial Management tools and strategies enable businesses to optimize their cloud spending while aligning costs with organizational goals. By adopting best practices like detailed cost analysis, proactive planning, and accountability mechanisms, organizations can unlock significant value from their cloud investments.