October 26, 2023

Cost Reporting for Chargeback and Showback: Why Choosing Harness Beats Building In-House

Table of Contents

Key takeaway

Deciding whether to adopt and implement a new product or build an in-house solution is a critical decision in any organization. Especially when the desired solution requires comprehensive features and deep functionality, pouring vast amounts of engineering time and resources into a homemade tool can be counterproductive. It's often more prudent to channel that investment and your team's time into bolstering your core business offerings.

So, why should you buy instead of build for cloud cost reporting? Building a chargeback and showback system for cloud costs may appear straightforward. However, a comprehensive cost reporting solution requires careful consideration of several aspects before deciding.

What is Chargeback and Showback?

The short answer is that both of these are processes that task departments using shared IT resources to understand and be accountable for the costs of using those resources.

  • Chargeback is really what it sounds like - your department is getting a charge back to your budget for your cloud resource consumption, rather than the central infrastructure team bearing the responsibility for costs. This is generally driven by Finance. 
  • Showback is all about cost visibility - your department gets reports on what your cloud usage is, as well as the associated costs, but it isn’t charged to your department.

It sounds straightforward, but for anyone who has seen a cloud bill, you know that it really isn’t. Attributing costs to the right teams is a big challenge.

Managing Shared Costs

Leveraging simple Business Intelligence (BI) tools for cloud cost management may seem efficient at first, but they fall short when it comes to allocating shared costs across various departments, teams or applications across the organization. Without the ability to accurately attribute costs, chargeback and showback end up being best guess efforts from a centralized reporting team. 

Harness CCM’s Cost Categories offers a comprehensive solution for cost attribution, and is adept at handling intricate cost allocation tasks including multiple strategies to allocate shared costs transparently. With Cost Categories, you can quickly and easily create chargeback and showback reports with a high degree of accuracy.

Building Cost Categories for Chargeback and Showback

Associating Costs with Recommendations

Once you’ve begun to accurately report and chargeback/showback cost per department, the obvious next step is taking initiative to reduce those costs. An integral part of efficiently managing cloud costs is right-sizing over-provisioned resources and cleaning up unused cloud resources. While building an in-house solution might provide raw cost data, effectively linking these costs with right-sizing recommendations does not come out of the box with a vanilla BI tool. 

Harness CCM doesn't just tell you what you're spending, it also provides actionable recommendations on how to optimize cloud resources. By associating cloud costs with optimization recommendations, businesses can identify wastage, make informed adjustments, and realize significant savings while ensuring optimal performance.

Recommendations - The Next Logical Step for Reducing Chargeback

Associating Costs with Cost Anomalies

Cost anomalies can indicate underlying issues or inefficiencies, and waiting for monthly chargeback/showback reports could result in surprise charges of thousands of dollars of surprise cloud spend. Detecting these anomalies is just the first step; understanding their financial implications is crucial for effective cloud cost management. With an in-house solution, this association can be a manual, time-consuming review process. 

In contrast, Harness CCM not only provides cost anomaly detection out-of-the-box but also provides a clear view of their financial impact as they occur. This enables businesses to quickly address and rectify costly unplanned spikes in cloud consumption, ensuring both financial prudence and operational efficiency.

Budgeting and Forecasting Management

By definition, chargeback and showback reports show you what happened in the past. Planning for the future is imperative for efficient cloud cost management. Unfortunately, in-house systems often lack the advanced capabilities to integrate budgeting and forecasting functionalities. Vanilla BI tools usually do not provide the ability to create, manage and track cloud cost budgets. 

Harness CCM fills this gap, allowing teams to set budgets, anticipate future costs, and make informed financial decisions. Additionally, CCM enables you to create group budgets or cascading budgets at multiple levels across your organization that are interrelated.

Set and Enforce Budgets as Part of Showback

Dynamic Team and Project Management

In a fast-paced business environment, teams and projects shift, merge, or divide. Managing cloud costs for such dynamic entities requires a system that's just as agile. An in-house solution might struggle to keep up with the changing definitions of teams, projects, departments and business units - or whatever construct you want to use for your chargeback/showback cloud cost reporting.  

Harness CCM’s Cost Categories offers the flexibility to manage the definitions of these constructs across cost reports and dashboards for ever-evolving teams and projects effortlessly. This ensures that your chargeback/showback reports are fresh and accurate over time. 

Changes to Department Cost Categories are Displayed Immediately

Tracking Resource Utilization Metrics

Beyond just costs, understanding resource utilization metrics like CPU usage can offer insights into efficiency and areas of potential optimization. Harness CCM shines here, offering an integrated view of both costs and critical utilization metrics that leverage cloud provider APIs out-of-the-box, which a DIY approach or standalone BI tool could struggle to incorporate and maintain. This can be particularly true with the ever-changing nature of cloud provider APIs and integrations.

Management of updates to the CUR and Billing Export

Crafting a system that dynamically detects, understands and ingests new dimensions in the Cost and Usage Report (CUR) or billing export of AWS, Azure or GCP, when required, may not always be very straightforward. But it’s essential for accurate chargeback and showback reporting. If your team doesn’t keep up with these changes, your reports can lose accuracy quickly.

This goes beyond a simple one-time configuration given constant changes being introduced. This would demand constant updates and attention. Opting for Harness CCM eliminates this ongoing manual effort, ensuring that such changes are seamlessly integrated without the fuss.

Performance and Scalability Concerns

As your business grows, so does the data you're processing. Building an in-house solution means constantly addressing performance bottlenecks and scalability issues as reports expand. Harness CCM is designed with scalability in mind, effortlessly adapting to increasing data loads and ensuring consistent performance even as your reports grow in size and complexity.

Conclusion

Together, these reasons strongly suggest that investing in Harness CCM offers tangible benefits over the long, arduous journey of building and maintaining an in-house cloud cost management solution.

Looking for an easy, out-of-the-box solution for chargeback and showback of your company's cloud costs? Book a demo of Harness CCM or sign up for free.


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