Hierarchical Breakdown of Organizational Cloud Costs

Businesses leveraging public clouds often grapple with understanding and managing their cloud costs. Traditional methods and tools might offer insights, but in today's complex cloud environments, deeper visibility is essential.

Without a clear hierarchical breakdown, costs can easily spiral out of control without any accountability or ownership. Costs can become murky, teams can exceed budgets unknowingly, and companies can waste budgets on underused or redundant cloud resources. Therefore, getting a handle on these costs by understanding them at every tier of the organization is vital.

Harness Cloud Cost Management for Cost Visibility and Attribution

Harness Cloud Cost Management (CCM) offers two powerful cost attribution features – Cost Categories and Perspectives. These features offer a comprehensive view into cloud costs that is as rarely implemented as it is essential. Cost categories offer a way to group cloud costs in ways that are most meaningful for their business and act as the basis for creating and managing perspectives, which are cost views customized to the needs of your business that empower teams to track and manage costs directly.

Cost Categories

Users can group cloud costs in ways that are most meaningful for their business. This not only facilitates clearer budgeting but also provides an in-depth breakdown. Such insights offer clarity on which departments, projects, or applications are consuming the most resources and money. 

It also ensures that costs across cloud providers and Kubernetes deployments can be included in the same cost categories to provide a complete view of costs, without requiring manual report creation.

Perspectives

Harness CCM offers a flexible approach to viewing and allocating costs. It offers various perspectives that can be tailored to roles, departments, projects, or any other organizational structure. This ensures that everyone gets the most relevant and contextual view of their cost data. 

Each perspective gives that team direct access to cost forecasting, relevant recommendations to optimize costs they are responsible for, the ability to set cloud budgets, and get direct alerts on anomalous cloud spends. All of this is in the context of the cloud costs that their Perspective is tracking to ensure they get the information they need to track and take action on their cloud costs.

Benefits of Hierarchical Cost Breakdown

• Transparency - Organizations gain a transparent view of how cloud spend maps to resources consumed, and can make data-driven decisions.
• Accountability - Departments or teams can be held accountable for their specific cloud expenses with more granular and accurate cost allocation.
• Optimization - Identifying which resources are not allocated to any team or department becomes straightforward, leading to cost savings. As they say, you can't improve what you don't measure.
• Forecasting - With a clear view of current costs per team or department, predicting future expenses across the organization becomes more accurate.

Real-World Application Example

Let us understand how you can leverage cost categories with a case study. Let’s assume we have an Organisation X, with 3 levels of hierarchy at which cloud costs are tracked; VP, Director and Manager. Multiple Managers roll up to a director and multiple directors roll up to a VP. Each manager is responsible for a specific team.

Cost categories are use Cost Buckets as the building block for creating the category. Each Cost Bucket is defined by a set of rules, which can be as simple as pulling from a team tag from a single cloud to as complex as multiple rules pulling data from across all clouds spanning across multiple different rules. This ensures that all costs per team, regardless of source, are included in their cost category.

We’ll start at the bottom of the hierarchy, at the Teams category level, and include all costs for each teams cost bucket.

Once the Teams have been defined, we can then created a hierarchical (nested) cost category for Director, which will include the Teams that report into each Director. Following that, we can repeat the process to create the VP Cost Category, defining the Directors that report into each VP.

Once the cost categories are created they can be used to define new perspectives and further breakdown costs in existing perspectives. This can give you high level visibility at multiple levels of the business, at the VP, Director and manager levels, all the way down to the individual teams. 

These cost category and cost bucket definitions can also include attribution of costs for shared cloud services. Sharing of costs across cost buckets can be done using various strategies such as proportional cost sharing, sharing costs based on a fixed percentage or sharing costs equally across the different cost buckets.

Without a tool like Harness CCM, understanding which team’s activity incurs what costs, including shared costs, can be challenging. However, with Cost Categories and Perspectives, each VP, Director, team, and the finance team, can get a clear and accurate breakdown. They can see costs associated with each department, assess the ROI, and allocate budgets more effectively for the future.

Conclusion

In today's multifaceted cloud environment, having a tool that offers a granular, hierarchical view of costs across your company isn't just a nice-to-have—it's essential. Harness CCM’s features of Cost Categories and Perspectives provide this much-needed visibility, ensuring that businesses can use cloud resources effectively without busting their budgets.

Looking to get this kind of granular visibility into your company's cloud costs? Take control of your cloud expenditure and gain unparalleled insights with Harness CCM. Book a demo or sign up for free today.