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Cloud Financial Management

Managing your costs with AWS Cost Categories

Introduction

Introduction

AWS Cost Categories is a feature within AWS Cost Management product suite that enables you to group cost and usage information into meaningful categories based on your needs. You can create custom categories and map your cost and usage information into these categories based on the rules defined by you using various dimensions such as account, tag, service, charge type, and even other cost categories. Once cost categories are set up and enabled, you will be able to view your cost and usage information by these categories starting at the beginning of the month in AWS Cost Explorer, AWS Budgets, and AWS Cost and Usage Report (CUR).

What you will learn

  • How to set up your Cost Categories

    • Implementation

    You will need the following resources or permissions to proceed with this tutorial: Enable Cost Explorer, Ensure IAM policies for Cost Explorer console and API access

    • 1.2 — Create your cost categories
      • In the navigation pane, choose Cost Categories. If you view your organization as teams, you can name your cost category, ‘Teams’. There can be multiple teams in your organization and each team is made up of numerous accounts. You can use Cost Categories to categorize accounts into teams and have those groups appear in Cost Explorer, Budgets, and CUR.
      • Select create cost categories.
    • 2.1 — Define category rules
      • The rule builder allows you to create cost category values. These values represent the internal organizational units. Define category rules using custom logic to build groups of cost line items. You can create Cost Categories using the rule builder or the JSON editor.
      • Continuing with the example, you can build out two teams, one called Alpha and the other called Beta. In the first rule, you can give the value Alpha to certain accounts, choose the Accounts as dimension, and select the accounts that are in Team Alpha.
      • You can continue writing more rules for each team. But the rules are listed in a priority order and have precedence over the later rules.
    • 2.1 — Define split charge rules (optional) 
      • You can first define a category rule to categorize your shared costs into a Cost Category value “Shared costs”. Then, you can define a split charge rule with the “Shared costs” as the source to be split across your teams with a desired charge allocation method. The allocation method (even-split, fixed-percentage split, or proportional cost-based split) determines how your source costs are split across your targets.
    • 3.1 — Access the details page to dive deep into your Cost Category details
      • Cost Categories details page provides you an overview of your cost allocations within your Cost Categories. You can see a graphical overview, absolute amounts, and percent breakdowns of your cost allocation across your Cost Category values, along with uncategorized costs. 
      • If you have defined split charge rules, you can also view the split and total allocated costs. This includes the costs for before and after calculating the split charges. You can also download a CSV report from the details page. The details page is presented after you create or edit your Cost Category. The Cost Category status will initially be “Processing” and will change to “Applied” once your costs have been categorized with your updates.
    • 4.1 — Create multilevel hierarchical relationships
      • You can create multilevel hierarchical relationships among your cost categories by using Cost Category as a dimension. 
      • Your organization might comprise multiple cost centers spanning across several departments, with each department itself containing multiple teams. You can easily set up hierarchical cost categories to exactly match your organizational structure and track your cost and usage at every level.
      • Consider the cost category “Team” from the previous example which was created using Account and Tag as dimensions, and values as “Alpha” and “Beta”. To further categorize your teams into separate departments, you can create a “Department” cost category that is built on top of your existing “Team” cost category by selecting dimension as Cost Category and “Team” as the Cost Category name for the dimension. You can then select “Alpha” and “Beta” as dimension values for “Platform Engineering” department and “FinOps-1” and “FinOps-2” as dimension values for “FinOps” department.
    • 4.2 — Categorize your departments into separate cost centers
      • Categorize your departments into separate cost centers by creating a “Cost Center” category. 
      • As done previously, select dimension as Cost Category and “Department” as the Cost Category name for the dimension. You can then select previously created “FinOps” and “Platform Engineering” departments as dimension values for “Cloud COE”. You can also select other teams that are not categorized as departments by using “Team” as the Cost Category name and selecting “DataScience-1” and “CoreProduct” teams as dimension value for “Research Center”.