Cloud Cost Allocation Model

Phase 2: Tagging Strategy

1. Define mandatory tags for all resources
   • team - owning team
   • environment - prod/staging/dev/sandbox
   • project - project or product name
   • cost-center - financial cost center code
   • managed-by - terraform/manual/other
2. Define optional enrichment tags
3. Implement tag enforcement policies
4. Plan remediation for untagged resources
5. Set up tag compliance monitoring

Phase 3: Shared Cost Allocation Rules

1. Identify shared services and infrastructure
   • Networking (VPC, load balancers, NAT gateways)
   • Security (WAF, firewalls, key management)
   • Monitoring and logging platforms
   • CI/CD infrastructure
   • Shared databases or caches
2. Define allocation method per shared service

Shared Cost Allocation Methods

Phase 4: Reporting & Dashboards

1. Build cost allocation dashboards by team, project, environment
2. Create monthly cost reports for budget owners
3. Implement anomaly detection for unexpected spend
4. Track unit economics (cost per transaction, cost per user)
5. Generate trend reports for capacity planning

Phase 5: Budget Integration

1. Set budgets per team and project aligned to fiscal calendar
2. Configure budget alerts at 50%, 75%, 90%, 100% thresholds
3. Implement approval workflows for budget overruns
4. Create quarterly budget review cadence
5. Feed allocation data into financial planning tools

Counter-Rationalizations

Output Format

• Tagging Policy Document: Required and optional tags with enforcement rules
• Allocation Rules: Shared cost distribution methodology
• Dashboard Templates: Cost views by team, project, environment
• Monthly Report Template: Standardized cost report for stakeholders
• Budget Template: Per-team budget with alert thresholds

Action Items

• Get executive sponsorship for allocation model
• Define and publish tagging policy
• Implement tag enforcement and remediation
• Build cost allocation dashboards
• Distribute first monthly allocation reports
• Establish quarterly budget review meetings