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Cost Allocation

FAQs​

Expand FAQs

1. What is the difference between showback and chargeback?​

Showback provides visibility into resource consumption and associated costs without directly billing teams or departments. Chargeback, on the other hand, enforces actual cost recovery by billing internal teams for their usage.

2. How can I use cost allocation rules in nOps?​

Cost allocation rules allow you to distribute unallocated expenses across departments, projects, or cost centers. You can assign costs directly, allocate based on a percentage of total spend, or divide them evenly among multiple values.

3. What happens to unallocated costs, and how can I manage them?​

Unallocated costs are expenses not attributed to any tags or allocation keys. You can navigate to the Unallocated Page in nOps to filter these costs by resource or service and apply allocation rules or tags to categorize them.

4. How does nOps handle custom showback values?​

Custom showback values let you define specific criteria for cost allocation. Once created, these values provide detailed insights into costs according to your organizational structure and cannot be renamed after saving. You can also combine similar values to simplify management.

5. What are cost allocation tags, and how do they improve reporting?​

Cost allocation tags are specialized tags that allow you to track and categorize expenses in reports. These tags help ensure costs are aligned with business units, making it easier to generate targeted insights for budgeting, optimization, and accountability.

Cost allocation refers to categorizing and assigning cloud expenses to various business units, projects, or resources. This empowers organizations to gain detailed insights into cloud spending, enabling efficient budget management, cost optimization, and financial accountability.

With AWS, cost allocation enables:

  • Accurate Budgeting: By identifying where resources are consumed.
  • Accountability: Assigning costs to business units or teams.
  • Optimization: Analyzing spending trends to reduce waste.

What is Showback?​

Showback is a cost management strategy that provides visibility into cloud usage and expenses without enforcing direct chargeback to teams or departments.

  • Purpose: To provide visibility into resource consumption and cost attribution for stakeholders without directly billing them.
  • Key Features:
    • Visualizing costs across projects or departments.
    • Identifying high-cost areas for optimization.
    • Providing stakeholders with insights into spending patterns.

What is a Tag?​

A tag is a label consisting of a key-value pair attached to resources. It enables better organization, filtering, and cost allocation.

  • Example:
    • Key: Environment | Value: Production
    • Key: Team | Value: Finance
  • Uses of Tags:
    • Streamlining resource management.
    • Enabling targeted cost allocation and reporting.
    • Simplifying compliance and audit processes.

What is a Cost Allocation Tag?​

Cost Allocation Tags are specialized tags used to track and report cloud costs. These tags enable users to create detailed reports and dashboards, offering insights into cost distribution by category.

Types of Cost Allocation Tags in nOps:​

  1. System-Generated Tags: Automatically created by nOps for tracking purposes.
  2. User-Defined Tags: Customizable tags set by users to reflect specific organizational needs.

What are the Different Cost Types in AWS?​

AWS offers multiple cost types to help organizations understand and manage their expenses:

  1. Blended Costs
  2. Unblended Costs
  3. Amortized Costs
  4. List Costs
  5. Discounted Unblended Costs
  6. Discounted Amortized Costs
  7. Discounted List Costs

Check the Definition here

For a full discussion of the different cost types, consult the relevant nOps blog.

Why is Cost Allocation Important in nOps?​

Cost allocation in nOps is essential for the following:

  • Achieving financial transparency in cloud spending.
  • Promoting cost accountability within teams.
  • Uncovering cost optimization opportunities.
  • Aligning cloud expenses with organizational objectives.

A Step-by-Step Guide to Showbacks and Features​

(Video) TO BE ADDED

Creating a Showback​

  1. Navigate to Cost Allocation.
    a. Business Context → Cost Allocation.

  2. Click "Create Showback" to create a new showback.

  3. Fill out the "Create Showback" prompt.
    a. Fill out the showback name. For example, this could be the department, project, or resource group the showback will track.
    b. (Optional) Select Tag Keys or Cost Allocation Keys:

    • You can create the showback by selecting one or more tag keys or cost allocation keys to define how costs are grouped and reported.
    • Alternatively, you can proceed without selecting any keys, allowing the showback to cover all resources and costs without specific categorization.

  4. View the Showback List After Saving.

    • Once you’ve saved your new showback, it will appear in the Showback List on your dashboard.
    • This list displays all your showback reports, allowing you to quickly access, edit, or manage them as needed.

Understanding Features & Options in the Showback List​

  1. Apply a Date Filter to View Costs for a Specific Date Range:

    • By selecting a specific date range, you can analyze costs within that period.
    • Helps track spending trends, compare expenses across different time frames, and make informed financial decisions.

  2. Filter Costs by Different Cost Types:

    • View costs as unblended, blended, amortized, list, discounted unblended, discounted blended, discounted amortized, and discounted list cost types.

  3. Modify the List of Showbacks with the "Update List" Button:

    • This button lets you control the order in which showbacks are displayed on the dashboard.
    • To hide a showback from the list, simply uncheck the showback and save your changes.

  4. Edit or Delete a Showback:

    • To update the showback’s name or keys, use the "Edit" button.
    • To permanently delete a showback, click the "Delete" button.

  5. Navigate to the Detail Screen:

    • Click on the showback’s name or the arrow icon to go to the detail screen.
    • View comprehensive data, analyze cost breakdowns, and review configurations related to the selected showback.

The Showbacks Detail Screen​

  1. Choose the view

    • Showback Values View:
      This view displays the showback data based on the selected keys used during the creation of the showback. It provides a detailed breakdown of costs and usage according to the specific tag keys or cost allocation keys you chose.

    • No Values View:
      This view presents the showback data without applying any specific keys or values. It provides a general overview of costs and usage without detailed categorization.

  2. Create Custom Showback Values

    • Click the "Create Custom Values" button to define and apply your own cost allocation criteria.

  3. Name and Save Custom Showback Values:

    • Enter a name for your custom showback values and click "Save" to apply them.
    • Once saved, the name of the custom showback values cannot be updated.
    • The "Combine" feature allows you to merge duplicate or similar showbacks into a single showback. You can later edit or un-combine these showbacks if desired.

Allocate Costs on the Unallocated Page​

  1. Navigate to the Unallocated Page to manage and assign unallocated costs.
  2. Filter data by resource or service for targeted cost allocation.

How to Create an Allocation Rule​

  1. Click "Create an Allocation Rule" to define and configure rules for distributing costs among departments, projects, or cost centers.

  2. Fill out the options in the Allocate Selected Resources prompt.

  3. Create an Allocation Rule in Two Ways:

    a. Directly Assign Costs to a Specific Showback Value
    b. Distribute Costs Across All Values by Percentage

    • i. Percent of Spend: Allocates costs proportionally to existing expenditures.
    • ii. Custom Percent: Distributes costs based on the percentage you set.
    • iii. Evenly: Divides costs equally among all showback values.
    • iv. Custom Percent Spend:
      • Targets cost allocation to selected showback values based on custom criteria.
      • Allocates costs to a subset of showback values while leaving others unaffected.
      • This allows for targeted distribution based on your chosen criteria.

  4. View the List of Allocation Rules

    • From this list, you can view and manage the cost allocation rules you create.

  5. View the List of Allocated Resources:

    • Click the arrow button associated with the showback to see the resources allocated to specific showback values through different rules.

  6. Tagging Resources from the Unallocated Page

    • You can also tag resources directly from the Unallocated Resources page.

    • Select the resource, click "Add Tag," and enter the tag details to categorize it.

    • When you click "Add Tag," a popup will appear. In the popup, click "Tag Now" to apply the tag to the selected resource.

    • When you click "Tag Now," a second popup will appear. In this popup, you can:

      • Select Tag Value: Choose the tag value from the available options to which you want to apply the tag.
      • Tagging with No Tag Keys: If you create a showback without selecting tag keys, you must manually type the tag name.
      • Tagging with Multiple Tag Keys: If you selected multiple tag keys while creating the showback, you must select the appropriate tag key from the dropdown menu.

    • Once you click the "Yes" button, you will be redirected to the AWS console, where you can proceed with the tagging process.

note

If you select multiple resources with long AWS ARNs that exceed URL length limits, the console may not handle all resources in a single request. In such cases, the system will open multiple tabs to manage the resources effectively.