# COST 3. How do you monitor usage and cost?
Establish policies and procedures to monitor and appropriately allocate your costs. This permits you to measure and improve the cost efficiency of this workload.
**Topics**
+ [COST03-BP01 Configure detailed information sources](cost_monitor_usage_detailed_source.md)
+ [COST03-BP02 Add organization information to cost and usage](cost_monitor_usage_org_information.md)
+ [COST03-BP03 Identify cost attribution categories](cost_monitor_usage_define_attribution.md)
+ [COST03-BP04 Establish organization metrics](cost_monitor_usage_define_kpi.md)
+ [COST03-BP05 Configure billing and cost management tools](cost_monitor_usage_config_tools.md)
+ [COST03-BP06 Allocate costs based on workload metrics](cost_monitor_usage_allocate_outcome.md)
# COST03-BP01 Configure detailed information sources
Configure the AWS Cost and Usage Report, and Cost Explorer hourly granularity, to provide detailed cost and usage information. Configure your workload to have log entries for every delivered business outcome.
**Level of risk exposed if this best practice is not established:** High
## Implementation guidance
Enable hourly granularity in AWS Cost Explorer and create a [AWS Cost and Usage Report (CUR)](https://aws.amazon.com/aws-cost-management/aws-cost-and-usage-reporting/). These data sources provide the most accurate view of cost and usage across your entire organization. The CUR provides daily or hourly usage granularity, rates, costs, and usage attributes for all chargeable AWS services. All possible dimensions are in the CUR including: tagging, location, resource attributes, and account IDs.
Configure your CUR with the following customizations:
+ Include resource IDs
+ Automatically refresh the CUR
+ Hourly granularity
+ **Versioning:** Overwrite existing report
+ **Data integration:** Amazon Athena (Parquet format and compression)
Use [AWS Glue](https://aws.amazon.com/glue/) to prepare the data for analysis, and use [Amazon Athena](https://aws.amazon.com/athena/) to perform data analysis, using SQL to query the data. You can also use [Amazon Quick](https://aws.amazon.com/quicksight/) to build custom and complex visualizations and distribute them throughout your organization.
**Implementation steps**
+ ** Configure the cost and usage report: **Using the billing console, configure at least one cost and usage report. Configure a report with hourly granularity that includes all identifiers and resource IDs. You can also create other reports with different granularities to provide higher-level summary information.
+ ** Configure hourly granularity in Cost Explorer: **Using the billing console, turn on Hourly and Resource Level Data.
**Note**
There will be associated costs with activating this feature. For details, refer to the pricing.
+ **Configure application logging:** Verify that your application logs each business outcome that it delivers so it can be tracked and measured. Ensure that the granularity of this data is at least hourly so it matches with the cost and usage data. Refer to the [Well-Architected Operational Excellence Pillar](https://docs.aws.amazon.com/wellarchitected/latest/operational-excellence-pillar/welcome.html) for more detail on logging and monitoring.
## Resources
**Related documents:**
+ [AWS Account Setup](https://wellarchitectedlabs.com/Cost/Cost_Fundamentals/100_1_AWS_Account_Setup/README.html)
+ [AWS Cost and Usage Report (CUR)](https://aws.amazon.com/aws-cost-management/aws-cost-and-usage-reporting/)
+ [AWS Glue](https://aws.amazon.com/glue/)
+ [Amazon Quick](https://aws.amazon.com/quicksight/)
+ [AWS Cost Management Pricing](https://aws.amazon.com/aws-cost-management/pricing/)
+ [Tagging AWS resources](https://docs.aws.amazon.com/general/latest/gr/aws_tagging.html)
+ [Analyzing your costs with AWS Budgets](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/budgets-managing-costs.html)
+ [Analyzing your costs with Cost Explorer](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/cost-explorer-what-is.html)
+ [Managing AWS Cost and Usage Reports](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/billing-reports-costusage-managing.html)
+ [Well-Architected Operational Excellence Pillar](https://docs.aws.amazon.com/wellarchitected/latest/operational-excellence-pillar/welcome.html)
**Related examples:**
+ [AWS Account Setup](https://wellarchitectedlabs.com/Cost/Cost_Fundamentals/100_1_AWS_Account_Setup/README.html)
# COST03-BP02 Add organization information to cost and usage
Define a tagging schema based on your organization, workload attributes, and cost allocation categories so that you can filter and search for resources or monitor cost and usage in cost management tools. Implement consistent tagging across all resources where possible by purpose, team, environment, or other criteria relevant to your business.
**Level of risk exposed if this best practice is not established:** Medium
## Implementation guidance
Implement [tagging in AWS](https://docs.aws.amazon.com/general/latest/gr/aws_tagging.html) to add organization information to your resources, which will then be added to your cost and usage information. A tag is a key-value pair — the key is defined and must be unique across your organization, and the value is unique to a group of resources. An example of a key-value pair is the key is `Environment`, with a value of `Production`. All resources in the production environment will have this key-value pair. Tagging allows you categorize and track your costs with meaningful, relevant organization information. You can apply tags that represent organization categories (such as cost centers, application names, projects, or owners), and identify workloads and characteristics of workloads (such as test or production) to attribute your costs and usage throughout your organization.
When you apply tags to your AWS resources (such as Amazon Elastic Compute Cloud instances or Amazon Simple Storage Service buckets) and activate the tags, AWS adds this information to your Cost and Usage Reports. You can run reports and perform analysis on tagged and untagged resources to allow greater compliance with internal cost management policies and ensure accurate attribution.
Creating and implementing an AWS tagging standard across your organization’s accounts helps you manage and govern your AWS environments in a consistent and uniform manner. Use [Tag Policies](https://docs.aws.amazon.com/organizations/latest/userguide/orgs_manage_policies_tag-policies.html) in AWS Organizations to define rules for how tags can be used on AWS resources in your accounts in AWS Organizations. Tag Policies allow you to easily adopt a standardized approach for tagging AWS resources
[AWS Tag Editor](https://docs.aws.amazon.com/ARG/latest/userguide/tag-editor.html) allows you to add, delete, and manage tags of multiple resources. With Tag Editor, you search for the resources that you want to tag, and then manage tags for the resources in your search results.
[AWS Cost Categories](https://aws.amazon.com/aws-cost-management/aws-cost-categories/) allows you to assign organization meaning to your costs, without requiring tags on resources. You can map your cost and usage information to unique internal organization structures. You define category rules to map and categorize costs using billing dimensions, such as accounts and tags. This provides another level of management capability in addition to tagging. You can also map specific accounts and tags to multiple projects.
**Implementation steps**
+ **Define a tagging schema:** Gather all stakeholders from across your business to define a schema. This typically includes people in technical, financial, and management roles. Define a list of tags that all resources must have, as well as a list of tags that resources should have. Verify that the tag names and values are consistent across your organization.
+ ** Tag resources: **Using your defined cost attribution categories, [place tags](https://docs.aws.amazon.com/general/latest/gr/aws_tagging.html) on all resources in your workloads according to the categories. Use tools such as the CLI, Tag Editor, or AWS Systems Manager to increase efficiency.
+ **Implement AWS Cost Categories: **You can create [Cost Categories](https://aws.amazon.com/aws-cost-management/aws-cost-categories/) without implementing tagging. Cost categories use the existing cost and usage dimensions. Create category rules from your schema and implement them into cost categories.
+ **Automate tagging:** To verify that you maintain high levels of tagging across all resources, automate tagging so that resources are automatically tagged when they are created. Use services such as [AWS CloudFormation](https://docs.aws.amazon.com/AWSCloudFormation/latest/UserGuide/aws-properties-resource-tags.html) to verify that resources are tagged when created. You can also create a custom solution to [tag automatically](https://aws.amazon.com/blogs/mt/auto-tag-aws-resources/) using Lambda functions or use a microservice that scans the workload periodically and removes any resources that are not tagged, which is ideal for test and development environments.
+ ** Monitor and report on tagging: **To verify that you maintain high levels of tagging across your organization, report and monitor the tags across your workloads. You can use [AWS Cost Explorer](https://aws.amazon.com/aws-cost-management/aws-cost-explorer/) to view the cost of tagged and untagged resources, or use services such as [Tag Editor](https://docs.aws.amazon.com/tag-editor/latest/userguide/tagging.html). Regularly review the number of untagged resources and take action to add tags until you reach the desired level of tagging.
## Resources
**Related documents:**
+ [ Tagging Best Practices ](https://docs.aws.amazon.com/whitepapers/latest/tagging-best-practices/tagging-best-practices.html)
+ [AWS CloudFormation Resource Tag](https://docs.aws.amazon.com/AWSCloudFormation/latest/UserGuide/aws-properties-resource-tags.html)
+ [AWS Cost Categories](https://aws.amazon.com/aws-cost-management/aws-cost-categories/)
+ [Tagging AWS resources](https://docs.aws.amazon.com/general/latest/gr/aws_tagging.html)
+ [Analyzing your costs with AWS Budgets](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/budgets-managing-costs.html)
+ [Analyzing your costs with Cost Explorer](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/cost-explorer-what-is.html)
+ [Managing AWS Cost and Usage Reports](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/billing-reports-costusage-managing.html)
**Related videos:**
+ [ How can I tag my AWS resources to divide up my bill by cost center or project ](https://www.youtube.com/watch?v=3j9xyyKIg6w)
+ [ Tagging AWS Resources ](https://www.youtube.com/watch?v=MX9DaAQS15I)
**Related examples:**
+ [ Automatically tag new AWS resources based on identity or role ](https://aws.amazon.com/blogs/mt/auto-tag-aws-resources/)
# COST03-BP03 Identify cost attribution categories
| |
| --- |
| This best practice was updated with new guidance on July 13th, 2023. |
Identify organization categories such as business units, departments, or projects that could be used to allocate cost within your organization to the internal consuming entities so that spend accountability can be enforced and consumption behaviors can be driven effectively.
**Level of risk exposed if this best practice is not established:** High
## Implementation guidance
The process of categorizing costs is crucial in budgeting, accounting, financial reporting, decision making, benchmarking, and project management. By classifying and categorizing expenses, teams can gain a better understanding of the types of costs they will incur throughout their cloud journey, helping teams make informed decisions and manage budgets effectively.
Cloud spend accountability establishes a strong incentive for disciplined demand and cost management. The result is significantly greater cloud cost savings for organizations that allocate most of their cloud spend to consuming business units or teams.
Work with your finance team and other relevant stakeholders to understand the requirements of how costs must be allocated within your organization. Workload costs must be allocated throughout the entire lifecycle, including development, testing, production, and decommissioning. Understand how the costs incurred for learning, staff development, and idea creation are attributed in the organization. This can be helpful to correctly allocate accounts used for this purpose to training and development budgets, instead of generic IT cost budgets.
After defining your cost attribution categories with your stakeholders in your organization, use [AWS Cost Categories](https://aws.amazon.com/aws-cost-management/aws-cost-categories/) to group your cost and usage information into meaningful categories in the AWS Cloud such as cost for specific project or AWS accounts for departments or business units. You can create custom categories and map your cost and usage information into these categories based on rules you define using various dimensions such as account, tag, service, charge type, and even other cost categories. Once cost categories are set up, you will be able to view your cost and usage information by these categories allowing your organization to make better strategic and purchasing decisions. These categories will be visible in AWS Cost Explorer, AWS Budgets, and AWS Cost and Usage Report as well.
As an example, the following diagram shows you how can you group your costs and usage information in your organization such as having multiple teams (cost category) having multiple environments (rules) and each environment having multiple resources or assets (dimensions).
![\[Flowchart detailing the relationship between cost and usage within an organization.\]](http://docs.aws.amazon.com/wellarchitected/2023-04-10/framework/images/cost-usage-organization-chart.png)
## Implementation steps
+ **Define your organization categories:** Meet with stakeholders to define categories that reflect your organization's structure and requirements. These will directly map to the structure of existing financial categories, such as business unit, budget, cost center, or department. Look at the outcomes the cloud delivers for your business, such as training or education, as these are also organization categories. Multiple categories can be assigned to a resource, and a resource can be in multiple different categories, so define as many categories as needed.
+ **Define your functional categories:** Meet with stakeholders to define categories that reflect the functions that you have within your business. This may be the workload or application names, and the type of environment, such as production, testing, or development. Multiple categories can be assigned to a resource, and a resource can be in multiple different categories, so define as many categories as needed so that you can [manage your costs](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/manage-cost-categories.html) within the categorized structure using AWS Cost Categories.
+ **Define AWS Cost Categories:** You can [create cost categories](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/create-cost-categories.html) to organize your cost and usage information. Use [AWS Cost Categories](https://aws.amazon.com/aws-cost-management/aws-cost-categories/) to map your AWS costs and usage into meaningful categories. With cost categories, you can organize your costs using a rule-based engine. The rules that you configure organize your costs into categories. Within these rules, you can filter with using multiple dimensions for each category such as specific AWS accounts, specific AWS services, or specific charge types. You can then use these categories across multiple products in the [AWS Billing and Cost Management](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/billing-what-is.html) [console](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/view-billing-dashboard.html). This includes AWS Cost Explorer, AWS Budgets, AWS Cost and Usage Report, and AWS Cost Anomaly Detection. You can create groupings of costs using cost categories as well. After you create the cost categories (allowing up to 24 hours after creating a cost category for your usage records to be updated with values), they appear in [AWS Cost Explorer](https://aws.amazon.com//aws-cost-management/aws-cost-explorer/), [AWS Budgets](https://docs.aws.amazon.com/cost-management/latest/userguide/budgets-managing-costs.html), [AWS Cost and Usage Report](https://docs.aws.amazon.com/cur/latest/userguide/what-is-cur.html), and [AWS Cost Anomaly Detection](https://aws.amazon.com/aws-cost-management/aws-cost-anomaly-detection/). For example, create cost categories for your business units (DevOps Team), and under each category create multiple rules (rules for each sub category) with multiple dimensions (AWS accounts, cost allocation tags, services or charge type) based on your defined groupings. In AWS Cost Explorer and AWS Budgets, a cost category appears as an additional billing dimension. You can use this to filter for the specific cost category value, or group by the cost category.
## Resources
**Related documents:**
+ [Tagging AWS resources](https://docs.aws.amazon.com/general/latest/gr/aws_tagging.html)
+ [Using Cost Allocation Tags](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/cost-alloc-tags.html)
+ [Analyzing your costs with AWS Budgets](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/budgets-managing-costs.html)
+ [Analyzing your costs with Cost Explorer](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/cost-explorer-what-is.html)
+ [Managing AWS Cost and Usage Reports](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/billing-reports-costusage-managing.html)
+ [AWS Cost Categories](aws-cost-management/aws-cost-categories/)
+ [Managing your costs with AWS Cost Categories](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/manage-cost-categories.html)
+ [Creating cost categories](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/create-cost-categories.html)
+ [Tagging cost categories](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/tag-cost-categories.html)
+ [Splitting charges within cost categories](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/splitcharge-cost-categories.html)
+ [AWS Cost Categories Features ](https://aws.amazon.com/aws-cost-management/aws-cost-categories/features/)
**Related examples:**
+ [Organize your cost and usage data with AWS Cost Categories](https://aws.amazon.com/blogs/aws-cloud-financial-management/organize-your-cost-and-usage-data-with-aws-cost-categories/)
+ [Managing your costs with AWS Cost Categories](https://aws.amazon.com/aws-cost-management/resources/managing-your-costs-with-aws-cost-categories/)
# COST03-BP04 Establish organization metrics
Establish the organization metrics that are required for this workload. Example metrics of a workload are customer reports produced, or web pages served to customers.
**Level of risk exposed if this best practice is not established:** High
## Implementation guidance
Understand how your workload’s output is measured against business success. Each workload typically has a small set of major outputs that indicate performance. If you have a complex workload with many components, then you can prioritize the list, or define and track metrics for each component. Work with your teams to understand which metrics to use. This unit will be used to understand the efficiency of the workload, or the cost for each business output.
**Implementation steps**
+ **Define workload outcomes: **Meet with the stakeholders in the business and define the outcomes for the workload. These are a primary measure of customer usage and must be business metrics and not technical metrics. There should be a small number of high-level metrics (less than five) per workload. If the workload produces multiple outcomes for different use cases, then group them into a single metric.
+ **Define workload component outcomes: **Optionally, if you have a large and complex workload, or can easily break your workload into components (such as microservices) with well-defined inputs and outputs, define metrics for each component. The effort should reflect the value and cost of the component. Start with the largest components and work towards the smaller components.
## Resources
**Related documents:**
+ [Tagging AWS resources](https://docs.aws.amazon.com/general/latest/gr/aws_tagging.html)
+ [Analyzing your costs with AWS Budgets](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/budgets-managing-costs.html)
+ [Analyzing your costs with Cost Explorer](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/cost-explorer-what-is.html)
+ [Managing AWS Cost and Usage Reports](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/billing-reports-costusage-managing.html)
# COST03-BP05 Configure billing and cost management tools
| |
| --- |
| This best practice was updated with new guidance on July 13th, 2023. |
Configure cost management tools in line with your organization policies to manage and optimize cloud spend. This includes services, tools, and resources to organize and track cost and usage data, enhance control through consolidated billing and access permission, improve planning through budgeting and forecasts, receive notifications or alerts, and further lower cost with resources and pricing optimizations.
**Level of risk exposed if this best practice is not established:** High
## Implementation guidance
To establish strong accountability, your account strategy should be considered first as part of your cost allocation strategy. Get this right, and you may not need to go any further. Otherwise, there will be unawareness and further pain points.
To encourage accountability of cloud spend, users should have access to tools that provide visibility into their costs and usage. It is recommended that all workloads and teams have the tools configured for the following details and purposes:
+ **Organize:** Establish your cost allocation and governance baseline with your own tagging strategy and taxonomy. Tag supported AWS resources and categorize them meaningfully based on your organization structure (business units, departments, or projects). Tag account names for specific cost centers and map them with AWS Cost Categories to group accounts for particular business units for their cost centers so that business unit owner can see multiple accounts’ consumption in one place.
+ **Access:** Track organization-wide billing information in [consolidated billing](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/consolidated-billing.html) and verify the right stakeholders and business owners have access.
+ **Control:** Build effective governance mechanisms with the right guardrails to prevent unexpected scenarios when using SCP, tag policies, and budget alerts For example, with effective control mechanism, you can prevent teams from creating resources in unsupported Regions.
+ **Current State: **Configure a dashboard showing current levels of cost and usage. The dashboard should be available in a highly visible place within the work environment similar to an operations dashboard. You can use [Cloud Intelligence Dashboard (CID)](https://github.com/aws-samples/aws-cudos-framework-deployment) or any other supported products to create this visibility.
+ **Notifications:** Provide notifications when cost or usage is outside of defined limits and when anomalies occur with AWS Budgets or AWS Cost Anomaly Detection.
+ **Reports:** Summarize all cost and usage information and raise awareness and accountability of your cloud spend with detailed, allocable cost data. Reports should be relevant to the team consuming them and ideally should contain recommendations.
+ **Tracking: **Show the current cost and usage against configured goals or targets.
+ **Analysis: **Allow team members to perform custom and deep analysis down to the hourly granularity, with all possible dimensions.
+ **Inspect:** Stay up to date with your resource deployment and cost optimization opportunities. Get notifications (using Amazon CloudWatch, Amazon SNS, or Amazon SES) for resource deployments at organization level and review cost optimization recommendations (for example, AWS Compute Optimizer or AWS Trusted Advisor).
+ **Trending: **Display the variability in cost and usage over the required period of time, with the required granularity.
+ **Forecasts: **Show estimated future costs, estimate your resource usage, and spend with forecast dashboards that you create.
You can use AWS tools like [AWS Cost Explorer](https://aws.amazon.com/aws-cost-management/aws-cost-explorer/), [AWS Billing](https://aws.amazon.com/aws-cost-management/aws-billing/), or [AWS Budgets](https://aws.amazon.com/aws-cost-management/aws-budgets/) for essentials, or you can integrate CUR data with [Amazon Athena](https://docs.aws.amazon.com/athena/?id=docs_gateway) and [Quick](https://docs.aws.amazon.com/quicksight/?id=docs_gateway) to provide this capability for more detailed views. If you don't have essential skills or bandwidth in your organization, you can work with [AWS ProServ](https://aws.amazon.com/professional-services/), [AWS Managed Services (AMS)](https://aws.amazon.com/managed-services/), or [AWS Partners](https://aws.amazon.com/partners/) and use their tools. You can also use third-party tools, but verify first that the cost provides value to your organization.
## Implementation steps
+ **Allow team-based access to tools:** Configure your accounts and create groups that have access to the required cost and usage reports for their consumptions and use [AWS Identity and Access Management](https://aws.amazon.com/iam/) to [control access](https://docs.aws.amazon.com/cost-management/latest/userguide/ce-access.html) to the tools such as AWS Cost Explorer. These groups must include representatives from all teams that own or manage an application. This certifies that every team has access to their cost and usage information to track their consumption.
+ ** Configure AWS Budgets:** Configure [AWS Budgets](https://docs.aws.amazon.com/cost-management/latest/userguide/budgets-managing-costs.html) on all accounts for your workload. Set budgets for the overall account spend, and budgets for the workloads by using tags. Configure notifications in AWS Budgets to receive alerts for when you exceed your budgeted amounts, or when your estimated costs exceed your budgets.
+ ** Configure AWS Cost Explorer: **Configure [AWS Cost Explorer](https://aws.amazon.com/aws-cost-management/aws-cost-explorer/) for your workload and accounts to visualize your cost data for further analysis. Create a dashboard for the workload that tracks overall spend, key usage metrics for the workload, and forecast of future costs based on your historical cost data.
+ **Configure AWS Cost Anomaly Detection:** Use [AWS Cost Anomaly Detection](https://aws.amazon.com/aws-cost-management/aws-cost-anomaly-detection/) for your accounts, core services, or Cost Categories you created to monitor your cost and usage and detect unusual spends. You can receive alerts individually in aggregated reports, and receive alerts in an email or an Amazon Simple Notification Service topic which allows you to analyze and determine the root cause of the anomaly, and identify the factor that is driving the cost increase.
+ ** Configure advanced tools: **Optionally, you can create custom tools for your organization that provide additional detail and granularity. You can implement advanced analysis capability using [Amazon Athena](https://docs.aws.amazon.com/athena/?id=docs_gateway), and dashboards using [Quick](https://docs.aws.amazon.com/quicksight/?id=docs_gateway). Consider using [Cloud Intelligence Dashboards (CID)](https://www.wellarchitectedlabs.com/cost/200_labs/200_cloud_intelligence/) for pre-configured, advanced dashboards. There are also [AWS Partners](https://aws.amazon.com/marketplace/solutions/business-applications/cloud-cost-management) you can work with and adopt their cloud management solutions to activate cloud bill monitoring and optimization in one convenient location.
## Resources
**Related documents:**
+ [AWS Cost Management ](https://docs.aws.amazon.com/cost-management/latest/userguide/what-is-costmanagement.html)
+ [Tagging AWS resources](https://docs.aws.amazon.com/general/latest/gr/aws_tagging.html)
+ [Analyzing your costs with AWS Budgets](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/budgets-managing-costs.html)
+ [Analyzing your costs with Cost Explorer](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/cost-explorer-what-is.html)
+ [Managing AWS Cost and Usage Reports](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/billing-reports-costusage-managing.html)
+ [AWS Cost Categories ](https://aws.amazon.com/aws-cost-management/aws-cost-categories/)
+ [ Cloud Financial Management with AWS](https://aws.amazon.com/aws-cost-management/)
+ [AWS APN Partners - Cost Management](https://aws.amazon.com/marketplace/solutions/business-applications/cloud-cost-management)
**Related videos:**
+ [ Deploying Cloud Intelligence Dashboards ](https://www.youtube.com/watch?v=FhGZwfNJTnc)
+ [ Get Alerts on any FinOps or Cost Optimization Metric or KPI ](https://www.youtube.com/watch?v=dzRKDSXCtAs)
**Related examples:**
+ [Well-Architected Labs - AWS Account Setup](https://wellarchitectedlabs.com/Cost/Cost_Fundamentals/100_1_AWS_Account_Setup/README.html/)
+ [Well-Architected Labs: Billing Visualization](https://wellarchitectedlabs.com/Cost/Cost_Fundamentals/100_5_Cost_Visualization/README.html)
+ [Well-Architected Labs: Cost and Governance Usage](https://wellarchitectedlabs.com/Cost/Cost_Fundamentals/100_2_Cost_and_Usage_Governance/README.html)
+ [Well-Architected Labs: Cost and Usage Analysis](https://wellarchitectedlabs.com/Cost/Cost_Fundamentals/200_4_Cost_and_Usage_Analysis/README.html)
+ [Well-Architected Labs: Cost and Usage Visualization](https://wellarchitectedlabs.com/Cost/Cost_Fundamentals/200_5_Cost_Visualization/README.html)
+ [ Well-Architected Labs: Cloud Intelligence Dashboards ](https://www.wellarchitectedlabs.com/cost/200_labs/200_cloud_intelligence/)
# COST03-BP06 Allocate costs based on workload metrics
| |
| --- |
| This best practice was updated with new guidance on July 13th, 2023. |
Allocate the workload's costs by usage metrics or business outcomes to measure workload cost efficiency. Implement a process to analyze the cost and usage data with analytics services, which can provide insight and charge back capability.
**Level of risk exposed if this best practice is not established:** Low
## Implementation guidance
Cost optimization is delivering business outcomes at the lowest price point, which can only be achieved by allocating workload costs by workload metrics (measured by workload efficiency). Monitor the defined workload metrics through log files or other application monitoring. Combine this data with the workload costs, which can be obtained by looking at costs with a specific tag value or account ID. It is recommended to perform this analysis at the hourly level. Your efficiency will typically change if you have some static cost components (for example, a backend database running permanently) with a varying request rate (for example, usage peaks at nine in the morning to five in the evening, with few requests at night). Understanding the relationship between the static and variable costs will help you to focus your optimization activities.
Creating workload metrics for shared resources may be challenging compared to resources like containerized applications on Amazon Elastic Container Service (Amazon ECS) and Amazon API Gateway. However, there are certain ways you can categorize usage and track cost. If you need to track Amazon ECS and AWS Batch shared resources, you can enable split cost allocation data in AWS Cost Explorer. With split cost allocation data, you can understand and optimize the cost and usage of your containerized applications and allocate application costs back to individual business entities based on how shared compute and memory resources are consumed. If you have shared API Gateway and AWS Lambda function usage, then you can use [AWS Application Cost Profiler](https://docs.aws.amazon.com/application-cost-profiler/latest/userguide/introduction.html) to categorize their consumption based on their `Tenant ID` or `Customer ID`.
### Implementation steps
+ **Allocate costs to workload metrics:** Using the defined metrics and configured tags, create a metric that combines the workload output and workload cost. Use analytics services such as Amazon Athena and Amazon Quick to create an efficiency dashboard for the overall workload and any components.
## Resources
**Related documents:**
+ [Tagging AWS resources](https://docs.aws.amazon.com/general/latest/gr/aws_tagging.html)
+ [Analyzing your costs with AWS Budgets](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/budgets-managing-costs.html)
+ [Analyzing your costs with Cost Explorer](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/cost-explorer-what-is.html)
+ [Managing AWS Cost and Usage Reports](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/billing-reports-costusage-managing.html)
**Related examples:**
+ [ Improve cost visibility of Amazon ECS and AWS Batch with AWS Split Cost Allocation Data ](https://aws.amazon.com/blogs/aws-cloud-financial-management/la-improve-cost-visibility-of-containerized-applications-with-aws-split-cost-allocation-data-for-ecs-and-batch-jobs/)