Improve Cost Visibility and Observability with AWS Cost Categories – Part 2: Hierarchical Structures and Programmatic Implementation

In Part 1 of our series on improving cost visibility and observability, we delved into the fundamentals of AWS Cost Categories and demonstrated how to implement basic grouping techniques. These techniques included using regional dimensions, multiple dimensions, and split charges to enhance cost visibility across your AWS environment. Now, as we venture into Part 2 of the series, we focus on advanced techniques and automation capabilities to further elevate your cost management strategy.

The Need for Advanced Cost Management

As your cloud environment grows to support more complex business workloads, the importance of implementing effective cost categorization cannot be overstated. In this article, we delve deeper into advanced features of AWS Cost Categories, focusing on two key areas:

• Setting up Hierarchical Cost Categories to mirror your organizational structure
• Programmatically creating and managing Cost Categories through AWS APIs and the JSON editor

These advanced techniques serve as vital tools, enabling you to scale your cost management across AWS environments of any size. They also ensure consistent reporting structures that align seamlessly with your business organization.

Prerequisites

Before we embark on this journey, ensure you have the following prerequisites in place:

• An AWS account. If you don’t have one, follow the instructions on how to create and activate it.
• A fundamental grasp of creating Cost Categories.
• Activated Cost allocation tags. Note: It typically takes up to 24 hours for these tags to become available for use.
• Appropriate IAM permissions to access and manage AWS Cost Categories.

Setting up a Hierarchical Cost Category

Consider a scenario where you wish to attain comprehensive visibility into AWS spending across various organizational units such as SecOps and App Foundry. Our goal here is to create a hierarchical reporting structure for their AWS spending, aligning it with the organizational chart.

Creating Hierarchical Structures

Configuring a Hierarchical Cost Category enables businesses to consistently analyze costs across each organizational level using various AWS Cloud Financial Management tools. Establishing this hierarchy involves a two-step process where we first create the child Cost Categories—‘SecOps’ and ‘App Foundry’, and then define the parent Cost Category—‘Department’, thus establishing the desired hierarchical structure.

Programmatically Create Cost Categories

In addition to manual methods, AWS allows you to programmatically create Cost Categories using the AWS API or the JSON Editor, offering a route to more streamlined and automated cost management.

Using the AWS API

Programmatically creating a Cost Category involves calling an API operation from the AWS Cost Explorer Service using the CreateCostCategoryDefinition API. You need to provide crucial information such as a unique name for your Cost Category, rule version, and an array of rules that define how costs should be categorized.

Clean Up

While AWS Cost Categories do not incur any charges, you may want to clear out test configurations to maintain organizational clarity in your cost reporting. Follow simple steps to delete any categories created for testing purposes.

Conclusion

This second part of our AWS Cost Categories series has explored advanced techniques enabling organizations to construct sophisticated cost management structures that align with complex organizational hierarchies and can be managed programmatically at scale.

By leveraging hierarchical Cost Categories, organizations can create multi-level reporting structures that reflect their business organization, enabling consistent analysis across departments, teams, and projects. The programmatic creation capabilities demonstrated here provide the tools needed to automate and standardize Cost Category implementation across large AWS environments.

Remember that effective cost management is an ongoing journey. As your AWS environment and organization evolve, regularly review and refine your Cost Categories to ensure they continue to provide meaningful insights. Consider implementing a governance process for Cost Category changes, especially in large organizations where consistency is crucial for accurate reporting.

Implementing the techniques covered in this series establishes a strong foundation for cloud financial management that will support your organization’s growth and optimization efforts well into the future. We encourage you to start implementing these AWS Cost Categories strategies today to transform your cost visibility and take control of your cloud financial management.