A Hidden Pitfall of Cloud Cost Reporting That Will Cost You

• You've followed the FinOps guidelines.
• You engaged key stakeholders.
• You established a robust tagging strategy.
• You implemented cost reports.
• Yet, your cloud costs continue to rise inexplicably

The issue might lie in the frequency of your cost reporting.

Problem: Traditional Cost Reporting

Traditional cost reporting is often done monthly. Which makes sense on the surface with monthly budgets and monthly cloud invoices. While this provides a high-level overview of cloud expenditures, it lacks the granularity needed for real-time cost management. When anomalies are detected, significant financial damage may have already occurred.

Solution: Daily Cost Reports

To address this, impacting changes must be noticed when it's still easy to identify the change. Which question is easier for a team to answer?

Option A: Did anybody make a change yesterday that could impact our cloud cost?

Option B: Has anybody changed over the last 2 months that could impact our cloud cost?

Which option will result in a faster response and quicker resolution.

The Importance of Daily Reports

Imagine a scenario where your standard monthly cloud spend is $100K. On the 3rd of the month, a change results in a daily increase of $333, equating to a 10% hike. If you rely solely on monthly reports, it could take a whole month to detect this $10K increase, translating to a potential annual rise of $120K. This delay impacts operational expenses and diverts engineering resources toward identifying the cause of this surge, leading to lost velocity.

Compounding the problem is the time it will take to track down the root cause. It happened over a month ago, so it will take time to find the event and even more time to figure out why it occurred by searching emails, Teams, or Slack. By the time the issue is identified and resolved, considerable resources have already been wasted.

Conversely, daily reporting allows cloud engineers to spot and address unexpected cost increases promptly. This immediate response prevents shocks in the monthly report and fosters a more proactive approach to cost management, ultimately saving time and resources.

Enhancing Operational Efficiency

Daily cost reports help maintain operational efficiency by enabling quick identification and resolution of cost anomalies. This reduces the strain on engineering teams, allowing them to focus on core development tasks rather than firefighting unexpected expenses. Furthermore, it minimizes the risk of escalating costs that can undermine financial stability and business profitability.

Building a Proactive Cost Management Culture

Implementing daily cost reports is just one way to cultivate a culture of proactive cost management. Engineers and financial teams become more attuned to spending patterns and can make informed decisions swiftly. This proactive stance enhances cost control and contributes to more accurate budgeting and forecasting, aligning financial goals with operational realities.

Conclusion

While monthly cost reports provide valuable insights, they fall short in offering the immediacy needed for effective cost management. Organizations can swiftly identify and address cost anomalies by adopting daily cost reports, ensuring financial stability and operational efficiency. This approach prevents unexpected expenses and fosters a culture of proactive cost management, ultimately driving long-term business success.

CCR Can Help

At CCR, we specialize in helping businesses implement effective cloud cost management strategies. Contact us today to learn how daily cost reporting can transform your approach to cloud spending and safeguard your financial health.