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Cost Allocation

💡 What Is Cost Allocation?​

Cost allocation is the process of assigning costs to different parts of an organization, such as teams, projects, or business units, to accurately track and manage expenses. Vantage provides a few different cost allocation tools, including:

  • Virtual tags: Virtual tags allow you to create consistent and standardized tags across all cloud providers within Vantage. You can tag costs without needing to make changes to your existing cloud infrastructure. Virtual tags are useful for ensuring uniform tagging practices.
  • Cost allocation segments: Cost allocation segments let you create hierarchical structures for your costs, mapping them to various organizational entities, such as business units, teams, or services. Segments ensure that costs are allocated only once, preventing duplication in showback or chargeback scenarios. This tool is ideal for detailed cost tracking and enforcing cost governance, allowing you to identify and address unallocated costs.

💭 Why Should I Use Cost Allocation?​

Using cost allocation tools like virtual tags and cost allocation segments in Vantage helps you gain better control over your cloud spending. Virtual tags ensure consistent and accurate cost tagging across all cloud providers, making your financial reporting more reliable. Cost allocation segments enable detailed tracking and governance of expenses, allowing you to allocate costs effectively.

📝 Cost Allocation Use Cases​

As a financial analyst, you can:

  • Use virtual tags to standardize tagging across all cloud providers without involving the engineering team, ensuring that your financial reports are uniform and reliable.
  • Use segments to identify unallocated costs. Ensure all expenses are properly assigned and accounted for. This improves financial accountability by ensuring no costs are overlooked in your financial reports.

As a cloud operations manager, you can:

  • Use virtual tags for tag consolidation. You may manage a large infrastructure with an inconsistent tagging schema. You also need reports that help you quickly filter and group cloud resources to identify cost-saving opportunities and optimize resource usage, such as changing instance types or selected databases.
  • Use segments to hierarchically map costs to the different cloud operations teams and their corresponding applications you are responsible for, providing a detailed and organized view of cost distribution across your division.

📚 Lesson 1: Create Virtual Tags​

📚 Lesson 2: Create Cost Allocation Segments​

📖 Additional Resources​