The Cost Management Framework

 

The Cost Management Framework

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🧾 1. Custom Budgeting Strategy

What: Define budgets and alerts by business unit, environment (Prod/UAT/Dev), and app groups.

Example:

• Set a monthly budget of $8,000 for the HR Application in Production.

• Alert at 80% usage via email and Teams notification.

• Dev/Test environments get auto-shutdown rules outside working hours to stay within a $2,000 cap.

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🏷️ 2. Cost Allocation Model

What: Use of resource tagging, management groups, and subscription design to map spend accurately.

Example:

• Tags like:

  • Environment=UAT

  • CostCenter=Finance

  • Application=PayrollApp

• Assign separate subscriptions for business units like Corporate Services, Operations, and Compliance to generate department-wise chargebacks.

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📊 3. Cost Visibility Dashboards

What: Configure dashboards in Azure Cost Management + Power BI (optional) for financial insights.

Example:

• A dashboard showing top 10 costliest services, monthly spend trends, and cost anomalies across regions.

• Finance can view costs broken down by app or project phase (e.g., Development vs Production).

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🛡️ 4. Governance Guardrails

What: Azure Policies & Blueprints to prevent misconfiguration and overprovisioning.

Example:

• Block provisioning of D-series VMs in Dev environments via Azure Policy.

• Enforce tagging on all resources using Environment, Owner, and Project before allowing deployment.

• Apply auto-shutdown policies for non-prod VMs using built-in policy definitions.

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💰 5. Reservation Planning Guide

What: Plan Reserved Instances and Savings Plans based on usage patterns.

Example:

• Identify that 80% of the Production environment uses D2s_v3 VMs consistently → Recommend 1-year Reserved Instance with payment upfront for max savings.

• Run Azure Advisor reports and filter for "Eligible for Reservation" to identify under-utilized resources.

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⚙️ 6. Automation Guidance

What: Use automation to manage cost via schedules and alerts.

Example:

• Azure Automation Runbook to shut down Dev VMs at 7 PM daily and start at 8 AM.

• Logic App to send cost alerts to Finance when spend crosses 90% of budget.

• Use Azure Function to auto-tag untagged resources based on naming conventions.

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📋 7. Action Tracker

What: A shared, living Excel/Power BI document or tracker to track optimization progress.

Example:

Recommendation	Status	Owner	Impact ($/mo)	Deadline
Right-size 20 UAT VMs	In Progress	Infra Team	$1,200	May 15
Implement Dev Auto-Off	Completed	DevOps	$800	Apr 30

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🔁 8. Review Cadence

What: Schedule structured monthly/quarterly cost reviews.

Example Agenda:

• Review top resource consumers

• Check compliance to budget thresholds

• Evaluate unused resources for decommission

• Plan reservations or savings

• Assign new action items

Participants: Cloud team, Application owners, Finance lead.

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🧠 9. Training and Knowledge Transfer (KT)

What: Enable Customer's internal IT, finance, and app teams to manage cloud spend effectively.

Example:

• Conduct a 1-hour workshop on using Azure Cost Management and Azure Advisor

• Share a "How to read your Azure bill" guide

• Live demo: Setting up budgets, alerts, and cost reports

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Let me know if you'd like this compiled into a presentation slide or Word/PDF format for stakeholder