Develop cost-management discipline

Build a cost-aware team culture.

Help your team get comfortable thinking about budgets, spending, and tracking costs. Cost optimization happens at different levels of the organization. So it's important to understand how your workload fits into the bigger picture and supports company goals and FinOps practices. Having visibility into how resources are organized and how financial policies are applied helps you manage your workload in a consistent, efficient way.

Example scenario

Contoso organizes and hosts trade shows. They want to improve how they sell tickets and decide to build a mobile app in-house. The following scenarios walk through how they go from idea to launch, with a focus on making smart cost decisions along the way. The web app is written in .NET, hosted on Azure App Service, and uses Azure SQL Database for its database.

Develop a cost model

Before you can track spending properly, you must build a basic cost model.

A cost model gives you a clearer picture of what things might cost, like infrastructure, support, and setup. It also helps you identify what's driving those costs early on to estimate how changes in usage could affect your budget and revenue over time.

Contoso's challenge

• Contoso wants to build a mobile app to handle ticket sales for their trade shows, but they're not sure what it'll cost, especially because demand can spike.

• They plan to start small and grow, but without a cost model, it's tough to get funding or plan ahead.

Applying the approach and outcomes

• The team maps out different cost scenarios based on the resources they'd need and how usage might grow. They explore a few setups that could handle different traffic levels to get a sense of what their Azure costs might be now and later on.

• They combine rough estimates for infrastructure, team costs, and expected revenue to build a starting model.

• This model helps them predict costs over time as usage increases and gives them a tool that they can keep refining as they make more decisions.

Set a realistic budget

Make sure your budget covers everything that you have to include, like key features, support, training, and room to grow.

After you set a budget, you can set spending limits and get alerts if you're about to go over budget for a specific resource or the whole project.

Contoso's challenge

• In this scenario, the app is in the design phase and Contoso picked out the basic resources that they need.

• Contoso needs to figure out their budget for the mobile ticketing workload.

• Without a solid budget, they risk running out of money, wasting it on things that they don't need yet, delaying the project timeline, or even putting the entire workload at risk.

Applying the approach and outcomes

• As the team refines their cost model, they come up with a confident budget that they can share with stakeholders.

• This budget gives their architect a clear financial target to design around. As more is learned about the implementation and the operations necessary, the workload team expects to need to renegotiate budget a bit so they leave a small buffer.

• The goal is to stay flexible but stick to the budget as closely as possible.

Encourage upstream communication

Encourage upstream communication from architects to application owners.

When your organization makes budget adjustments, real-world learnings from production feedback are just as important as the numbers.

Contoso's challenge

• Contoso's mobile ticketing app is live and working well.

• After reviewing how it's being used, the team realizes that it could be more cost-efficient.

• Since project management and finance seem happy with the results, they're unsure if it's worth bringing up.

Applying the approach and outcomes

• The team is encouraged to treat the budget like it's their own and speak up to product management when they see a better way to meet the app's needs without sacrificing security, reliability, or performance.

• The workload team shares their ideas with stakeholders, and they talk about the pros and cons of making changes.

• The changes are approved, and the savings follow.