cloud-cost-allocation-model

name	cloud-cost-allocation-model
enabled	true
description	Use when performing cloud cost allocation model — designs a cost allocation and chargeback model for cloud spending across teams, projects, and environments. Covers tagging strategy, allocation rules for shared services, showback/chargeback reporting, and budgeting integration to drive accountability and optimize spending.
required_connections	[{"prefix":"cloud-billing","label":"Cloud Billing Account"}]
config_fields	[{"key":"cloud_provider","label":"Cloud Provider","required":true,"placeholder":"e.g., AWS, GCP, Azure"},{"key":"org_structure","label":"Organization Structure","required":true,"placeholder":"e.g., business units, product teams, cost centers"},{"key":"monthly_spend","label":"Approximate Monthly Cloud Spend","required":false,"placeholder":"e.g., $150,000"}]
features	["COST_MANAGEMENT","FINOPS"]

Cloud Cost Allocation Model

Phase 1: Define Allocation Hierarchy

1. Map organizational structure for cost ownership
   • Business units / departments
   • Product teams / squads
   • Environments (prod, staging, dev, sandbox)
   • Projects or initiatives
2. Identify cost centers and budget owners
3. Define allocation granularity (team, project, environment)
4. Determine showback vs. chargeback model

Allocation Model Decision

Factor	Showback	Chargeback	Hybrid
Organizational maturity	Low	High	Medium
Executive sponsorship	Optional	Required	Recommended
Behavioral impact	Awareness	Accountability	Balanced
Implementation effort	Low	High	Medium
Selected	[ ]	[ ]	[ ]

Phase 2: Tagging Strategy

1. Define mandatory tags for all resources
   • team - owning team
   • environment - prod/staging/dev/sandbox
   • project - project or product name
   • cost-center - financial cost center code
   • managed-by - terraform/manual/other
2. Define optional enrichment tags
3. Implement tag enforcement policies
4. Plan remediation for untagged resources
5. Set up tag compliance monitoring

Phase 3: Shared Cost Allocation Rules

1. Identify shared services and infrastructure
   • Networking (VPC, load balancers, NAT gateways)
   • Security (WAF, firewalls, key management)
   • Monitoring and logging platforms
   • CI/CD infrastructure
   • Shared databases or caches
2. Define allocation method per shared service

Shared Cost Allocation Methods

Shared Service	Proportional (usage)	Even Split	Fixed Ratio	Custom Formula
Networking	[ ]	[ ]	[ ]	[ ]
Security	[ ]	[ ]	[ ]	[ ]
Monitoring	[ ]	[ ]	[ ]	[ ]
CI/CD	[ ]	[ ]	[ ]	[ ]

Phase 4: Reporting & Dashboards

1. Build cost allocation dashboards by team, project, environment
2. Create monthly cost reports for budget owners
3. Implement anomaly detection for unexpected spend
4. Track unit economics (cost per transaction, cost per user)
5. Generate trend reports for capacity planning

Phase 5: Budget Integration

1. Set budgets per team and project aligned to fiscal calendar
2. Configure budget alerts at 50%, 75%, 90%, 100% thresholds
3. Implement approval workflows for budget overruns
4. Create quarterly budget review cadence
5. Feed allocation data into financial planning tools

Counter-Rationalizations

Shortcut	Counter	Why
"We can skip some steps for this case"	Adapt the workflow steps, don't skip them	Skipped steps are where incidents and oversights originate
"The user seems to already know what to do"	Complete all workflow phases with the user	The workflow catches blind spots that experience alone misses
"This is a minor case, full process is overkill"	Scale the process down, don't turn it off	Minor cases become major when unstructured; the process scales, not disappears
"I'll fill in the details later"	Complete each section before moving on	Deferred details are forgotten; real-time capture is more accurate
"The template output isn't necessary"	Always produce the structured output format	Structured output enables comparison, audit trails, and handoff to other teams

Output Format

• Tagging Policy Document: Required and optional tags with enforcement rules
• Allocation Rules: Shared cost distribution methodology
• Dashboard Templates: Cost views by team, project, environment
• Monthly Report Template: Standardized cost report for stakeholders
• Budget Template: Per-team budget with alert thresholds

Action Items

• Get executive sponsorship for allocation model
• Define and publish tagging policy
• Implement tag enforcement and remediation
• Build cost allocation dashboards
• Distribute first monthly allocation reports
• Establish quarterly budget review meetings