Why Tagging Matters

We've discussed Why FinOps is essential in the cloud. If you have started using the cloud you know the cloud's promise and the potential pitfalls of uncontrolled spending.Now,  I would like to take you into a fundamental practice that empowers effective financial management and efficiency on the cloud: tagging.

Tagging is a resource labeling practice. It is a set of a key and a value pair that is associated with a resource. It might look like just labels you apply to your cloud resources, but don't underestimate their importance.They are a cornerstone of cost management, organization, and automation in the cloud.

Cloud billing is complex and often confusing.  It is a combination of highly variable usage, and very granular usage based pricing.

Tagging is the common way to break down these intricate bills and allocate costs to teams, projects, departments, or any other purpose. Furthermore, tagging is a powerful enabler of automation. You can leverage tags to automate tasks such as resource management, backups, and security policy enforcement. This automation translates to time savings, reduced errors, and increased efficiency.

It enables you to have visibility into  cloud expenditures in your language and have a better understanding where the money goes.

While tagging is a powerful tool,  it can also be very challenging to implement successfully.It requires  an effort to fully cover the resources and their usage with tags.Even with Best Practice and Enforcement in place, which I will get to later, it is unfeasible to enforce tagging policy,  as no one will terminate  a resource, especially in a production environment, just because of missing tags.

Heads up -  I'll be sharing some tagging tips soon. Just a quick note before we dive in – tagging is the most common way for cloud cost allocation, but it's not the only way to do it.

Let me share with you some from my experience on implementing tagging:People tend to forget, use the wrong values, tag their own way or just tag things differently. It gets really hard to pull all the data together and make sense of it.

Retroactively and fixing tags or changes in tagging resources? That can eat up a lot of your DevOps expensive time.

Here are the key elements of implementing tagging strategy

• Establish naming conventions for your tags

• Automate the tagging process, wherever is possible.

• Regularly monitor your resources to detect untagged resources or any inconsistencies

Starting early and keeping things simple is the way to go.

Tagging is a fundamental element. It's about achieving cost visibility, resource optimization, and proactive planning to ensure financial accountability and maximize the value of cloud investments.

However, tagging isn't the only strategy. Cost Allocation Rules can also be used to break down costs based on various parameters. More on that in another post.