MODULE 14 - Governance and FinOps
Overview
This module covers governance and FinOps (Financial Operations). You will learn to organize, tag, and optimize your AWS resources to reduce costs.
Learning Objectives
- Implement a tagging strategy
- Manage resource inventory
- Identify optimization opportunities
- Use the AWS pricing calculator
- Apply FinOps practices in the enterprise
Week Content
1. AWS Tags - Resource Organization
┌─────────────────────────────────────────────────────────────┐
│ AWS TAGS │
├─────────────────────────────────────────────────────────────┤
│ │
│ Tags = Key-value metadata on resources │
│ │
│ EC2 Instance: i-0123456789 │
│ ┌─────────────────────────────────────────────────────┐ │
│ │ Tags : │ │
│ │ ┌──────────────┬─────────────────────────┐ │ │
│ │ │ Name │ web-server-prod-01 │ │ │
│ │ │ Environment │ production │ │ │
│ │ │ Project │ e-commerce │ │ │
│ │ │ Owner │ team-platform │ │ │
│ │ │ CostCenter │ CC-12345 │ │ │
│ │ │ CreatedBy │ terraform │ │ │
│ │ └──────────────┴─────────────────────────┘ │ │
│ └─────────────────────────────────────────────────────┘ │
│ │
│ Uses: │
│ • Cost allocation by team/project │
│ • Automation (start/stop by tag) │
│ • Governance and compliance │
│ • Search and inventory │
│ │
└─────────────────────────────────────────────────────────────┘
2. Recommended Tagging Strategy
| Tag | Description | Example | Mandatory |
|---|---|---|---|
| Name | Human-readable name | web-prod-01 | Yes |
| Environment | Deployment env | prod/staging/dev | Yes |
| Project | Project/Application | e-commerce | Yes |
| Owner | Responsible team | team-platform | Yes |
| CostCenter | Cost center | CC-12345 | Yes |
| CreatedBy | Creation method | terraform/manual | No |
| ExpirationDate | Deletion date | 2024-12-31 | No |
3. FinOps - Cost Optimization
┌─────────────────────────────────────────────────────────────┐
│ FINOPS AWS │
├─────────────────────────────────────────────────────────────┤
│ │
│ 1. VISIBILITY │
│ └── Where is the money going? │
│ • Cost Explorer │
│ • Tags for allocation │
│ • Budgets and alerts │
│ │
│ 2. OPTIMIZATION │
│ └── How to reduce? │
│ • Right-sizing │
│ • Reserved Instances │
│ • Spot Instances │
│ • Stop unused resources │
│ │
│ 3. OPERATION │
│ └── How to maintain? │
│ • Approval policies │
│ • Regular reviews │
│ • Automation │
│ │
└─────────────────────────────────────────────────────────────┘
4. Optimization Opportunities
┌─────────────────────────────────────────────────────────────┐
│ TOP 5 AWS OPTIMIZATIONS │
├─────────────────────────────────────────────────────────────┤
│ │
│ 1. UNDERUTILIZED INSTANCES │
│ CPU < 10% on average → Downsize │
│ Potential savings: 30-50% │
│ │
│ 2. UNUSED INSTANCES │
│ Dev/test instances 24/7 → Stop at night/weekend │
│ Potential savings: 60-70% │
│ │
│ 3. UNUSED STORAGE │
│ Unattached EBS volumes → Delete or snapshot │
│ Old snapshots → Retention policy │
│ │
│ 4. RESERVED INSTANCES │
│ Stable workloads → RI 1 year or 3 years │
│ Potential savings: 30-72% │
│ │
│ 5. INSTANCE GENERATIONS │
│ Old generations → Migrate to new │
│ m4 → m5/m6i (better price/performance) │
│ │
└─────────────────────────────────────────────────────────────┘
5. AWS Tools for FinOps
| Tool | Usage | Free |
|---|---|---|
| Cost Explorer | Cost analysis | Yes |
| AWS Budgets | Budget alerts | Yes (2 free) |
| Trusted Advisor | Recommendations | Partial |
| Compute Optimizer | EC2 right-sizing | Yes |
| Pricing Calculator | Estimation | Yes |
Exercise: Optimization Plan
Scenario
Your company has an AWS bill of $10,000/month with:
- 20 EC2 instances (mix t3, m5)
- 10 unattached EBS volumes
- No consistent tagging
- Dev instances running 24/7
Questions
- Which tags do you implement as a priority?
- What are your top 5 optimization actions?
- What savings do you estimate?
- How do you sustain these practices?
Deliverable
5 Optimization Recommendations + Justification:
- Clear recommendation
- Estimated savings
- Implementation effort
- Potential risks
Navigation
- FinOps Concepts
- Validation Quiz - 30 questions to validate your knowledge
- Lab: Cost Optimization
Next week: MODULE 15 - Infrastructure as Code