Cost Optimization Program

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Cost Optimization Program

Cost optimization is about running systems in the most cost-effective way possible while still meeting business needs.

Design Fundamental

There are five fundamental design concepts for cloud cost optimization:

  1. Implement Cloud Financial Management : To succeed financially and accelerate business value realization in the cloud, you need to invest in cloud financial management (CFM)/cost optimization. This requires dedicating time and resources to build capability in this new domain of technology and usage management. CFM/cost optimization should be treated similarly to your security or operational excellence capabilities, with a focus on knowledge building, programs, resources, and processes to become a cost-efficient organization.

  2. Switch To a Consumption-Based Pricing Model : Pay only for the computing resources you need, and scale your usage up or down based on business requirements, rather than relying on complex forecasting. For example, development and test environments are typically only used for eight hours a day during the work week. By stopping these resources when they’re not in use, you could save up to 75% (40 hours versus 168 hours).

  3. Assess Resource Utilization : Track the business value delivered by the workload and the costs associated with it. Use this data to measure the impact of your efforts to increase output and reduce costs.

  4. Focus On Your Core Competencies And Outsource The Rest : DynamoCloud handles the tedious and time-consuming tasks of data center operations, such as racking, stacking, and powering servers. It also removes the burden of managing operating systems and applications with managed services. This frees you up to focus on your customers and business projects, rather than on IT infrastructure.

  5. Identify and Categorize Expenses : The cloud simplifies the accurate tracking of system usage and costs, enabling transparent attribution of IT costs to individual workload owners. This facilitates ROI measurement and provides workload owners with the opportunity to optimize their resources and reduce costs.

Why is cost optimization important?

Cost optimization is important for a number of reasons, including:

  1. Improved financial performance : Cost optimization can help organizations to reduce their overall IT costs, which can lead to improved financial performance. This can be achieved by identifying and eliminating wasteful spending, streamlining operations, and taking advantage of cloud-based economies of scale.
  2. Increased agility : Cost optimization can help organizations to become more agile and responsive to change. By reducing their reliance on expensive IT infrastructure, organizations can more easily scale their operations up or down as needed. This can be especially important for organizations that operate in highly competitive or volatile markets.
  3. Enhanced  customer experience : Cost optimization can help organizations to improve their customer experience by freeing up resources to invest in other areas, such as product development, marketing, and customer support. This can lead to happier customers and increased loyalty.
  4. Enhanced competitive advantage : Cost optimization can help organizations to gain a competitive advantage by reducing their costs below those of their competitors. This can be especially important in industries where price is a major factor in customer decision-making.

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