Tagging strategy: start with these 5 recommendations

Published: May 22, 2024

An efficient tagging strategy is one of the most important items for infrastructure management among many other decisions to achieve efficient cloud management and adopt a FinOps framework. Despite its critical role, many companies still falter in maintaining even a minimum level of organization in this area. This challenge often stems from a lack of information and the difficulty of cultural change among employees, often by attempting to start on an overly ambitious scale.

With this issue in mind, here are 5 recommendations on how to gradually progress in this area and to increase the likelihood of success.

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1. Define basic and mandatory tagging

One of the most common mistakes at the outset of this journey is attempting to implement too many mandatory tags. This can lead to frustration and decreased engagement, as it burdens a team not yet accustomed to such tasks. To mitigate this challenge, we recommend starting with a few essential tags:

  • Application
  • Environment (for example, Production, Homologation, and Development)
  • Cost Center
  • Owner

In addition to defining tagging keys, it’s essential to establish standards for tagging values. Take the term “production” for example. Policies will not be effective if team members use variations such as ‘prod’ or ‘Production’. Therefore, adopting a company-wide standard is crucial for consistency.

2. Choose a single account to initiate policy implementation

To garner support over time, it’s ideal to select one account, potentially the one with the highest spending, to begin enforcing the tagging policy. This approach ensures a smoother transition, rather than abruptly changing procedures overnight.

For instance, on AWS, you can utilize Tagging Policies to establish mandatory rules.

3. Require new resources’ creation with tags

Ideally, all new features should be developed using Infrastructure as Code (IaC), with tagging rules already established. This should be the long-term goal. However, initially, it will be time-consuming to review existing resources and apply tags to all of them. As a first step, it is recommended to require new resources to be created with tags. This will prevent the problem from worsening and initiate the shift in culture and processes.

4. Review the most expensive resources and implement the tagging strategy

Now that we’ve established the rules and the new features in our main account have been created with tags, it’s time to deal with the past. The question arises: where to start? The answer is simple: start where the impact is greatest.

When examining spending on the account, identify the services with the highest costs and prioritize the review and implementation of tags. Over time, you will have a clearer understanding of the company’s main expenses, gradually covering all resources.

5. Spread this practice throughout the company

Once the tagging pilot is up and running in one account, likely, teams will naturally start adopting it in other accounts. Now it’s time to make the tagging policy mandatory, following the same sequence of requiring new features to be created with tags first and then reviewing the biggest problem areas in each account.

By following this process, there is a great chance that, in a few months, you will be much more successful in implementing tagging policies in your company. In this FinOps Foundation podcast, Sarah Kula and Svetlana Pogrebny from the Canadian Institute for Health Information share their learnings, mistakes, and successes in implementing a tagging strategy, following a very similar working model. In a matter of months, they managed to achieve something they hadn’t done in years.

In summary, when organizations follow these 5 steps before using a tagging strategy, they can make a bigger difference with kindness. This step-by-step method doesn’t just make things work better and use resources smarter, it also creates a supportive atmosphere for growth and success in meeting cloud management goals. Start now!

Filipe Barretto is AWS Practice Leader at e-Core and AWS Community Hero. Today, his main goal is to help companies better use cloud computing technologies to stand out.