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Multi-cloud environments are complex. Between complicated pricing structures and novel cloud services, enterprises are faced with a huge challenge when it comes to effectively managing these distributed networks.

One solution to these multi-cloud challenges is to enact a consistent and effective tagging strategy. When done correctly, tagging can contribute greatly to cloud spend management efforts. However, properly centralizing tagging efforts isn’t without its challenges. Many organizations have trouble with consistent naming and assigning responsibility.

Read on to learn why centralized tagging is a vital process within cloud spend management efforts and which strategies can help you overcome tagging challenges.

Why Practice Tagging?

Tagging is an important part of any organization’s cloud governance strategy. In the context of the cloud, tags are metadata values that contain keys and values to help users organize and make sense of their cloud data. Tagging is essential because it helps to efficiently optimize costs across cloud providers by assigning useful information to any resource within your cloud infrastructure.

By categorizing these cloud resources, your organization can expect a variety of benefits. Cloud management teams will have a better understanding of cost allocation, opening the door to an effective cost optimization strategy. In addition to minimizing costs, tagging can improve software compliance by allowing members of the organization to more effectively find cloud resources no matter where they are in the cloud infrastructure. As well, tagging enables better security across your organization’s cloud infrastructure by categorizing resources based on their security level.

The key to a successful tagging strategy that can achieve these benefits is defining tagging policies extremely clearly. There should be a consistent set of tags specifically for governance purposes that apply globally. Servers, storage volumes, databases, and load balancers should all be tagged with the name of the provisioning user, as well as the team or department that they belong to. Some organizations may also implement project or application-based tags, depending on their specific demands. This means tags must be applied consistently by all applications and teams. Without a clear, easy-to-understand tagging policy, individuals are bound to use variations of the same tag, complicating and damaging the accuracy of reporting efforts.

Challenges with Tagging for Cloud Spend Management

Unfortunately, the intense need for standardization is a primary challenge when tagging for cloud spend management. By nature, optimizing cloud spend management with tagging requires near-perfection every time. This is a difficult task to ask of multiple teams that not only span across different business units but across multiple cloud platforms. Team members may make mistakes when categorizing information, or create redundant tags.

Attaining this perfection becomes even more challenging when businesses go through natural changes. For example, imagine if an organization acquired a smaller competitor, and wanted to make use of their data and information. This presents a huge challenge for central IT teams since they must find and track existing tags and change them to conform with the present tagging strategy. This can be taxing and expensive for central IT.

Even within an organization, introducing a new cloud platform can complicate tags significantly. This is because tags behave differently on different platforms, making unity much harder. Because of these significant challenges, organizations need to evaluate tagging strategies very closely.

How to Effectively Tag for Cloud Spend Management

Although implementing a quality tagging strategy isn’t always simple, tagging is still worth the investment. This is especially true if your organization is capable of automating processes. It is vital to use a disciplined approach with a strong foundation that includes policies that encourage good tag hygiene.

To create the best tagging policy, be sure to plan a detailed strategic rollout process. Here are some factors to consider:

  • Define the policy. It is extremely helpful to have a centralized IT team own this process whenever possible, as they will be able to best define a global tagging policy in a consistent way. Don’t forget to get buy-in and feedback from key stakeholders before implementing this policy.
  • Carry out consistent reporting. Organizations should try to report on their tagging efforts on at least a weekly basis. This will help show the current state of the tagging initiative, and allow them to track improvements in tag coverage, making the benefits of your tagging efforts measurable.
  • Alert team members to their obligations. Alerts can be as simple as creating signal emails for team members involved with resources that require tags. This way, no cloud resource will slip through the cracks uncategorized.
  • Implement automation. Once a functional tagging strategy has been implemented and standardized, organizations should consider automating tagging processes. Establish consistent naming conventions to help automatically categorize these tags into silos. Alerting should also be automated as soon as possible.

To ensure that organizations do this process correctly the first time, many opt to utilize cloud spend management platforms. While these platforms don’t necessarily do all of the heavy lifting, they provide a valuable foundation to build out your cloud optimization strategy. By creating a well-designed tagging strategy focused around cloud spend management, your organization will be able to better execute initiatives such as cloud cost reporting, cloud cost optimization, and cloud security efforts.