Level up your strategic IT management with fully cost transparent, fine grained Dynatrace Cost Allocation

Due to rapid innovation, the Dynatrace® platform is now utilized across enterprise departments and is invaluable beyond central IT teams. The new, fine-grained Dynatrace Cost Allocation feature enables the automated attribution of Dynatrace costs to your departments, teams, or apps. This significantly reduces overhead and provides new cost transparency and control, extending the existing cost management features of the most customer-friendly licensing model available in the observability market.

In large enterprises, attributing IT costs to various cost centers, teams, or departments can be cumbersome and is typically only possible through significant manual overhead. Sometimes, introducing new IT solutions is delayed or canceled because a single business unit can't manage the operating costs alone, and per-department cost insights that could facilitate cost sharing aren't available.

In scenarios like these, automated and precise cost allocation can make a huge difference. Cost Allocation also unlocks new possibilities for strategic IT management, empowering you to align IT spending with your business priorities and serving as a fundamental prerequisite for adopting FinOps practices.

FinOps, short for Financial Operations, is a methodology combining finance, technology, and business teams to optimize cloud spending and maximize value in cloud environments. Costs and their origin are transparent, and teams are fully accountable for the efficient usage of cloud resources.

Figure 1. Cost allocation with Dynatrace Platform Subscription (DPS)

With the addition of the new Cost Allocation feature, the Dynatrace Platform Subscription now enables the application of FinOps, providing detailed cost transparency in near real-time (data is updated every 15 minutes), which is paramount to taking your strategic IT management to the next level.

Automatically allocate costs to teams, departments, or apps for full cost-transparency

In recent years, the Dynatrace platform expanded with many innovative features covering various use cases, from business insights to software delivery. These enhancements enable you to extract more value from your data, leading to wider adoption across enterprise departments. As Dynatrace now powers many different teams, the Cost Allocation feature helps you better control and prioritize your internal spending.

Incurred usage can be tagged at its origin based on your unique company structure. Also known as "chargeback" or "showback," this functionality enables you to align every aspect of IT expenditure with your organizational framework, as you can now pinpoint exactly where and when costs occur within your organization.

This gives you a better understanding of financial impact and allows for granular strategic decision-making.

Figure 2. Detailed breakdown of incurred costs using the Cost Allocation dashboard

New insights into cloud spend enable strategic prioritization and business alignment

Dynatrace Cost Allocation is a groundbreaking upgrade for your cost management that provides many benefits:

• Business alignment: Cost Allocation ensures that every dollar you spend on IT resources is directly linked to your business priorities.
• Enhanced cost transparency: Enabling detailed tracking and reporting of expenses across various departments and products gives unparalleled visibility into IT costs. This granular level of transparency helps identify cost drivers, monitor usage patterns, and uncover opportunities for cost savings.
• Increased budget control: Cost Allocation empowers organizations to clearly understand their current costs and resource usage for different cost centers and products.
• Better planning and forecasting: By analyzing historical data, organizations can forecast future spending and adjust their budgets, promoting a disciplined approach to IT financial planning.
• Easier Dynatrace rollout across organizations: DPS enhanced by Cost Allocation allows departments to extract value from the Dynatrace platform while only paying for what they need. By leveraging improvements in Identity and Access Management, admins can ensure that Dynatrace users only have access to the data they need to do their jobs.

Explore and visualize your cost data

Allocated costs are stored in the Dynatrace Grail™ data lakehouse, which enables you to utilize the entirety of the Dynatrace platform to analyze, explore, and visualize your data. Start with our ready-made dashboards, customize dashboards to your needs, or create new custom dashboards.

Figure 3. Customize ready-made dashboards or create new custom dashboards for your specific needs.

To try out the new Cost Allocation feature in the Dynatrace Playground, select All dashboards, search for cost, and then open and download the DPS Cost Allocation dashboard.

Use Davis® AI for accurate forecasting or to automatically catch unexpected spending deviations. You can also set up tailored and automated alerts utilizing the Davis Anomaly Detection app. Our comprehensive suite of tools ensures that you can extract maximum value from your billing data, efficiently turning insights into action.

Figure 4: Set up an anomaly detector for peak cost events.

You can also create individual reports using Notebooks-or export your data as CSV-and share it with your financial teams for further processing.

Set up Cost Allocation

Implementing Dynatrace Cost Allocation is straightforward and can be tailored to fit the unique needs of any organization. The process involves configuring cost center and product fields, setting up an allow list for valid values within account management, and using Dynatrace's powerful API to extract and analyze cost data.

Best practices include regularly reviewing cost allocation reports, ensuring all relevant expenses are captured accurately, and refining budget limits based on usage trends.

Head over to Dynatrace Documentation to learn more about how to set up cost allocation in your environment.

Conclusion

Dynatrace Cost Allocation is essential for enterprises that seek to align IT spending with business goals, achieve cost transparency, and maintain strict budget control. By leveraging cost allocation, organizations can optimize their IT investments, drive financial efficiency, and support their overarching business strategy.

With regular updates and comprehensive dashboards, businesses can maintain a clear view of their IT spending, ensuring accountability and fostering a culture of cost consciousness.

Get started with Cost Allocation

Existing Dynatrace customers with a Dynatrace Platform Subscription can integrate Cost Allocation into their IT management strategy anytime, achieving unparalleled transparency and budget control across critical areas. Read more to learn how to activate Cost Allocation in your environment, then download the ready-made Cost Allocation dashboard from Dynatrace Playground and start monitoring your costs.

With the release of Dynatrace SaaS version 1.303, Cost Allocation is available for host monitoring, security protection, and security analytics. Support for additional capabilities will be added in the future. Our documentation provides more details and will help you better understand the existing limitations.

For detailed guidance and support, contact your Dynatrace account manager.

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