ManufacturingTechnology budgets are typically prepared once a year to align with the annual operating plan. However, underestimation in these budgets can lead to significant cost overruns, impacting the availability of project funds and the ability to deliver projects effectively. Cloud computing platforms are increasingly attractive due to their scalability—allowing resources to be scaled up or down as needed. However, this flexibility comes with a challenge: unexpected costs due to idle instances, temporarily spiked usage, or other unforeseen factors can quickly escalate expenses.
One of the primary challenges IT and Analytics leaders face is estimating operating costs for cloud-based technologies. This is particularly difficult due to the ‘credits’-based resource provisioning model used by many technology and platform service providers, which often combine the consumption of various software services such as data ingestion, data engineering, analytics, and data transfers. Unfortunately, cloud service providers may not provide a clear operating cost estimation model to directly translate the consumption of these credits into currency.
Service overages tend to be more expensive than the standard unit prices of the technology SKUs. If these overages are not anticipated and managed carefully, they can cause significant budget management issues. Therefore, developing estimation methodologies that enable IT and Analytics functions to accurately estimate cloud-based technology operating costs is critical.
