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Prerequisites:

  1. You know how to split your bill between Production and R&D costs.
  2. You choose a metric to follow your product usage: daily active users, total number of customers, total revenue…
  3. You choose a metric to follow your R&D costs: total number of engineers, time spend on the CI per repository…

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Output:

  • A clear report or dashboard to share with your exec team.

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Steps:

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Step 1: Split your bill

Split your bill between Production and R&D / marketplace purchases costs:a. If you have a correct cost labeling strategy in place, directly rely on your labelsb. Create a virtual dimension to correctly split the cost: Prod / Non Prod.
Rule of thumb: if you delete this cost line and the product stops working, it is a Prod cost. If the product keeps working, it is likely a Non Prod cost.
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Step 2: Choose the metrics

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Step 3: Set targets

A number alone says little. Is 0.1€ per active user per month good, or a sign the business is in trouble? Share the targets you want to hit and the reasoning with your exec team. They often already know what is sustainable and should weigh in.
  • In advanced Explorer, look at how the marginal cost moves over time. Does it track your business objectives?
  • Set a target with a min and max boundary. Below which marginal cost do you prioritize cost growth, and above which do you prioritize cost reduction?
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Step 4: Create a report

The report MUST contains:
  • The total cost of the production environment this month and YTD.
  • The marginal cost of the production environment this month and YTD based on the metric above.
The marginal cost value itself does not always mean much. What is important is the trend and the evolution of this marginal cost.
  • The total cost of the non production environment this month and YTD.
  • The marginal cost of the non production environment this month and YTD based on the metric above.
  • The total of credits received from the CSP for the current Year.
  • The savings achieved thanks to your work using reservations / savings plans.
  • If part of the cost is not attributed to a team / feature: show how much it is and its variation.
Never share a dashboard without context.
What additional information could you add to the report?
  • The decomposition of the cost per team / feature if available.
  • If a cost reduction is achieved / a spike happened: the why behind it.
  • If you’re using Costory: you can choose a set of events to include in the report: this will help you understand the why behind the cost changes.
Last modified on June 30, 2026