COST02-BP01: Develop policies based on your organization requirements

Develop policies that define how your organization will use cloud resources. These policies should be based on your organization's requirements, including compliance, security, and cost management needs. Policies provide the foundation for all other governance activities and should be clearly documented, communicated, and regularly updated.

Implementation guidance

Effective cloud governance starts with well-defined policies that reflect your organization’s unique requirements, constraints, and objectives. These policies serve as the foundation for all governance activities and provide clear guidance for teams on acceptable cloud usage patterns.

Policy Development Framework

Requirements Analysis: Begin by thoroughly understanding your organization’s requirements across multiple dimensions including compliance obligations, security requirements, budget constraints, operational needs, and business objectives.

Stakeholder Engagement: Involve key stakeholders from finance, security, compliance, operations, and business units to ensure policies address all organizational needs and have broad support.

Policy Hierarchy: Establish a clear hierarchy of policies from high-level organizational principles down to specific technical implementation guidelines, ensuring consistency and avoiding conflicts.

Risk-Based Approach: Develop policies that are proportionate to risk levels, with more stringent controls for high-risk activities and more flexibility for low-risk scenarios.

Core Policy Areas

Resource Usage Policies: Define acceptable resource types, sizes, and configurations based on workload requirements and cost considerations. Include guidelines for right-sizing, instance families, and storage classes.

Access and Permissions: Establish policies for who can provision resources, what permissions are required, and how access should be managed across different environments and teams.

Cost Management: Define spending limits, approval thresholds, budget allocation methods, and cost allocation requirements. Include policies for handling budget overruns and cost optimization activities.

Compliance and Security: Ensure policies address regulatory requirements, data protection needs, and security standards that apply to your organization and industry.

Policy Implementation Strategy

Phased Rollout: Implement policies gradually, starting with the most critical areas and expanding over time. This allows for learning and adjustment without disrupting operations.

Automation Integration: Design policies that can be enforced through automated controls where possible, reducing manual oversight burden and ensuring consistent application.

Exception Handling: Establish clear processes for handling exceptions to policies, including approval workflows, documentation requirements, and time-limited exemptions.

Communication and Training: Ensure policies are clearly communicated to all relevant teams and provide training on policy requirements and implementation procedures.

AWS Services to Consider

AWS Organizations

Provides the foundational structure for implementing organizational policies across multiple accounts. Use organizational units (OUs) to group accounts and apply policies consistently.

AWS Service Control Policies (SCPs)

Enable you to implement preventive guardrails that enforce your usage policies at the account level. SCPs can prevent actions that violate organizational policies.

AWS Config

Monitors resource configurations and can automatically evaluate compliance with your organizational policies. Use Config Rules to implement policy checks.

AWS CloudFormation

Enables infrastructure as code with built-in policy enforcement through stack policies and template validation. Ensures resources are provisioned according to organizational standards.

AWS IAM

Implements access control policies that define who can perform what actions on which resources. Use permission boundaries and policies to enforce usage governance.

AWS Systems Manager

Provides policy-based management capabilities including patch management, configuration compliance, and operational procedures that support governance requirements.

Implementation Steps

1. Conduct Requirements Assessment

Identify all organizational requirements including compliance, security, operational, and business needs
Document current state of cloud usage and identify gaps in governance
Engage stakeholders across all relevant departments and teams
Analyze industry best practices and regulatory requirements

2. Develop Policy Framework

Create policy templates and standards for consistent documentation
Establish policy categories and hierarchy structure
Define policy approval and review processes
Create policy versioning and change management procedures

3. Draft Initial Policies

Start with high-priority areas such as security, compliance, and cost management
Use clear, actionable language that can be understood by technical and non-technical stakeholders
Include specific examples and use cases to clarify policy intent
Define measurable criteria for policy compliance

4. Stakeholder Review and Approval

Conduct thorough review with all affected stakeholders
Address feedback and concerns while maintaining policy integrity
Obtain formal approval from appropriate governance bodies
Document any exceptions or special considerations

5. Policy Publication and Communication

Publish policies in accessible locations with clear organization
Conduct training sessions for teams that will be affected by policies
Create quick reference guides and implementation checklists
Establish communication channels for policy questions and clarifications

6. Implementation Planning

Develop detailed implementation plans for each policy area
Identify required tools, processes, and automation capabilities
Create timelines and milestones for policy rollout
Plan for monitoring and compliance measurement

Policy Categories and Examples

Resource Governance Policies

Instance Type Policies: Define approved instance types for different workload categories, with justification requirements for high-cost instances.

Storage Policies: Specify appropriate storage classes for different data types, lifecycle management requirements, and backup policies.

Network Policies: Define acceptable network configurations, security group rules, and connectivity patterns.

Financial Governance Policies

Budget Policies: Establish budget allocation methods, spending limits, and approval thresholds for different teams and projects.

Cost Allocation Policies: Define tagging requirements, cost center assignments, and chargeback/showback procedures.

Procurement Policies: Specify approval processes for Reserved Instances, Savings Plans, and other commitment-based purchases.

Security and Compliance Policies

Data Classification Policies: Define how different types of data should be handled, stored, and protected in the cloud.

Access Control Policies: Specify authentication requirements, authorization models, and access review procedures.

Audit and Monitoring Policies: Define logging requirements, monitoring standards, and incident response procedures.

Operational Policies

Change Management Policies: Establish procedures for making changes to cloud resources and configurations.

Disaster Recovery Policies: Define backup requirements, recovery objectives, and business continuity procedures.

Performance Policies: Specify performance monitoring requirements and response procedures for performance issues.

Policy Lifecycle Management

Regular Review and Updates

Establish regular review cycles (typically quarterly or semi-annually)
Monitor policy effectiveness and compliance rates
Gather feedback from teams and stakeholders
Update policies based on changing business requirements and AWS service updates

Version Control and Change Management

Maintain version history for all policies
Use formal change management processes for policy updates
Communicate changes clearly to all affected parties
Provide transition periods for significant policy changes

Compliance Monitoring

Implement automated compliance checking where possible
Conduct regular audits of policy adherence
Track and report on policy violations and exceptions
Use compliance data to improve policy effectiveness

Continuous Improvement

Analyze policy effectiveness metrics and feedback
Identify opportunities for policy simplification or automation
Benchmark against industry best practices
Evolve policies to support business growth and changing requirements

Common Challenges and Solutions

Challenge: Policy Complexity and Overhead

Solution: Start with simple, high-impact policies and gradually add complexity. Focus on automating policy enforcement to reduce manual overhead. Use risk-based approaches to apply appropriate levels of control.

Challenge: Resistance from Development Teams

Solution: Involve development teams in policy creation, focus on enabling rather than restricting, provide clear rationale for policies, and offer self-service options that comply with policies automatically.

Challenge: Keeping Policies Current

Solution: Establish regular review cycles, monitor AWS service updates and industry changes, create feedback mechanisms for policy users, and use automated tools to identify policy gaps.

Challenge: Balancing Flexibility and Control

Solution: Use graduated controls based on risk levels, provide clear exception processes, implement policies through automation rather than manual processes, and regularly assess the business impact of policies.

Challenge: Policy Enforcement Across Multiple Accounts

Solution: Use AWS Organizations and Service Control Policies for consistent enforcement, implement centralized monitoring and reporting, and establish clear escalation procedures for policy violations.

Best Practices for Policy Development

Make Policies Actionable

Use clear, specific language that can be easily understood and implemented
Provide concrete examples and use cases
Include step-by-step implementation guidance
Define measurable compliance criteria

Ensure Business Alignment

Align policies with business objectives and priorities
Consider the impact on innovation and agility
Involve business stakeholders in policy development
Regularly review business alignment and adjust as needed

Design for Automation

Create policies that can be enforced through automated controls
Use machine-readable policy formats where possible
Design policies to work with existing tools and processes
Plan for automated compliance monitoring and reporting

Plan for Exceptions

Acknowledge that exceptions will be necessary
Create clear exception request and approval processes
Document common exception scenarios
Monitor exception patterns to identify policy improvement opportunities