Automating FinOps Infrastructure with Terraform for T2S Services

Introduction

As cloud adoption scales, cost optimization becomes crucial for organizations to maintain financial efficiency while leveraging cloud resources effectively. FinOps (Financial Operations) provides a structured framework to optimize cloud spending while maintaining agility, performance, and security.

At T2S Services, we have automated FinOps infrastructure on AWS using Terraform, ensuring consistency across development (dev), staging (stage), and production (prod) environments.

Key Benefits of This Automation:

• Track and optimize AWS costs using AWS Budgets, Cost Anomaly Detection, and Cost Explorer.
• Automate cost alerts with Amazon SNS notifications.
• Enforce governance and best practices with Infrastructure as Code (IaC).
• Secure Terraform state files using an S3 backend with DynamoDB lock for team collaboration.

By implementing this modular Terraform approach, T2S Services ensures cost efficiency, scalability, and governance across all cloud environments.

Note: Let me know if you encounter any issues with the scripts.

Project Structure

To maintain modularity and scalability, we structured our Terraform project as follows:

t2s-finops/
│── modules/
│   ├── backend/
│   ├── sns_alerts/
│   ├── aws_budgets/
│   ├── cost_anomaly/
│   ├── cost_explorer/
│── environments/
│   ├── dev/
│   ├── stage/
│   ├── prod/
│── README.md

Each environment (dev, stage, prod) contains:

• backend.tf — Defines remote backend storage.
• providers.tf — Specifies AWS provider settings.
• versions.tf — Defines required Terraform versions.
• terraform.tfvars — Holds environment-specific variables.

Step 1: Setting Up the Terraform Backend (S3 & DynamoDB)

To ensure state consistency across teams, we store Terraform state files in an S3 bucket and enable state locking with DynamoDB. Create the following files with the appropriate scripts.

backend/main.tf

resource "aws_s3_bucket" "terraform_state" {
  bucket = var.s3_bucket_name
  acl    = "private"

  versioning {
    enabled = true
  }

  lifecycle {
    prevent_destroy = true
  }
}

resource "aws_dynamodb_table" "terraform_locks" {
  name         = var.dynamodb_table_name
  billing_mode = "PAY_PER_REQUEST"
  hash_key     = "LockID"

  attribute {
    name = "LockID"
    type = "S"
  }
}

backend/variables.tf

variable "s3_bucket_name" { type = string }
variable "dynamodb_table_name" { type = string }

backend/outputs.tf

s3_bucket_name       = "t2s-finops-terraform-state"
dynamodb_table_name  = "t2s-finops-terraform-locks"

Step 2: Setting Up SNS Alerts for Cost Monitoring

AWS SNS is used to send email alerts when cost thresholds are exceeded. Create the following files with the appropriate scripts.

sns_alerts/main.tf

resource "aws_sns_topic" "billing_alerts" {
  name = var.sns_topic_name
}

resource "aws_sns_topic_subscription" "email_subscription" {
  topic_arn = aws_sns_topic.billing_alerts.arn
  protocol  = "email"
  endpoint  = var.alert_email
}

sns_alerts/variables.tf

variable "sns_topic_name" { type = string }
variable "alert_email" { type = string }

sns_alerts/outputs.tf

output "sns_topic_arn" { value = aws_sns_topic.billing_alerts.arn }

sns_alerts/terraform.tfvars

sns_topic_name = "t2s-cost-alerts"
alert_email    = "info@transformed2succeed.com"

Step 3: Setting Up AWS Budgets for Cost Control

AWS Budgets enables real-time cost tracking and proactive cost control. Create the following files with the appropriate scripts.

aws_budgets/main.tf

resource "aws_budgets_budget" "t2s_budget" {
  name              = var.budget_name
  budget_type       = "COST"
  limit_amount      = var.budget_limit
  limit_unit        = "USD"
  time_period_start = "2024-01-01_00:00"
  time_period_end   = "2024-12-31_23:59"
}

aws_budgets/variables.tf

variable "budget_name" { type = string }
variable "budget_limit" { type = number }

aws_budgets/outputs.tf

output "budget_id" { value = aws_budgets_budget.t2s_budget.id }

Step 4: Configuring Cost Anomaly Detection

AWS Cost Anomaly Detection monitors unusual spending patterns. Create the following files with the appropriate scripts.

cost_anomaly/main.tf

resource "aws_ce_anomaly_detection" "cost_anomaly" {
  name       = var.anomaly_name
  threshold  = var.anomaly_threshold
}

cost_anomaly/variables.tf

variable "anomaly_name" { type = string }
variable "anomaly_threshold" { type = number }

cost_anomaly/outputs.tf

output "anomaly_id" { value = aws_ce_anomaly_detection.cost_anomaly.id }

Step 5: Configuring AWS Cost Explorer

AWS Cost Explorer provides detailed cloud cost insights. Create the following files with the appropriate scripts.

cost_explorer/main.tf

resource "aws_cur_report_definition" "cost_report" {
  report_name = var.report_name
}

cost_explorer/variables.tf

variable "report_name" { type = string }

cost_explorer/outputs.tf

output "cost_explorer_id" { value = aws_cur_report_definition.cost_report.id }

Step 6: Configuring Environment-Specific Deployments

Each environment (dev, stage, prod) has its own Terraform configuration. Create the following files with the appropriate scripts.

environments/dev/backend.tf

terraform {
  backend "s3" {
    bucket         = "t2s-finops-terraform-state"
    key            = "dev/terraform.tfstate"
    region         = "us-east-1"
    dynamodb_table = "t2s-finops-terraform-locks"
  }
}

environments/dev/providers.tf

provider "aws" { region = "us-east-1" }

environments/dev/terraform.tfvars

budget_name        = "T2S-Dev-Budget"
budget_limit       = 1000
anomaly_name       = "T2S-Dev-Cost-Anomaly"
anomaly_threshold  = 500
report_name        = "T2S-Dev-Cost-Report"
sns_topic_name     = "T2S-Dev-Billing-Alerts"
alert_email        = "info@transformed2succeed.com"

Cleanup Steps

To remove the infrastructure, execute:

cd environments/dev
terraform destroy -auto-approve
cd ../stage
terraform destroy -auto-approve
cd ../prod
terraform destroy -auto-approve

To delete backend resources:

cd modules/backend
terraform destroy -auto-approve

To clean up local files:

rm -rf .terraform terraform.tfstate*

Conclusion

This Terraform-based FinOps automation empowers T2S Services to:

• Monitor and optimize AWS costs with budgets and anomaly detection.

• Receive real-time cost alerts via SNS.

• Enforce cost governance across environments.

• Secure Terraform state with an S3 backend and DynamoDB lock.

By leveraging AWS Budgets, Cost Explorer, SNS, and Terraform, T2S Services ensures real-time cost efficiency, governance, and automation in a scalable cloud environment.