American Family Insurance is transitioning more workloads to the cloud to gain benefits like scalability, accessibility, and speed to market. Currently, cloud spending is not well tracked or governed. The company is developing tagging strategies for cloud vendors and working to include cloud costs in project portfolio reporting. This will provide more visibility into cloud usage and spending. An experiment is proposed to make individual delivery managers responsible for forecasting and tracking public cloud costs related to their initiatives to improve planning, consumption decisions, and governance of business cloud usage spending.

1. Finding the Silver Lining:
AmFam's Journey to the Cloud

2. American Family Insurance Background
Current State Refresher
AmFam in the Cloud
Tagging Strategy
Bill of IT / Reporting
Challenges / Cloud Usage A3
AGENDA
CONFIDENTIAL AND PROPRIETARY 2

3. CONFIDENTIAL AND PROPRIETARY
OUR OPERATING COMPANIES

4. CONFIDENTIAL AND PROPRIETARY
AMERICAN FAMILY INSURANCE PRODUCTS

5. CONFIDENTIAL AND PROPRIETARY
FINANCIALLY STRONG
2017 2016
Assets (in thousands) $24,233,038 $22,661,640
Equity (in thousands) $8,051,825 $7,759,957
Revenue (in thousands) $9,253,428 $8,725,510
Life insurance in force $97,225,115 $95,560,192
Net income (in thousands) $155,628 $325,579
AMERICAN FAMILY INSURANCE GROUP
Consolidated Highlights
GAAP basis - As of Dec. 31 (in thousands)

6. 2,578 independent contractor agents
8,610 employees
OUR PEOPLE
CONFIDENTIAL AND PROPRIETARY

7. CURRENT STATE - ITFM
7
• Platform for new web applications
• Digital web
• Digital mobile
American
Family
Insurance
Corporate
Finance
Accounting
Budget,
Analysis,
Expense Mgmt
Sourcing
I/S Computing
Services
I/S Financial
Services
ITFM Processes
and Responsibility
Are Here
Bill of IT
Showback
Monthly actual spend; no service
rates
Full year 2017; YTD 2018
Output utilized for CBA’s, retirement
assessments, roadmap discussions,
etc.
Share with Corporate Finance; I/S
leadership
Reports not distributed to the
business divisions
CONFIDENTIAL AND PROPRIETARY

8. CURRENT STATE – PROJECT PORTFOLIOS
8
Business
Driven
Initiative
New product /
system
Enhancement
Operational
Support
Run the
business
Defect
Mandate
IS Driven
Applications
Security
Solution
Delivery
Services
IDM
Infrastructure
Cloud?
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9. UNDERSTANDING THE CLOUD
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10. AMFAM DEFINITION OF “THE CLOUD”
10
Software as a Service (SaaS)
Software as a service (SaaS), is a
model of cloud computing in which
applications (software) are hosted by
a vendor and provided to the user as
a service; licensed on a subscription
basis and are made available to
users over a network, typically the
internet.
Cloud Computing
Cloud computing is the delivery of information technology services over a
network, usually the internet. In the cloud computing model, infrastructure,
data, and software are hosted by a vendor and delivered to the user as a
service, much like a utility company would deliver water or electricity.
Public Cloud
A public cloud is a cloud
infrastructure that is hosted by a
cloud services provider and is made
available to the public via the
internet.
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11. CLOUD VENDORS
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12. BUSINESS VALUE OF CLOUD
12
•Cloud infrastructure scales on demand to support fluctuating workloadsScalability
•Cloud-based applications and data are accessible from virtually any
internet-connected deviceAccessibility
•Developing in the cloud enables users to get their applications to market
quicklySpeed to market
•Hardware failures do not result in data loss because of networked
backupsData Security
•Worldwide access means teams can collaborate from widespread
locationsCollaboration
•Organizations can move more nimbly than competitors who must devote
Information Technology (IT) resources to managing infrastructureCompetitive Edge
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13. AMFAM IN THE CLOUD
13
Innovation
Customer
Applications
Business
Applications
Business
Analytics
• Self service IT for the business
• Experimentation computing platforms
• Introduce evolving technologies
• Platform for new web applications
• Digital web
• Digital mobile
• Platform for big data
• Query and reporting
• All analytics platforms
• Standup test environments: Policy, Claims, Billing Center
• Standup Agent test environments
• Cloud migrations tied to timing of version upgrades
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14. Not a material amount being spent on public cloud
Public cloud tagging strategy not developed / utilized
Bill of IT: Aware of cloud, but not its own data source
SaaS not distinguished from on premise applications
Enterprise Architecture working on Data Center and cloud migration
strategies / roadmap
Mid-2017, Enterprise Architecture started developing a Cloud Service
Provider tagging strategy
Team: EA, Infrastructure, Security, I/S Finance
PUBLIC CLOUD: IN THE BEGINNING (2016 – 2017)
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15. CLOUD SERVICE PROVIDER USER-DEFINED TAGS
15
• Platform for new web applications
• Digital web
• Digital mobile
• Project ID
• Application ID
• Cost Center
Financial
Management
• Information
Classification
• Information
Type
Security
• Created By
• Infrastructure
Tier
• Role
• Fact
Infrastructure
Management
CONFIDENTIAL AND PROPRIETARY

16. Don’t want to have too many tags
Tags need to be used consistently
Information required upfront
Engineers creating the services; act as gatekeepers and understand the
information being requested
Tags need to be standardized
AWS custom tags are free-form
Utilize internal templates
Don’t want to add / remove / change tags often
CSP USER-DEFINED TAG CONSIDERATIONS
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17. Monthly AWS Cost Allocation Report
DATA – CLOUD SERVICE PROVIDER EXPORT
17
LinkedAccountName ProductName UsageType TotalCost user:ApplicationID user:CostCenter user:Project
amfam-preprod Amazon DynamoDB WriteCapacityUnit-Hrs 1.058705 A000879 9326 P013691
amfam-preprod Amazon DynamoDB WriteCapacityUnit-Hrs 1.058705 A000879 9326 P013691
amfam-preprod Amazon DynamoDB WriteCapacityUnit-Hrs 1.058705 A000879 9326 P013691
amfam-preprod Amazon DynamoDB WriteCapacityUnit-Hrs 2.426071 A000879 9326 P013691
amfam-preprod Amazon DynamoDB WriteCapacityUnit-Hrs 1.058705 A000879 9326 P013691
amfam-prod Amazon DynamoDB WriteCapacityUnit-Hrs 0.821037 A000879 9326 P013691
amfam-ieh101 AmazonCloudWatch CW:MetricMonitorUsage 0.03322 LifeAxis
amfam-ieh101 AmazonCloudWatch CW:MetricMonitorUsage 0.002768 LifeNexis
amfam-ieh101 AmazonCloudWatch CW:MetricMonitorUsage 1.228351 LifeAxis 9046 P014274
amfam-ieh101 Amazon Elastic Compute Cloud BoxUsage:c5.4xlarge 5.664 LifeAxis 9046 P014274
amfam-ieh101 Amazon Elastic Compute Cloud BoxUsage:c5.4xlarge 9.912 LifeAxis
amfam-ieh101 Amazon Elastic Compute Cloud BoxUsage:c5.4xlarge 1.416 LifeAxis 9046 P014274
amfam-ieh104 AWS Key Management Service us-east-1-KMS-Requests 1.0779 genlife 9092 P012573
amfam-ieh104 AWS Key Management Service us-east-1-KMS-Requests 0.032976 genlife 9092 P012573
amfam-preprod Amazon Elastic Compute Cloud BoxUsage:r3.xlarge 86.853 finreg 9032 P011070
amfam-preprod Amazon Elastic Compute Cloud BoxUsage:r3.xlarge 148.161 finreg 9032 P011070
amfam-ieh104 Amazon Simple Storage Service TimedStorage-ByteHrs 0.323397 genlife 9092 P012573
amfam-ieh104 Amazon Simple Storage Service TimedStorage-ByteHrs 0.369596 genlife 9092 P012573
amfam-ieh104 AWS Key Management Service us-east-1-KMS-Keys 1.429167 genlife 9092 P012573
CONFIDENTIAL AND PROPRIETARY

18. Tag clean-up
Missing tags
Old tags
Services that cannot
be tagged
Account associations
Combination of tags
TAG MANIPULATION FOR REPORTING
18
Description Project ID Cost Center Application May June July
Description 1 P012733 9031 A000545 229 2,741
Description 2 P014764 9035 A001099 2,361 23,524
Description 3 P012573 (blank) (blank) 15,000 15,000 15,000
Description 4 P012573 (blank) (blank) 1,696 1,636 2,338
Description 5 P013940 9035 None or Multiple 27,620 39,943 19,044
Description 6 P011070 9032 and 9035finreg 5,643 7,036 7,258
Description 7 P013691 9326 A000879 19 19 19
Description 8 P014201 9168 terraform-vsphere 6 14
Description 9 Multiple 9311 - 9318 miocdn or none 585 642 810
Description 10 P012573 9092 Cyber 7 7 7
Description 11 P012806 9035 DH 8,736 9,686 12,329
Description 12 P014192 9093 Developer VDI 642 1,004 1,776
Description 13 P014109 9035 c360 191 198 247
Description 14 P014111 9092 (blank) 457
Description 15 P012573 9092 None or Multiple 8,881 10,066 9,517
Description 16 P013116 9092 None or Multiple 514 274 280
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19. Totals by Service and Account
AWS INVOICE
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20. BILL OF IT
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21. Cloud usage and cost reports created by the cloud engineering support
team
Each report focuses on a specific application or business analytics system
Results are filtered and grouped based on metadata provided by cloud
provider and user-defined tags provided by AmFam
Can be sent via email on a daily, weekly and/or monthly basis
Includes cost comparison to previous timeframes
Can specify any timeframe for the data used
CLOUD REPORTING
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22. PUBLIC CLOUD USAGE REPORT EXAMPLE
22
Daily Total Previous Daily Total Difference MTD Total
$406.05 $681.71 ($275.67) $7,036.52
Grouping Daily Cost MTD Cost Usage Quantity
InfrastructureTier |
Production
$351.42
Down $167.97 (32.34%) from the
previous day of $519.39
$4,848.38
Up $2,418.54 (99.54%) from $2,429.83
as of this date last month
65,549,625.12
InfrastructureTier |
Preproduction
$34.30
Down $107.20 (75.76%) from the
previous day of $141.50
$1,874.50
Down $18,427.56 (90.77%) from
$20,302.06 as of this date last month
56,549,948.24
InfrastructureTier |
Engineering
$17.94
Down $0.50 (2.69%) from the
previous day of $18.44
$268.95
Down $39.11 (12.70%) from $308.06 as
of this date last month
1,762,289.93
InfrastructureTier |
Innovation
$2.03
Up < $0.01 (0.00%) from the
previous day of $2.03
$28.48
Down $0.03 (0.11%) from $28.51 as of
this date last month
29,772.90
InfrastructureTier |
Development
$0.36
Down < $0.01 (0.06%) from the
previous day of $0.36
$16.21
Down $498.24 (96.85%) from $514.44
as of this date last month
7,816,561.26
CONFIDENTIAL AND PROPRIETARY

23. UTILIZING THE DATA TO MAKE DECISIONS
23CONFIDENTIAL AND PROPRIETARY

24. TRACKING / REPORTING ONLY PART OF EQUATION
24
Estimating
Business
Case
Funding Governance
Forecasting
Tracking /
Reporting
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25. CHALLENGES
25
No visibility to cloud spend beyond few I/S leaders
Project Owners Delivery Managers Corporate Finance Business Leaders
Cloud spend governance, accountability not defined
Funding Justification Approvals Prioritization
Impossible to know about all cloud conversations
Business Internal I/S
One individual managing all public cloud spend
Budget/Forecast Actuals
CONFIDENTIAL AND PROPRIETARY

26. EXPANDING THE CLOUD CONVERSATION
26CONFIDENTIAL AND PROPRIETARY

27. BUSINESS CLOUD USAGE A3
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28. Problem Statement
Cloud usage spend - SaaS, PaaS and IaaS (Software, Platform and Infrastructure as a
Service) - is increasing to support agility
Currently no mechanism to get cloud usage cost information into the hands of the
people who are accountable to make best decisions on those costs and the value
provided
Spending more on uncontrolled run costs directly impacts funding available to grow /
improve / invest in new capabilities
Hypothesis
If we track and manage cloud usage costs through the project portfolios, then we will
make these expenses more transparent which will drive better planning and
consumption decisions / behaviors.
CLOUD USAGE A3 OUTPUT
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29. BUSINESS CLOUD USAGE EXPERIMENT
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30. ADDRESSES THE CHALLENGES
30
One Manager
•Individual I/S Delivery Managers responsible to budget / forecast for public
cloud usage related to their initiatives, services and applications
Multiple Conversations
•Infrastructure and Engineering team will work with teams to estimate public
cloud usage, but will not responsible for forecasting / tracking spend or
justifying budgets / deviations
No Governance
•Corporate Finance will govern business cloud usage spend (public cloud and
SaaS)
•Business cases will need to account for cloud usage from Day 1 until it’s
turned off; no differentiation between first year project and ongoing run
No Visibility
•Project portfolio reporting is the main reporting source of I/S spend to the
business
•Business cloud usage costs will not be buried in IT-PPM portfolio
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31. NEXT CHALLENGES
31
Decision Rights
Demand Management
Reporting
CONFIDENTIAL AND PROPRIETARY

32. HOW I/S FINANCIAL SERVICES IS FEELING
32CONFIDENTIAL AND PROPRIETARY

33. QUESTIONS?
33CONFIDENTIAL AND PROPRIETARY