In a webinar hosted by CloudZero on Oct. 30, 2025, Larry Advey, Director of Cloud Platform and FinOps and a respected voice in the FinOps community, joined Umesh Rao to deliver a practical session on cloud cost allocation.
The session, titled Three Allocation Mistakes Most FinOps Teams Make, unpacked hard-earned lessons and offered a guided tour of CloudZero’s new Dimension Studio.
We have pulled five key takeaways from the conversation for you, including direct insights from Larry and real-world examples of how allocation accuracy and trust can make or break FinOps success.
1. Why Allocation Still Matters — A Lot
Right out of the gate, Larry framed cloud cost allocation as foundational: “Allocation is really the foundation for understanding one’s cost and details and things, and can be quite complex.” He added that with company growth and scale, allocation “continues to be something that folks are struggling with — and that’s okay.”
When asked about common questions that allocation helps answer, he didn’t mince words: “Is this good spend or bad spend? And is this valuable?” Those are the questions leadership wants answered — and without strong allocation, they’re impossible to answer with confidence.
CloudZero’s own customer data backs this up. In a poll during the webinar, only 45% of attendees said they were confident their allocation method gave them more than 90% coverage. The rest? Still working on it.
2. The Top Three Mistakes In Allocation
Larry outlined three repeat offenders he sees in FinOps allocation practices:
Mistake #1: Boiling the ocean
Too many teams try to get to 100% allocation coverage on Day One. Larry advised starting with what matters most. “Start small. Look at your data, start exploring it. Don’t try to boil the ocean… Identify what’s valuable, what’s missing, where the biggest rocks are.”
Mistake #2: Overlooking accuracy
“Accuracy is important because accuracy helps define various different levels of transparency, of trust,” Larry said. He warned that if stakeholders don’t trust the numbers, they won’t use them. He recommended focusing on “low-hanging fruit” dimensions — like environment, team, or application — as a way to gain momentum.
Mistake #3: Failing to build trust
Allocation must be reviewed and validated with engineers, finance, and product. “You’re enhancing the data through allocations… being able to then show the cost back makes sense,” he explained. “You’re going to build up trust to where they trust you as the FinOps practitioner… because allocation’s not one single silver bullet.”
3. From Metadata To Multidimensionality: A Look Inside Dimension Studio
Umesh walked through a demo of CloudZero’s newly released Dimension Studio — a no-code/low-code environment for creating allocation rules using metadata, telemetry, or custom logic.
Umesh then shared that Dimension Studio was purpose-built for flexibility: “This gives you and your team the ability to make more mistakes and iterate so that you don’t have to be 100% right as you journey towards being 100% accurate.”
He also showcased real customer use cases, such as setting up 42 complex rules for a single dimension, and how visual editing plus YAML-based customization gives both FinOps and engineering teams what they need.
4. Getting To Granular Unit Economics
One of the most compelling parts of the demo was the deep dive into CloudZero’s support for unit economics. From API calls per customer to cost per feature, teams can use telemetry data to trace cost drivers at a granular level.
This isn’t just about show-and-tell dashboards. It’s about action. As Umesh said, “You can start optimizing and making those specific products and features more efficient to make sure that specific customers are more profitable.”
Larry reinforced the importance of this capability when asked during Q&A if CloudZero goes granular: “With CloudZero, you can go very granular down to resources, all the way up to business unit, company, products, services, teams. Any of those can be aligned to a unit economic item.”
“With CloudZero, you can go very granular down to resources, all the way up to business unit, company, products, services, teams. Any of those can be aligned to a unit economic item.”
5. The Real Driver Of FinOps Maturity? Trust
To close out the session, Larry reflected on what he’s seen in the field. At a recent FinOps Foundation event in D.C., he sat in on a chalk talk about adoption.
“There were still lots of folks who are just now learning about what FinOps is… The answers and the information provided by engineers were completely different for the same questions than product and finance.”
His takeaway? It’s not about tooling first. It’s about communication, transparency, and iteration: “Talking to folks and being transparent, being honest and being open and engaging, and understand where their value is at, tends to be the No. 1 success factor within FinOps.”
The Bottom Line
FinOps teams don’t need perfection — they need progress.
As Larry Advey reminded us, the real power of allocation isn’t just in what it explains — it’s in who it empowers. Build trust, start small, and iterate. Because the teams that win with FinOps aren’t the ones who get it perfect from the first day. They’re the ones who learn fast, align often, and keep moving forward.
The Cloud Cost Playbook
The step-by-step guide to cost maturity
