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Control 3.5: Cost Allocation and Budget Tracking - Portal Walkthrough

This playbook provides step-by-step portal configuration guidance for Control 3.5.

Prerequisites

  • Power Platform Admin role
  • Entra Global Admin role (for Copilot billing)
  • Azure Subscription Owner role (for Azure-based services)
  • Cost Management Reader role

Step 1: Configure Power Platform Usage Tracking

Portal Path: Power Platform Admin Center > Analytics > Capacity

  1. Navigate to Power Platform Admin Center
  2. Select Analytics > Capacity
  3. Review Dataverse, AI Builder, and Copilot Studio capacity
  4. Note consumption by environment

Capacity Types to Monitor:

Capacity Type Unit Typical Allocation
Dataverse Storage GB 10 GB base + per user
AI Builder Credits Credits 1M base for E5, additional purchasable
Copilot Studio Messages Messages Per license allocation
Power Automate Runs Runs Per user or per flow

Step 2: Set Up Cost Allocation by Business Unit

Portal Path: Power Platform Admin Center > Environments > [Environment] > Details

Create environment naming convention for chargeback:

Environment Naming: {BU}-{Zone}-{Purpose}

Examples:
- WEALTH-Z3-PRODUCTION
- LENDING-Z2-DEVELOPMENT
- OPS-Z1-SANDBOX

Business Unit Mapping:

Environment Prefix Cost Center Business Unit Zone
WEALTH CC-1001 Wealth Management 2-3
LENDING CC-1002 Consumer Lending 2-3
OPS CC-1003 Operations 1-2
CORP CC-1004 Corporate 1-3
SHARED CC-1005 Shared Services All

Step 3: Configure Microsoft 365 Copilot Billing

Portal Path: Microsoft 365 Admin Center > Copilot > Billing & usage > Billing policies

  1. Navigate to M365 Admin Center
  2. Go to Copilot > Billing & usage > Billing policies
  3. Click + Add a billing policy
  4. Configure billing policy by department/cost center:
Policy Name User Group Services Budget
Wealth-Copilot Wealth_Users M365 Copilot Chat, SharePoint Agents $5,000/month
Lending-Copilot Lending_Users M365 Copilot Chat $3,000/month
Ops-Copilot Ops_Users M365 Copilot Chat $2,000/month

Step 4: Set Up Azure Cost Management (if applicable)

Portal Path: Azure Portal > Cost Management + Billing > Cost Management

For Azure-based Copilot Studio components:

  1. Navigate to Azure Portal
  2. Go to Cost Management + Billing > Cost Management
  3. Create cost views filtered by:
  4. Resource group (aligned with business unit)
  5. Tags (CostCenter, BusinessUnit, Zone)
  6. Service name (Power Platform, Azure AI)

Tag Requirements:

Tag Name Required Example Values
CostCenter Yes CC-1001, CC-1002
BusinessUnit Yes Wealth, Lending, Ops
Zone Yes Zone1, Zone2, Zone3
Owner Yes email@company.com
Application Yes CustomerServiceBot

Step 5: Build Cost Allocation Dashboard

Portal Path: Power BI Service > Create > Report

Dashboard Components:

Section Metrics Data Source
Total AI Costs Monthly spend, trend Azure Cost Mgmt + PPAC
By Business Unit Cost per BU Tagged resources
By Agent Cost per agent Usage logs
License Utilization Assigned vs. active M365 Admin
Budget vs. Actual Variance Budget system

Sample KPIs:

KPI Calculation Target
Cost per Agent Total cost / Active agents <$500/month
Cost per Interaction Total cost / Interactions <$0.05
License Utilization Active users / Licensed >80%
Budget Variance (Actual - Budget) / Budget <10%

Step 6: Configure Budget Alerts

Portal Path: Azure Portal > Cost Management > Budgets

Create budget alerts for each business unit:

  1. Go to Cost Management > Budgets
  2. Click + Add
  3. Configure budget:
Setting Configuration
Scope Resource group or subscription
Budget Amount Monthly limit
Reset Period Monthly
Alert Conditions 50%, 75%, 90%, 100%
Alert Recipients BU owner, Finance, IT

Step 7: Set Up Chargeback Reporting

Monthly Chargeback Process:

  1. Export usage data from PPAC and M365 Admin
  2. Map consumption to cost centers
  3. Apply rate card for internal pricing
  4. Generate chargeback report by BU
  5. Route to Finance for billing

Rate Card Example:

Service Unit Internal Rate
Copilot Studio Message Per message $0.01
M365 Copilot Chat Per user/month $30
AI Builder Credit Per 1000 credits $5
Dataverse Storage Per GB/month $2

Validation

After completing the configuration, verify:

  1. Environment naming convention applied consistently across Power Platform environments
  2. M365 Admin Center billing policies created for each business unit
  3. Azure Cost Management budgets configured with alert thresholds (50%, 75%, 90%, 100%)
  4. Cost allocation tags (CostCenter, BusinessUnit, Zone, Owner) applied to Azure resources

Expected Result: Cost data is trackable by business unit, budgets are monitored with alerts, and chargeback reporting can be generated monthly.

Back to Control 3.5 | PowerShell Setup | Verification Testing | Troubleshooting

Updated: January 2026 | Version: v1.2