# LSCOST01-BP02 Analyze and optimize vendor cost structures and economic relationships
<a name="lscost01-bp02"></a>

 Vendor economics focuses on optimizing the costs associated with various cloud vendors, software providers, and third-party services used in life sciences research. It aims to maximize value while maintaining the necessary tools and services for effective research. 

 **Desired outcome:** An optimized vendor solution that delivers maximum value through strategic multicloud partnerships, volume-based pricing agreements, and streamlined vendor management processes, resulting in reduced overall cloud and software costs while maintaining access to research tools and services. 

 **Level of risk exposed if this best practice is not established:** Medium 

## Implementation guidance
<a name="implementation-guidance"></a>

 Create a vendor management system that tracks cloud-related contracts, renewals, and usage. 

 Implement a [multicloud](https://aws.amazon.com/multicloud/) strategy to use AWS services and negotiate better rates. 

 Develop a standardized process for evaluating and onboarding new cloud services or research tools. 

 Establish volume-based discounts with key software providers used across multiple research projects. 

### Implementation steps
<a name="implementation-steps"></a>

1.  Establish a vendor management system: 
   +  Select and implement a vendor management solution. 
   +  Document contract terms, renewal dates, and pricing structures. 
   +  Set up automated alerts for contract renewals and reviews. 

1.  Implement a multicloud strategy: 
   +  Assess current cloud service providers and their offerings. 
   +  Develop migration plans for workload distribution. 
   +  Create policies for selecting cloud services across providers. 

1.  Standardize your vendor evaluation process: 
   +  Create a formal evaluation checklist for new services. 
   +  Define approval workflows for new vendor onboarding. 
   +  Establish security and regulatory requirements. 

1.  Negotiate volume-based agreements: 
   +  Identify high-usage software and services. 
   +  Analyze usage patterns across research projects. 
   +  Develop negotiation strategies for bulk pricing. 

1.  Implement continuous improvement: 
   +  Schedule regular vendor performance reviews. 
   +  Monitor market trends and new offerings. 
   +  Update vendor management strategies.