Browse Definitions :
Definition

cost containment

Cost containment is a process of judiciously reducing costs in a business or limiting them to a constant level.

When performed properly, cost containment can ensure or increase profitability without undue difficulty created for those performing the job.

As a proactive approach, cost containment helps keep expenditures under control as a practice, instead of waiting for costs or profits to show as a problem. Cost containment is not simply a matter of choosing the lowest cost goods, services, materials and cutting off marketing funds. Taking such an extreme approach is liable to make workers' jobs unduly difficult, damage the company reputation for quality and negatively impact brand image and future business. When practiced poorly in the health care sector, cost containment can have real negative effects on lives.

To perform cost containment to the best effect, a company must first perform cost analysis. Rather than making cuts that affect efficacy, needless expenditures may be discovered. Reexamining and choosing from market options may reveal exceptional bargains with quality parity or even an increase. Also setting expenditures such as marketing as a percentage of incoming profits can provide a balanced approach. In short, cost containment can make a business much more cost effective without playing Scrooge, thereby negatively affecting  employee morale, the business and the lives of customers, clients and partners.

This was last updated in March 2018

Continue Reading About cost containment

SearchCompliance

  • information governance

    Information governance is a holistic approach to managing corporate information by implementing processes, roles, controls and ...

  • enterprise document management (EDM)

    Enterprise document management (EDM) is a strategy for overseeing an organization's paper and electronic documents so they can be...

  • risk assessment

    Risk assessment is the identification of hazards that could negatively impact an organization's ability to conduct business.

SearchSecurity

  • cyber espionage

    Cyber espionage, also called cyber spying, is a form of cyber attack that is carried out against a competitive company or ...

  • virus (computer virus)

    A computer virus is malicious code that replicates by copying itself to another program, computer boot sector or document and ...

  • spam trap

    A spam trap is an email address that is used to identify and monitor spam email.

SearchHealthIT

SearchDisasterRecovery

  • risk mitigation

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business.

  • call tree

    A call tree is a layered hierarchical communication model that is used to notify specific individuals of an event and coordinate ...

  • Disaster Recovery as a Service (DRaaS)

    Disaster recovery as a service (DRaaS) is the replication and hosting of physical or virtual servers by a third party to provide ...

SearchStorage

  • cloud storage

    Cloud storage is a service model in which data is transmitted and stored on remote storage systems, where it is maintained, ...

  • cloud testing

    Cloud testing is the process of using the cloud computing resources of a third-party service provider to test software ...

  • storage virtualization

    Storage virtualization is the pooling of physical storage from multiple storage devices into what appears to be a single storage ...

Close