Browse Definitions :
Definition

cost containment

Contributor(s): Matthew Haughn

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

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

SearchCompliance

  • compliance audit

    A compliance audit is a comprehensive review of an organization's adherence to regulatory guidelines.

  • regulatory compliance

    Regulatory compliance is an organization's adherence to laws, regulations, guidelines and specifications relevant to its business...

  • Whistleblower Protection Act

    The Whistleblower Protection Act of 1989 is a law that protects federal government employees in the United States from ...

SearchSecurity

  • RSA algorithm (Rivest-Shamir-Adleman)

    The RSA algorithm is the basis of a cryptosystem -- a suite of cryptographic algorithms that are used for specific security ...

  • remote access

    Remote access is the ability to access a computer or a network remotely through a network connection.

  • IP Spoofing

    IP spoofing is the crafting of Internet Protocol (IP) packets with a source IP address that has been modified to impersonate ...

SearchHealthIT

SearchDisasterRecovery

  • network disaster recovery plan

    A network disaster recovery plan is a set of procedures designed to prepare an organization to respond to an interruption of ...

  • virtual disaster recovery

    Virtual disaster recovery is a type of DR that typically involves replication and allows a user to fail over to virtualized ...

  • tabletop exercise (TTX)

    A tabletop exercise (TTX) is a disaster preparedness activity that takes participants through the process of dealing with a ...

SearchStorage

  • enterprise storage

    Enterprise storage is a centralized repository for business information that provides common data management, protection and data...

  • disk array

    A disk array, also called a storage array, is a data storage system used for block-based storage, file-based storage or object ...

  • optical storage

    Optical storage is any storage type in which data is written and read with a laser. Typically, data is written to optical media, ...

Close