Cost Control Philosophy for increased project perfromance

Cost Control Philosophy

An increase in project delays and undesired project scope growth are the most bothersome aspects of project execution for a project manager. These events are accompanied by poor project performance and ultimately the shutdown of a project. Regardless, companies are often uninformed on the philosophy behind project cost management.

The Triple Constraint Triangle provides more insight on the importance of this topic.

Triple Constraint Triangle – Cost, Schedule, and Scope

The success of a project is often measured through Key Performance Indicators (KPI). KPIs with which everyone is familiar are the Cost Performance Index (CPI) and the Schedule Performance Index (SPI). These KPIs are closely related via the Triple Constraint triangle and are, therefore, generally used together to indicate the overall project’s success.

The Triple Constraint Triangle

The Triple Constraint Triangle: The relation between project scope, costs, and scheduling. An increase in project scope leads to higher costs and schedule delays. Project delays lead to an increase in project costs.

While in many companies the individual aspects of the Triple Constraint Triangle are managed via software tools like Primavera, Microsoft Project or even Excel, their correlation is often overlooked. The reason here is that it is already difficult to get a good grip on individual aspects, let alone their relation.

Correct philosophy with the correct cost control tool

A dedicated project cost control software should combine disciplines such as cost estimating, cost control and scheduling into one while allowing the user to keep using the software they are familiar with. Such instrument lends itself as an excellent cost management tool and helps greatly with project performance optimization by connecting the different disciplines in project controls.

Cost management integration diagram

Cost management integration: Project performance is strongly dependent on the adoption of the correct cost control philosophy

To ensure high project performance and associated high KPIs, one must become familiar with the fundamentals of cost control. A prominent one is a well-defined Work Breakdown Structure, a hierarchical structure in which the scope of work is decomposed. This allows for better resource allocation to activities, as well as more accurate KPIs through Earned Value Management (EVM). Earned Value Management not only allows you to look back on project performance but also look ahead and adjust project execution in such a manner that further escalations are prevented and potential opportunities are taken advantage of.


All in all, the way to go when controlling projects is to not only look back on project performance but also to look forward. This is only possible through adopting the correct cost control philosophy, for which the correlation between all cost control aspects must be well understood. A dedicated software which combines different aspects of project controls is particularly suitable for helping its users in doing so. Interested? In the following blog, we dig more into the Work Breakdown Structures for assigning the work-packages / deliverables to understand how it helps in applying the correct cost control philosophy. If you want to read the second blog, please click here.

If you’d like to talk to an expert about Project Cost Management services and tools, please contact us.

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