The term "cost control" can have more than one meaning. Surely steps to avoid doing optional work that costs more than its value-added is an important form of cost control? Yet throughout the world projects are completed every day that include work that has less value than its cost. And as no one is tracking this, it usually happens invisibly.

It is most likely to happen when optional work was scheduled to be performed off the critical path but, due to slippage, winds up on the critical path, thereby acquiring critical path drag...

http://en.wikipedia.org/wiki/Critical_path_drag

...and drag cost:

http://en.wikipedia.org/wiki/Drag_cost

The true cost of a work activity that is on the critical path is the sum of its resource costs and its drag cost (TC = RC + DC).

If an optional activity that is adding $200K to the project's expected monetary value (EMV) and has a resource budget of $50K then migrates to the critical path with drag of 8D at a drag cost $20,000/D, it's true cost = $50K + (8 * $20K) = $210K. Its net value-added then becomes $200K - $210K, or -$10K. Such work needs to either be performed differently (i.e., for lower true cost) or jettisoned, as it is subtracting value from the project investment if it is performed as is.  (And of course, this wasted expense can be far, far more than negative $10,000!)

The tools for managing control of this cost are:

Knowledge/estimation of the value/cost of time.

Critical path drag computation and updating whenever the CP changes.

Drag cost per each activity, in order to compute its true cost.

A value breakdown structure, or VBS, which (a) separates work into mandatory and optional activities, and (b) estimates the expected value-added for all optional activities. All this allows not just prioritization of optional work, but the ability to see when planned work may actually cost more than its worth. 

The VBS concept was introduced in 1999 in the initial edition of my first book Total Project Control. About three years ago, I was surprised to discover that a lot of folks in Europe (and some in Japan!) seem to be using it. A description of the VBS can be found here:

http://en.wikipedia.org/wiki/Value_breakdown_structure

And at Jean-Yves Moine's Cubix Software 3D WBS blog site here:

http://3d-wbs.blogspot.fr/search?q=devaux

And check out Jean-Yves' diagram of the eight-dimensional WBS model: notice how the cost breakdown structure and schedule are directly connected (along the top where it says "Project Control") to the WHY of the value breakdown structure.

http://3d-wbs.blogspot.fr/2014/09/part-136-overall-project-structuration...

Here's a blog at the website of PROMIS, a Norwegian consulting company, that uses the VBS. It is by Kjetil Strand of Agile Contracting and Execution (ACE) and says: "The concept of Value Breakdown Structure was introduced by Stephen Devaux in 1999, and we consider the approach presented in ACE as a reinforcement of this concept."

http://www.promis.no/index.php/en/promisblogg/entry/ace-introduces-value-breakdown-structure

So, in conclusion, I definitely think that the VBS and its data, along with the true cost concept, are important additions to project cost control techniques. But there will be more info in my new book Managing Projects as Investments: Earned Value to Business Value, just out from CRC Press this week:

http://www.crcpress.com/product/isbn/9781482212709

Fraternally in project management,

Steve the Bajan

Hi Athul,

Increasing the productivity has direct impact on cost control.

Regards,

Sunil.