Analyze Cost Control Techniques to Reduce Potential Risks

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//This report is based on the cost control and its techniques that are an essential area of concern in the project management. Inefficient cost management causes issues of cost overrun and increases unnecessary financial or investment burden. In this context, the following report covers the details of cost control techniques for the reduction of potential risks along with controls to manage the cost and cost control in project environment and dilemma of cost overrun. Moreover, a review and investigation of cost controls, schedule variances, earned value techniques, and budgeting has also covered under this//
Cost Control Techniques to Reduce Potential Risks
The companies applying cost control techniques ensure that the project stays within the budgets of the company and is allowed to exceed only in a controlled manner by the management of the company (Markgraf, 2015). When the company applies cost control techniques in a project, it is able to reduce the potential risks and receive full anticipated benefits on its completion.
The common cost control techniques applied by companies are:

Cost Change Control System- The cost change control system is the technique that provides a cost baseline on the basis of which the costs can be changed. This system includes the documentation of the forms, tracks of the system, and the approval levels that are necessary to authorize the change (Taylor, 2007). This technique provides a unique way through which the risks in the system are determined at the initial stage, with the help of which steps could be taken later to avoid the risks to occur.
Performance Measurement Analysis- This technique helps in assessing the magnitude of any variance that incurs invariably. Within this technique, there is earned value technique, which compares the cumulative value of the budget with the actual cost control, resource management, and production (Markgraf, 2015).
Earned Value Technique- This technique uses the cost control that is contained within the plan of project management in order to evaluate the project progress and the magnitude of any occurring variable. It involves the key cost/value allotted to each activity, which helps in ensuring that the cost of performing that activity does not exceed. It also helps in the cases when there occurs any risk of exceeding then the company takes steps to ensure that in other activities the cost does not exceed the budget.
Estimate to Complete and Estimate at Completion- The actual cost, the planned cost, and the earned cost are all used altogether to provide a performance measurement of the project of the company (Taylor, 2007). The performance measurement helps in providing the performance standard of the company in the project through which the company could plan better to enhance the performance and reduce the potential risks that are likely to occur in completing the project (See Diagram in Paper on Page 2)

//In the project execution management of cost requires application of specific control measures. In this relation in the following discussion we are exploring the key control measures that can be applied in project management for the purpose of cost control. Along with this an analysis of ...