A budget cut is something a pm and a whole project team should always be prepared for. It does affect the overall cost estimation of the project, but more than that, a budget cut can result from several issues outside of the project team’s control. It can be difficult to adapt, but a pm should react by taking the resources he/she has and start allocating them to the components most critical to the development of the product. This is why project planning is so important with regards to customer needs and weighted design evaluations. If the budget is not high enough to accommodate all the customer needs, it’s important to focus on the most critical ones and worry less about trivial ones.

For example, I could design a knee brace to provide structural support whilst also integrating a pedometer. If there were budget cuts, I would probably scrap the pedometer and focus on the structural support aspect of the knee brace. Budget cuts can happen, but it takes a pm with engineering intuition to adapt suitable and professionally to the situation, or else the product itself will suffer in the end.