One of the major driving factors of a project is determining the project’s cost and budget, which without a doubt becomes more complicated the longer a project’s duration is. The PMBOK guidebook dedicates an entire chapter towards project cost management as it acknowledges budget estimation as both a timely process and a potential roadblock down the line. According to the PMBOK guide, when determining a project’s cost, a PM must take into account the plan cost management, the estimated costs, a determined budget, and control costs. Plan cost management decides the policies, procedures, and documentation for handing of all expenses, which can be challenging as it requires expert judgment and analytical techniques to form a cost management plan. Estimate costs are an approximation of the financial resources required to complete specific tasks. This can pose a challenge because the approximations are made from what is currently known at the given point in time, which may not be accurate enough to attain an adequate budget.

It can be stated that the greater a project’s duration, the more difficult it is to make precise estimations regarding the long-term budget. Cost control is implemented for the primary purpose of updating a project’s costs with the status of the project itself. How might the determined budget (pg. 208) and estimated costs (pg. 200) be affected as a project becomes more drawn out? How will these factors be affected if a project is instead abruptly cut short? How does a PM handle an alteration in budget after it has already been finalized?

Reference:
PMBOK Guidebook 5th edition, Project Management Institute