"Project cost or budget can be expressed in a couple of different ways - we will use a financial measure as a common approach. This can be on a continuum as an absolute number. The budget is x or the budget is in the range of x to y, or the budget is x with a tolerance of plus or minus z. Cost can also be described in relative termsw, such as low medium, large, or mega."
"The dollar values associated with each of these descriptions can have different values in different environments. A low budget for a project with NASA could be in the tens of millions of dollars, whereas a high-budget project for a non-profit or a startup organization might be $200,000. With the prevalence of offshore development, the absolute definition of these terms is also beginning to change. A $1,000,000 U.S. budget expressed in Indian rupees can become quite large and may qualify as a mega project."
"The definition of these terms enjoys a higher degree of clarity within the same organization or industry. You can talk of a low-budget project or a high-budget project within a Fortune 100 banking environment and they have a clear relative distinction."
"Project cost and project duration have similar key considerations and impacts on projects. Low budgets will force the project team to make artificial decisions to save money, while higher budgets tend to invite overspending without any contribution to the final objectives and a general lack of accountability. Higher budgetsw can help to hide problems until it's too late."
"Even though budgets can be assigned in a vacuum, the rescue manager or project manager should break the total budget down into the detailed components to get a realistic understanding of what is available, when, and if there are some showstoppers right out of the gate."
"In terms of people costs, remember to factor in travel costs, any relevant currency exchanges, and future raises/promotions. In terms of equipment costs, consider leasing as a way to reduce upfront capital costs."
The above is an excerpt from a book written by Sanjiv Purba and Joseph Zucchero, published by McGraw-Hill/Osborne, 2100 Powell Street, 10th Floor, Emeryville, California 94608 U.S.A. Sanjiv has over 20 years of experience managing large projects and many years engaged in rescuing ailing projects.