Budgets Kill Projects

Challenging the common belief that

all Projects benefit from budgets

COMMENTARY

By Thomas Walenta                               

Hackenheim, Germany

Abstract

Project budgets are widely regarded as indispensable instruments of planning, governance, and control. Consequently, project success is frequently assessed by adherence to approved budget baselines, while significant effort is devoted to improving the accuracy of cost estimation and forecasting. This paper challenges that prevailing assumption by arguing that budgets are fundamentally predictions about an uncertain future and therefore become progressively less appropriate as the complexity, novelty, and uncertainty of projects and programs increase.

This conceptual paper distinguishes between budgets, funding, and investment, arguing that a budget is not an investment but an estimate of the financial resources expected to be required. While budgets provide a useful planning baseline for relatively predictable projects, they become epistemologically problematic for complex projects and benefit-oriented programs, whose objectives, scope, and resource requirements evolve as knowledge is created. Programs such as the Apollo Program, the Manhattan Project, COVID-19 vaccine development, enterprise transformations, and the Olympic Games demonstrate that successful initiatives frequently depend on adaptive funding and the continuous mobilization of financial and non-financial resources rather than adherence to an initial budget.

Drawing on conceptual analysis, published research, and the author’s professional experience, the paper proposes a shift in project governance. Rather than treating budget conformance as the dominant measure of success, governance should emphasize the continual reassessment of resource commitments, adaptive funding decisions, and the realization of strategic value as uncertainty is progressively reduced.

The paper concludes that budgets remain valuable instruments of financial accountability but should inform governance rather than dominate it. As project complexity increases, governance should progressively shift from protecting predetermined budgets toward enabling adaptive resource commitment and value creation.

Introduction

    Budgets kill projects

This statement is deliberately provocative because governments, corporations, project management organizations, and much of the academic literature regard budgets as indispensable prerequisites for projects. Business cases, portfolio selection, investment decisions, and project governance all rely heavily on financial estimates and budget approvals. Techniques such as Earned Value Management (EVM) assume that project performance can be monitored and controlled by comparing actual expenditures with predetermined budgets. Consequently, project success and failure are frequently judged by adherence to budget baselines.

A project budget is essentially a prediction. It estimates the financial resources expected to be consumed over the project’s lifetime and allocates those resources across planned activities and reporting periods. Considerable effort is devoted to improving the accuracy of these predictions through estimating techniques, historical data, expert judgment, and increasingly sophisticated forecasting methods. Once approved, the budget becomes a central governance baseline against which performance is measured, and continuation decisions are made.

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How to cite this paper: Walenta, T. (2026). Budgets Kill Projects: Challenging the common belief that all Projects benefit from budgets, PM World Journal, Vol. XV, Issue VIII, August.  Available online at https://pmworldjournal.com/wp-content/uploads/2026/08/pmwj167-Aug2026-Walenta-Budgets-Kill-Projects.pdf

About the Author

Dr. Thomas Walenta

Hackenheim, Germany

Dr. Thomas Walenta, DBA, PMP, PgMP, PMI Fellow, worked as a Project and Program Manager at IBM from 1983 to 2014. Most recently, he was responsible for a program encompassing all of IBM’s business with a global client in the EMEA region, with teams in India, Japan, and across Europe. Thomas built his first PMO in 1995 and started his first program in 2002. He led the PMI Frankfurt Chapter from 1998 to 2005, increasing membership from 111 to 750 and the annual budget to 100K Euro. He teaches PM at the University of Applied Sciences Darmstadt and has been a project management consultant since 2014.

Thomas he held a variety of volunteer positions for PMI, including serving as the final juror for the PMI Project of the Year award, a member of the PMI Board nomination committee, an auditor for PMI‘s Registered Education Provider Program, a writer/reviewer of PMP Exam questions, and a significant contributor to PMI‘s first standards on Program Management and Portfolio Management. Thomas served on PMI’s Ethics Review Committee from 2011 to 2016. He received PMI’s Fellow Award in 2012.Thomas has been a member of GPM/IPMA since 1996.

He was elected by PMI membership to serve on the PMI Board of Directors from 2006 to 2011 and for a second term from 2017 to 2019. As a speaker at global project management events in Tokyo, Moscow, São Paulo, Little Rock, and across Europe, Thomas significantly expanded his professional network and is regarded as an experienced and skilled advisor and mentor. He has been an honorary global advisor for the PM World Journal since 2019.  Thomas is based in Hackenheim, near Frankfurt, Germany and can be contacted at thwalenta@online.de  or www.linkedin.com/in/thwalenta/