Evaluating initial assumptions about project cost and schedule, identified in the Project Charter during the initiating process phase, are often times lower; these costs will, at times, increase gradually as the project management team progresses through the phases.
I would argue that many of these estimations, for the most part, are valid based on the expert judgment of the stakeholder’s involved. The inclusion of their experience and historical data can provide a solid foundation for initial assumptions (PMBOK, 2013, p. 204). However, one of the reasons that project cost and schedule estimations can increase is due to unforeseen circumstances; this can be mitigated by creating a risk register and placing other financial and audit processes into the cost-management plan. As the project progresses and there are updates to the product or service, additional costs will occur both internally and externally. For example, as a project continues there may be associated maintenance costs to equipment that are higher due to factors external to the project. Internally, a project may require third-party counsel per sponsor requirements that was unplanned and ultimately increases costs.
One way to address this issue would be to recommend the use of cost estimate tools such as three-point estimating, which I feel may provide those involved in the initiating process phase solid data moving forward. Performing cost and schedule analysis using the ‘most likely’, ‘optimistic’, and ‘pessimistic’ approach requires stakeholders to spend more time and become more realistic in their expectations. Furthermore, for those stakeholders that under or over-estimate cost and schedule this type of estimation balances them out (PMBOK, 2013, p. 205).