What distinguishes a project cost baseline from a project budget?

The distinction between a project cost baseline and a project budget is rooted in their purpose and structure. The cost baseline is a time-phased budget that includes detailed cost estimates associated with project activities, along with contingency reserves to address potential uncertainties that could impact the project's expenses. This structured approach enables project managers to track costs over time and ensure that the project remains on track financially.

In contrast, a project budget represents the total projected financial resources needed for the entire project, encompassing all planned expenditures, including operational costs and other resources. However, the budget doesn't specifically delineate how these costs are phased over time or how reserves are included to mitigate risks.

This distinction is important in project management as it helps stakeholders understand not only the total amount allocated for the project but also how those funds are anticipated to be spent throughout its lifecycle, allowing for better financial control and monitoring.