Project cost estimation is the process that takes direct costs, indirect costs and other types of project costs into account and calculates a budget that meets the financial commitment necessary for a successful project. To do this, project managers and project estimators use a cost breakdown structure to determine all the costs in a project. Project cost estimation is critical for any type of project, from building a bridge to developing that new killer app. Everything costs money, so the clearer you are on the amount required, the more likely you and your project team will achieve your objective.