What role does budgeting play in project management?

Budgeting plays a crucial role in project management by outlining the financial resources necessary to complete project work. This process involves estimating costs associated with different aspects of the project such as labor, materials, technology, and other resources.

By establishing a clear budget, project managers can allocate funds appropriately to ensure that each phase of the project receives the necessary financial support. This helps in tracking expenses against the budget over the project's lifecycle, ensuring that the project remains financially viable and on schedule. Additionally, a well-prepared budget helps in identifying potential financial risks, allowing project managers to take proactive measures to mitigate them.

The other options, while important to project management, do not directly relate to the budgeting process. Monitoring stakeholder satisfaction is more about communication and engagement with those invested in the project. Defining project goals pertains to setting the direction and objectives of the project rather than the financial aspects. Assessing team capabilities focuses on evaluating the skills and resources available for project execution rather than the financial planning involved.