Cost Unpredictability Cited as Top Threat: Galorath Reports

Nearly 90% of organizations cite cost unpredictability as top threat, as outlined in Galorath Incorporated’s 2025 State of the Industry Report on Cost, Schedule, and Risk. 

Based on responses from professionals across aerospace, defense, infrastructure, government, and technology, the report identifies cost volatility as the top operational risk for 89% of organizations. The report also highlights a widening gap between strategic priorities and on-the-ground execution, offering data-driven insight into where organizations are falling short, where investment is accelerating, and how project planning must evolve under persistent disruption.

“The past five years have tested every assumption about how projects are planned and delivered,” says Charles Orlando, chief strategy officer at Galorath. “We commissioned this report to go beyond generic market overviews and instead deliver practical, data-backed insight for project, cost, and operations professionals who face these issues daily. For years, Galorath has helped organizations confront estimation as a fragmented, under-leveraged process. This data shows the market is catching up. As AI tools multiply and complexity rises, it’s no longer just about speed; it’s about credibility. That’s the gap Galorath’s AI strategy is built to close.”

Key takeaways:

·        89% of respondents cited unpredictable shifts in labor, materials, and input costs as their top operational risk. Many organizations struggle to adjust budgets and timelines as external forces move faster than their internal tools can accommodate. While no system can eliminate uncertainty, the report suggests that scenario modeling and real-time estimation will be key to making faster, more resilient decisions under pressure.

·        Although 56% of professionals view AI-enabled estimation as essential to long-term success, 63% say they have not yet adopted it. Most cite unclear deployment paths, skills gaps, and limited internal buy-in. But momentum is growing. Many organizations have established AI assessment teams and launched pilot initiatives, with several reporting early-stage integration of tools into real-world workflows. Still, these findings suggest that many organizations remain in a proof-of-concept phase despite growing pressure to operationalize AI for planning and execution.

·        Less than half of respondents reported automating more than half of their estimation and planning workflows. Despite growing access to advanced tools, capability gaps remain a barrier. Many teams lack consistent training in automation, analytics, and estimation methodology. The report emphasizes that unlocking value from automation requires technology adoption and dedicated strategies for workforce enablement.

·        Only 12% of respondents expressed strong confidence in their cost estimates, while over half described their confidence as “moderate.” Manual inputs, legacy tools, and unclear assumptions continue to impact decision-making accuracy. Teams that have adopted predictive modeling and AI-based risk analysis report higher confidence and alignment. The findings suggest that improving both transparency and accessibility of estimation tools is essential to closing the trust gap.

·        Just one-third of organizations said their estimation tools are fully integrated across departments. An additional 11% report operating in completely siloed environments. This fragmentation slows decision-making, complicates oversight, and increases the risk of misalignment between finance, engineering, and program teams. Integration is increasingly viewed not as an IT issue but as a strategic requirement for execution at scale.

·        84% of respondents say environmental, social, and governance (ESG) factors now influence how projects are framed—even if not yet formalized. The report suggests that as ESG priorities become embedded earlier in planning cycles, estimation frameworks must evolve to address long-term impact alongside cost and delivery expectations. Organizations that align sustainability and strategy early may be better positioned for compliance and resilience.