Finance · Investment appraisal · Component
Post-investment review
A scheduled comparison of what an approved project was expected to deliver with what it delivered, and what that teaches.
The deliverable
What it is
Reviews are skipped because they look backwards at a decision nobody can change. Their purpose is forwards: consistent optimism about cost, benefit or timing shows up across several reviews and can then be corrected in future appraisals.
The review is about the quality of the forecast, not the people who made it. Where it becomes a search for blame, sponsors learn to present cautious figures and the appraisals lose their value.
One level in
What it is made of
Each element is a constituent part of the component. Follow one to see the attributes it carries.
Approved baseline
The appraisal as it stood when the project was approved, fixed so the outcome can be compared with it fairly.
3 attributes: Appraisal · Approved · Approved spend
LearnActual outcome
What the project cost, what it has delivered so far, and when the comparison was made.
3 attributes: Actual spend · Delivered benefit · Reviewed
LearnLessons for appraisal
What the gap between forecast and outcome says about how future proposals should be estimated or judged.
3 attributes: Lesson · Bias direction · Change made
Learn
Look for the pattern across reviews. One variance is a project; the same variance five times is a forecasting habit.
The other components in investment appraisal
Project appraisal
The projected cash flows, discount rate, resulting measures and sensitivities for a single proposal to commit capital.
LearnInvestment criteria
The standards every proposal to commit capital is judged against, and the approval authority at each size of commitment.
Learn