How a post investment review improves future CapEx decisions
Discover how a post investment review enhances future CapEx decisions by highlighting performance gaps, validating assumptions, and improving forecasting accuracy.
From growth initiatives to maintenance CapEx, companies allocate millions to capital projects every year. Yet, all too often, there is no formal evaluation or assessment of whether the initiative delivered the anticipated returns. As a result, senior executives are left with unanswered questions relating to project execution, delivery, and budget.
An essential oversight in the capital expenditure process, a post-investment review (PIR) seeks to establish the facts, compare the projected outcomes with actual performance, and document lessons learned.
In this blog, we address post-investment reviews, analyse the process of conducting them, and investigate the potential impact of technology.
What is a post-investment review
PIRs are vital for continuous improvement and are becoming increasingly required for all capital projects.
They offer insights regarding the capital project, assessing ROI, timelines, benefits realisation, and expenses.
Crucially, the lessons learned from both successes and failures enhance future projects and prioritisation.
Benefits of post-investment reviews
A PIR benchmarks performance against original estimates. Some benefits include:
Improve future performance
A PIR is an opportunity for continual improvement.
If the actual results are unfavourable when compared to the initial projections, the PIR will help you understand what worked well and what needs improvement. This will enable you to refine your approach, implement corrective action(s), and eliminate past mistakes.
Similarly, lessons learned from programmes with favourable results can be applied to future projects, promoting a culture of continuous improvement.
Increased accountability
A PIR ensures the delivery team is held accountable for delivering the project on budget and on time, supporting a culture of ownership around capital expenditures.
Stakeholder satisfaction
Gathering feedback from various stakeholders prevents bias, builds trust, and provides senior executives with a transparent and impartial view of the project based on actual data rather than guesswork.
Enhanced strategic alignment
A robust PIR process keeps all stakeholders focused on strategic objectives and expected outcomes.
Better resource allocation
By analysing historical PIRs, companies can identify which projects consistently deliver value. This will enable organisations to prioritise high-value projects and scale back investments on underperforming initiatives.
Stronger risk management
PIRs can reveal unexpected challenges, enabling companies to strengthen internal controls and mitigate previously unforeseen risks before they impact new projects.
Common PIR disadvantages
Companies may encounter several challenges when conducting PIRs. These can include:
Bias
If the original project team is responsible for post-investment review, the feedback may be biased, leading to skewed results.
Similarly, a blame culture or fear of criticism will impact discussions and reduce the potential for constructive feedback.
Delays
If a PIR is conducted too long after project completion, key individuals may have moved roles or left the organisation, and memories may have faded.
To reduce this risk, some organisations conduct an initial review after three months to document final costs while the information is still fresh.
Company culture
PIRs are sometimes treated as an afterthought rather than a critical stage in the CapEx lifecycle. In these circumstances, the actual PIR process may be flawed, and organisations may fail to:
- Allocate sufficient resources for the assessment
- Effectively implement corrective actions
- Embed best practices in future projects
A PIR may be avoided entirely if benefits fail to materialise, preventing the organisation from learning valuable lessons.
Poor document management
If a PIR is paper based, there is a risk of misplacing important documentation such as budgets, quotes, and approvals.
How to conduct a PIR
The scope of a PIR typically depends on project size and risk.
For instance, the project manager may be required to follow up on small expenditures. On the other hand, a large expansion project will require a more thorough analysis through the post-investment review template.
Many companies prefer to conduct a PIR after three (or six) months, as it allows sufficient time to pass for objective analysis while ensuring participants retain knowledge of the project. Nevertheless, a drawback is that the outcomes might not be visible at this stage, and initial benefits may not have materialised.
For larger projects, a PIR may be initiated 12 or 24 months after implementation (or when the asset was first in operation) to ensure the full benefits have been realised. This typically applies to high-value purchases that exceed a specific threshold.
A typical PIR involves the following steps:
This step involves appointing the person (or team) to run the PIR process.
The person overseeing the review may be an internal person or an external consultant. An internal person will be familiar with the project but may be biased, while an external consultant is likely to offer an impartial view of the project. A hybrid strategy balancing internal expertise with external objectivity is effective.
Once appointed, the person (or team) overseeing the PIR should collate the relevant information. This will include project plans, progress reports, and timelines, as well as the original capital expenditure request to benchmark projections against final deliverables.
At this point, a comprehensive document review is conducted to gain insight into the project. It is also important to note any changes to the original plan, as well as project overruns and/or budget variance, for investigation later in the process.
This stage involves gathering information from key stakeholders, including the original project team. There are several methods for collecting feedback. These include:
- Surveys: ask the project team and others to complete a questionnaire anonymously to gather quantitative data.
- Interviews: A one-on-one interview with a person can encourage candid feedback due to the confidentiality of the answers. The interviewer also has the opportunity to explore responses more thoroughly.
- Meetings: invite relevant stakeholders to participate in a group discussion/workshop to share their experiences, insights, and feedback on the CapEx project. Use the meeting to follow up on the survey results or drill down on specific areas of feedback. Encourage an environment where participants can express their thoughts without fear of reprisal.
After gathering information, the next stage is to analyse both the quantitative and qualitative data and extract key points, lessons, and actions.
This step involves compiling the insights from earlier phases and producing a detailed report that summarises the key findings.
A post-investment review template will include the following sections:
- Executive summary
- Original objectives and forecasts
- Actual outcomes (cost, time, benefits)
- Variance analysis
- Key lessons learned
- Recommendations and actions
A PIR template is available on request.
Present PIR findings to key stakeholders and assign ownership for recommended actions.
Schedule a follow-up review to confirm actions have been implemented and embedded into future projects.
How technology can streamline PIR
Many companies still rely on email approvals, spreadsheets, and paper forms. However, technology can automate and strengthen the entire PIR process.
Introducing eCapEx
eCapEx replaces spreadsheets, emails, and unstable SharePoint solutions with a dedicated platform for managing the full CapEx lifecycle – from prioritisation and budgeting to approvals and post-investment review. The key PIR features in eCapEx include:
Standardised documentation
- Consistent PIR templates
- Conditional logic, skip rules, mandatory fields
- Automated validation and error checking
Automated workflows
- Make PIRs mandatory
- Trigger PIR workflows at fixed intervals (e.g., 12- or 24-months post-implementation)
- Assign actions and automatic reminders
Centralised platform
- Store business cases, budgets, quotes, approvals, and audit trails
- Link PIRs directly to the original CapEx request
- Build a knowledge base of lessons learned and best practices
Graphical dashboards
- Real-time analytics across the entire CapEx portfolio
- Compare forecast vs actual performance
- Identify trends such as recurring budget variance or project overruns
- Schedule automated reports
Conclusion
The CapEx lifecycle spans multiple stages. Yet one critical stage is often neglected: the post-investment review.
PIRs provide objective insights into performance, strengthen governance, and enable continuous improvement. Organisations that embed PIRs into their CapEx processes make better strategic decisions, allocate resources more effectively, and reduce risk.
eCapEx helps capital-intensive industries such as hospitality and manufacturing automate the full CapEx lifecycle — including budgeting, prioritisation, approvals, and post-investment reviews.
Please call 03300 100 000 or contact us to book your eCapEx demonstration or discuss your requirements.