How do you monitor and evaluate the performance of your capital projects and investments?

1 Define your objectives and criteria

Before you start any capital project or investment, you need to have a clear and realistic vision of what you want to achieve and how you will measure your success. You need to define your objectives, scope, budget, timeline, quality standards, risks, assumptions and constraints. You also need to establish the criteria and indicators that you will use to evaluate your performance and compare it with your expectations. These criteria and indicators should be SMART: specific, measurable, achievable, relevant and time-bound. They should also align with your organization's strategic goals and priorities.

2 Track your progress and performance

Once you have defined your objectives and criteria, it is important to track your progress and performance throughout the project or investment lifecycle. Collect and analyze data and information that reflect your actual results and outcomes against your planned targets and baselines. To do this, you can use various tools and methods, such as project management software, financial appraisal techniques like NPV, IRR, payback period, ROI, break-even analysis, KPIs that measure efficiency, effectiveness, impact and value of the project or investment, and BSC which integrates financial and non-financial measures across four perspectives.

3 Review and report your results and outcomes

Regularly and systematically tracking and reviewing your progress and performance is essential to communicate your findings and feedback to stakeholders, such as sponsors, managers, team members, customers, suppliers, regulators, and auditors. You should also highlight your achievements, challenges, lessons learned, and recommendations for improvement. To do this, you can use various tools and formats, such as status reports that provide a summary of performance status and issues at a given point in time; milestone reports which document project deliverables; performance reports that analyze variance and trends; and evaluation reports that evaluate the performance impact and value.

4 Adjust and improve your plan and actions

Monitoring and evaluating your project or investment performance is an ongoing process that requires you to adjust and improve your plan and actions based on the feedback and learning. To address any gaps, deviations or problems that affect performance, you need to identify and implement corrective and preventive actions. Additionally, you should identify and exploit any opportunities or best practices that enhance performance. Change management processes can manage and control changes to scope, schedule, budget, quality, risks or resources, while risk management processes can identify, assess, prioritize, mitigate and monitor any risks that threaten or affect performance. Quality management processes ensure deliverables, outputs and outcomes meet or exceed standards, while continuous improvement processes apply the Plan-Do-Check-Act (PDCA) cycle to plan, implement, check and improve performance.

5 Learn and share your insights and best practices

The final step in monitoring and evaluating your project or investment performance is to capture and document your knowledge, experience, skills, and lessons learned. This should be disseminated and shared with your organization and stakeholders. To do this, you can use various tools and platforms such as lessons learned sessions, knowledge management systems, communities of practice, conferences, workshops, webinars, blogs, podcasts, or social media. These will enable you to present, publish, discuss or exchange your project or investment insights and best practices with a wider audience.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?