You just completed a multi-phase capital project. The assets are in place and in use. Time to celebrate and chalk up a win, right? Maybe.

There is a final step that often gets talked about but rarely completed: a Capex project post-completion review – which is an essential step in proper project management and creating a culture of continuous improvement. A project review, and lessons learned, should be the final step before a project can be officially closed out, and it should be completed sooner, rather than later, while experiences are fresh in everyone’s mind.

Must every project be reviewed? The simple answer is yes but the “cost” (in time, effort, expense, etc.) should not outweigh the benefits. The size, scope, and cost of the project should dictate the level of review needed. For example, a small project might only require a few minutes for a review, while larger expenditures a more in-depth analysis. Either way, there are some guidelines worth following.

First and foremost, for any review to be useful and effective there must be honesty and trust in the process and faith in the intent of the endeavor. It must be clear that a review is *not* about assigning blame, or hyper-focusing on what went wrong. It is an objective analysis of the effectiveness & efficiency of the process in completing the project and whether the desired outcome was achieved.

What went well? Have we achieved the goals of the project? Did we deliver on budget and with the expected results (some results may take longer to see: increased margin, reduced costs, reduced downtime, lower scrap rates, etc)? In the case of multi-year projects with multiple deliverables, each deliverable should have its own review. And it may take several months to get a clear read (recognizing the improvements in a manufacturing process, for example).

What did not go as well? Were the issues that went wrong within the control of the project team? How can we avoid repeating these problems? If issues encountered were outside the scope of the project team, are there steps that can be taken to mitigate risk in the future?

To be effective, results need to be documented and shared in a searchable archive. As part of standard due diligence, all new projects should start with a review of comparable projects and associated lessons learned, and apply it to project justifications and forecasts.

Here, then, are some of the essential components of a sound Capex project post-completion review:

  1. Project Summary – Include the scope of the project and enough detail to provide a full understanding of its rationale. What business need did the project address? What would be the consequences of not undertaking the project? This document covers what went right, what went wrong, and lessons learned.
  2. Team Staffing – A record of who worked on the project and their contact information should questions or issues arise as similar projects are considered.
  3. Project Deliverables – A comparison of planned vs. actual results. Note any changes from this plan (ie, scope creep). Focus on business needs and outcomes and not project costs. This step may take place over several phases. For instance, the installation of a new gantry crane may be successful once demonstrated the crane can safely lift a specified weight. If you’re replacing and upgrading several 5 axis cnc mills, for example you may need several weeks of operation before you can gauge increased productivity and decreased downtime.
  4. Project Costs – How did the actual spend compare to the original plan for the project? Any overruns need to be explained: e.g., poor planning, supplier issues, or scope creep. All factors should be documented with the goal of assisting future projects in avoiding these issues.
  5. Project Schedule – Compare the planned timeline vs. actual execution. This step will help highlight what led to project delays or allowed the project to be completed early. This detail is important in that it can improve future management methodologies and effectiveness.
  6. Transition and Implementation – Cover any issues or challenges that occurred with rolling out the project. The more complex the project, the more thorough this section needs to be. For example, actions to document for an IT ERP rollout could include: How the rollout was communicated; how testing was performed; how “super users” and testers were identified; and, how training was designed and delivered. This information could be immensely useful in assessing future projects.
  7. Recommendations – Highlight lessons learned and recommendations for future projects. The knowledge gained is often hard won and should be used to improve future project management.

In Practice: A Real World Example

Several years ago, “Company A” (in the refinery category) spent a significant portion of its Capex budget on an overseas plant expansion. Ultimately, the project failed and assets had to be written down, negatively impacting the company’s results. Several factors led to the poor performance of the project, some within the control of the project team and some outside their control (world economics and local country issues). No official Capex project post-completion review was concluded. It was as if people simply didn’t want to discuss the project anymore.

Fast forward a few years and a new project was proposed for a large plant expansion overseas. The project would take several years to complete and again require a substantial portion of Company A’s annual capital budget. The proposal was well researched and very well documented. While no actual faults were found with the new proposal, leadership was hesitant to approve the project given the failure of the prior expansion project. The new proposal languished in limbo through two annual planning cycles before officially being rejected without sighting solid business reasoning.

The impact of the project failure was significant. The expansion was never fully realized and, due to economic issues, assets were impaired and write downs had to be taken. The project cost the company millions and lessons were not learned from the failure. Without having a proper post-project evaluation in place, leadership was unable to discern the current project’s differences, and how lessons learned could be applied to avoid a repeat performance. In short, a significant opportunity was missed in the absence of an objective evaluation.

So How Do You Make Post-Completion Reviews Standard Practice?

Anyone that has been involved in delivering even a single project knows that a post-project review is a good practice. Yet, as stated earlier, many (if not most) companies fail to complete them routinely for reasons ranging from the lack of a corporate mandate to the absence of tools perceived to be required to adequately do the job.

To change this dynamic, a Capex project post-completion review should be a requirement of the capital process as laid out in corporate policy. Leadership should expect and demand evaluations, including making them a part of performance reviews. Tying them into the approval process for subsequent projects can also be considered.

Moving to a unified capital planning system such as Finario can have a dramatic impact on post-review compliance. Because all project details, including actuals, can easily be accessed and reported, completing the process is not only easier, but more informed. Moreover, because the review “rides” with the project over time, it can be referred to in detail with changes in leadership, reporting requirements, etc. and leveraged when similar projects arise in the future, even if many years down the road.

So, go ahead, chalk up that win. With a comprehensive post-completion review in place, the project is now officially “closed.”