Investment appraisal INVA

Assessing the attractiveness of possible investments or projects.

Revision notes

Updates for SFIA 9

Minor readability changes only.
You can move to SFIA 9 when you are ready - SFIA 8 skill descriptions will still be available to use.
Previous SFIA assessments or skills mapping are not impacted by this change.

Guidance notes

Activities may include, but are not limited to:

selecting and using appropriate techniques to compare financial investments and returns
using recognised investment appraisal techniques to compare investment and returns include payback period, accounting rate of return, discounted cash flow (net present value and internal rate of return)
collecting data using appropriate top-down or bottom-up approaches
including other factors into the appraisal approach, such as legal considerations, environmental or social impact, operational benefits and risk
developing scoring methods to allow for subjective benefits or dis-benefits and to aggregate the results of multiple appraisal methods to help compare options
documenting and presenting the results of investment appraisals
establishing investment appraisal as a tool for selecting projects/initiatives for further investigation
identifying possible sources of funding and the impact on the investment appraisal.

Understanding the responsibility levels of this skill

Where lower levels are not defined...

Specific tasks and responsibilities are not defined because the skill requires a higher level of autonomy, influence, and complexity in decision-making than is typically expected at these levels. You can use the essence statements to understand the generic responsibilities associated with these levels.

Where higher levels are not defined...

Responsibilities and accountabilities are not defined because these higher levels involve strategic leadership and broader organisational influence that goes beyond the scope of this specific skill. See the essence statements.

Developing skills and demonstrating responsibilities related to this skill

The defined levels show the incremental progression in skills and responsibilities.

Where lower levels are not defined...

You can develop your knowledge and support others who do have responsibility in this area by:

Learning key concepts and principles related to this skill and its impact on your role
Performing related skills (see the related SFIA skills)
Supporting others who are performing higher level tasks and activities

Where higher levels are not defined...

You can progress by developing related skills which are better suited to higher levels of organisational leadership.

Click to learn why SFIA skills are not defined at all 7 levels.

Show/hide extra descriptions and levels.

Levels of responsibility for this skill

Level 1

Level 1 - Follow: Essence of the level: Performs routine tasks under close supervision, follows instructions, and requires guidance to complete their work. Learns and applies basic skills and knowledge.

Level 2

Level 2 - Assist: Essence of the level: Provides assistance to others, works under routine supervision, and uses their discretion to address routine problems. Actively learns through training and on-the-job experiences.

Level 3

Level 3 - Apply: Essence of the level: Performs varied tasks, sometimes complex and non-routine, using standard methods and procedures. Works under general direction, exercises discretion, and manages own work within deadlines. Proactively enhances skills and impact in the workplace.

Investment appraisal: Level 4

Level 4 - Enable: Essence of the level: Performs diverse complex activities, supports and guides others, delegates tasks when appropriate, works autonomously under general direction, and contributes expertise to deliver team objectives.

Develops and documents investment appraisals for a range of different projects.

Identifies suitable appraisal techniques based on the characteristics of a project.

Collects the information required to create an investment appraisal in collaboration with internal and external stakeholders. Presents findings of investment appraisals to selected stakeholders.

Refines and maintains investment appraisals.

Investment appraisal: Level 5

Level 5 - Ensure, advise: Essence of the level: Provides authoritative guidance in their field and works under broad direction. Accountable for delivering significant work outcomes, from analysis through execution to evaluation.

Advises on investment appraisal approaches and tailors organisational standards to the context of portfolios/programmes.

Leads investment appraisal activities for simple portfolios and programmes and complex projects.

Investment appraisal: Level 6

Level 6 - Initiate, influence: Essence of the level: Has significant organisational influence, makes high-level decisions, shapes policies, demonstrates leadership, promotes organisational collaboration, and accepts accountability in key areas.

Develops organisational policies, standards and guidelines for investment appraisals.

Leads activities to establish consistent appraisal across the component projects and programmes within a portfolio.

Reviews investment appraisals for high-value initiatives to assure their quality.

Leads investment appraisal activities for complex programmes of work and portfolios.

Level 7

Level 7 - Set strategy, inspire, mobilise: Essence of the level: Operates at the highest organisational level, determines overall organisational vision and strategy, and assumes accountability for overall success.