What Are Deliverables?

By Markets Fool.com

While deliverables are sometimes the things you get in a box fromAmazon.com, in project management-speak, they're something completely different.

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Deliverables defined
A deliverable is the measurable end result of a project, as spelled out by the project itself. In short, it's the "result" that is delivered to the customer or client -- hence the name "deliverable."

Deliverables explained
A deliverable can be a physical product, such as a semiconductor, an automobile, or a new warehouse. If, however, the project is an analysis, investigation, consultation, or other service, the result could be something intangible, such as a report describing the results of the investigation, a recommended course of action, or a projection of cost savings.

Let's look at a recent announcement from an actual company as an example.

Real-world example
Post Holdings acquired privately held MOM Brands in early 2015. Post announced that it would get $50 million in run-rate "cost synergies" -- meaning cost reductions from the combined operations -- within three years of the acquisition.

In short, the company has identified ways that it will be able to drive costs down. So we know the company has a project in place -- possibly made up of a number of "mini-projects" to merge MOM Brands' operations into existing Post operations. The deliverable for this would be the cost savings identified above. To be clear, there are obviously other big reasons why Post acquired MOM Brands, but let's stick with something that's easy to follow: Post says it will get $50 million in cost savings from the combined operations in three years' time.

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Investor takeaway
While it's really a project management term, looking at a company through a "deliverables" prism can help measure a company's progress.You can also use this concept to review a company's past, as well its execution of current plans. After all, "good" or "bad" leadership is largely a measure of accomplishing results.

When a company announces an initiative and a timeline, it's essentially a project with a deliverable. By gauging the company's ability to deliver on that project and timeline, you can get some idea of management's ability to accomplish goals and deliver results, like Post's execution on delivering the promised cost savings of its recent acquisition. If you're an investor, it can help you to identify how well a company is able to deliver results, both financial and functional.

The article What Are Deliverables? originally appeared on Fool.com.

Jason Hall owns shares of Amazon.com. The Motley Fool recommends Amazon.com and Post Holdings. The Motley Fool owns shares of Amazon.com and Post Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.