Feasibility study of a project
A feasibility study is used to assess whether a proposed project should be undertaken. It does this by assessing feasibility in four area:
- Economic feasibility – money
- Technical feasibility – hardware/software
- Operational feasibility – resources
- Schedule feasibility – time
Based on the outcome of a feasibility study a project manager will be able to decide whether a project is worth doing or if the costs are too high and there for the project is not feasible.
- Economic feasibility:
Economic feasibility relates to the budget for a project and how money will be spent. It overlaps with other areas of feasibility as there are often financial costs related to purchasing new hardware and software(technical), training staff, hiring resources and costs associated with timelines running past deadlines(schedule).
- Technical feasibility:
Technical feasibility relates to whether hardware and software within a business can cope with a proposed new system, and if not weather it is feasible to purchase new technology. Here all hardware and software would be justified in whether it is necessary for the new system.
- Operational feasibility:
Operational feasibility relates to whether the resources will be able to handle the new system.
Factors that would need to be considered include the technical skills of the resources, as well whether or not training will be necessary for the resources and what material would be needed for training, such as training manuals.
- Schedule feasibility:
Schedule feasibility relates to the amount of time allocated to the development of the new system. Here the time frame would be assessed, as projects that run overtime can have both a financial and organisational impact on a business.
Conducting a feasibility study in a Real time project
“What” is the need of feasibility study?
- To conduct an assessment, required to practically achieve the proposed system
- To know the technology required, do we have it or can we create the technology to do this?
- To know the resources that we need
- To know the scope of getting return on investment?
“when” do we perform feasibility study?
- Feasibility study is done during the project life cycle
- After the business case.
“why” do we perform feasibility test?
- To determine the factors that will make the business opportunity a success.
“how” do we perform feasibility study?
- By conducting a preliminary analysis
- By preparing a project income statement
- By conducting a market survey
- By planning the organisational resources for operations
- By reviewing the analysed data
- By making go/no-go decision
Preparing feasibility study report with these aspects in mind
- by providing executive report
- by describing product/services required
- technology considerations
- product/service in market place
- marketing strategy
- organisation resources
- time schedule
- financial projections
- finding of recommendations about -technology, marketing, organisation and financial