Project Feasibility Study EEE-2131

1. Feasibility Study: A Feasibility study is simply an assessment of the

practicality of a proposed plan or project. A feasibility study is an
analysis that takes all of a project's relevant factors into account--
including economic, technical, legal, and scheduling considerations- to
ascertain the likelihood of completing the project successfully. Project
managers use feasibility studies to discern the pros and cons of
undertaking a project before they invest a lot of time and money into it.
Feasibility studies also can provide a company's management with
crucial information that could prevent the company from entering
blindly into risky businesses. The goals of feasibility studies are as
follows:
To understand thoroughly all aspects of a project, concept, or plan
To become aware of any potential problems that could occur while
implementing the project To determine if, after considering all
significant factors, the project is viable that is, worth undertaking
2. Five Areas of Project Feasibility
A feasibility analysis evaluates the project's potential for success;
therefore, perceived objectivity is an essential factor in the credibility of
the study for potential investors and lending institutions. There are five
types of feasibility study-separate areas that feasibility study examines,
described below.
1. Technical Feasibility: This assessment focuses on the technical
resources available to the organization. It helps organizations determine
whether the technical resources meet capacity and whether the technical
team is capable of converting the ideas into working systems.
Technical feasibility also involves the evaluation of the hardware,
software, and other technical requirements of the proposed system. As
an exaggerated example, an organization wouldn't want to try to put Star
Trek's transporters in their building-currently; this project is not
technically feasible.
2. Economic Feasibility: This assessment typically involves a cost/
benefits analysis of the project, helping organizations determine the
viability, cost, and benefits associated with a project before financial
resources are allocated. It also serves as an independent project
assessment and enhances project credibility-helping decision-makers
determine the positive
economic benefits to the organization that the proposed project will
provide. 3. Legal Feasibility: This assessment investigates whether any
aspect of the proposed project conflicts with legal requirements like
zoning laws, data protection acts or social media laws. Let's say an
organization wants to construct a new office building in a specific
location. A feasibility study might reveal the organization's ideal location
isn't zoned for that type of business. That organization has just saved
considerable time and effort by learning that their project was not
feasible right from the beginning.
4. Operational Feasibility: This assessment involves undertaking a study
to analyze and determine whether and how well-the organization's need
can be met by completing the project. Operational feasibility studies also
examine how a project plan satisfies the requirements identified in the
requirements analysis phase of system development.
5. Scheduling Feasibility: This assessment is the most important for
project success; after all, a project will fail if not completed on time. In
scheduling feasibility, an organization estimates how much time the
project will take to complete.
3. Suggested Components of Feasibility studies:
Once you have finished your basic due diligence, you might consider the
elements below as a template of items to include in your study:
1. Executive summary: Formulate narrative describing details of the
project, product, service, plan, or business.
2. Technological considerations: Ask what it will take. Do you have it? If
not, can you get it? What will it cost?
3. Existing marketplace: Examine the local and broader markets for the
product. service. plan, or business.
4. Marketing strategy: Describe it in detail.
5. Required staffing What are the human capital needs for this project?
6. Schedule and timeline: Include significant interim markers for the
project's completion date.
7. Findings and recommendations: Break down into subsets of
technology, marketing. organization, and financials.
4. Types of Feasibility:
1. Technical: A technical feasibility study involves evaluating the
engineering aspect of the project which includes the fields of civil and
structural engineering.
2. Managerial: A managerial feasibility study involves evaluating the
organizational structure and management capability of the project.
3. Economic: An economic feasibility study involves evaluating the
economic benefit and loss that may result from the project. This is
crucial to proposed non-profit development plans.
4. Financial: A financial feasibility study involves evaluating the
capability of the organization to come up with the funds needed to
complete the project.
5. Cultural and Social: Cultural and social feasibility studies involve
evaluating the compatibility of cultural and social practices, beliefs and
status affected by the proposed project.
6. Safety: A safety feasibility study involves evaluating whether the
project can be executed and operated safely with nominal harmful
influence on the environment.
7. Political: A political feasibility study involves evaluating the status of
the political climate that may affect the viability of the project.
8. Environmental: Environmental feasibility studies involve evaluating
the capability of the project to secure licenses, approvals and permits in
a timely and cost effective way.
9. Market: A market feasibility study involves evaluating the project's
impact on the market and its competitors. This also includes the
profitability analysis of the project.
To conclude, the goal of feasibility/assessment studies are to analyze and
outline methods of attaining business success. It is a crucial part of the
development project and should be utilized by investors before
implementing proposed plans.
5. Key points of a feasibility study
A feasibility study in project management usually assesses the following
areas:
1. Technical capability: Does the organization have the technical
capabilities and resources to undertake the project?
2. Budget: Does the organization have the financial resources to
undertake the project, and is the cost/benefit analysis of the project
sufficient to warrant moving forward with the project?
3. Legality: What are the legal requirements of the project, and can the
business meet them?
4. Risk: What is the risk associated with undertaking this project? Is the
risk worthwhile to the company based on perceived benefits?
5. Operational feasibility: Does the project, in its proposed scope, meet
the organization' needs by solving problems and/or taking advantage of
identified opportunities?
6. Time: Can the project be completed in a reasonable timeline that is
advantageous to the company?
6. Steps of feasibility study:
Anyone who conducts a feasibility study must follow several steps.
These actions include:
1. Preliminary analysis: Before moving forward with the time-
intensive process of a feasibility study, many organizations will
conduct a preliminary analysis, which is like a pre- screening of
the project. The preliminary analysis aims to uncover
insurmountable obstacles that would render a feasibility study
useless. If no major roadblocks are uncovered during this pre-
screen, the more intensive feasibility study will be conducted.
2. 2. Define the scope: It is important to outline the scope of the
project so that you can determine the scope of the feasibility study.
The project's scope will include the number and composition of
both internal stakeholders and external clients or customers. Don't
forget to examine the potential impact of the project on all areas of
the organization.
3. 3. Market research: No project is undertaken in a vacuum. Those
conducting the feasibility study will delve into the existing
competitive landscape and determine whether there is a viable
place for the project within that market.
4. 4. Financial assessment: The feasibility study will examine the
economic costs related to the project, including equipment or other
resources, man-hours, the proposed benefits of the project, the
break-even schedule for the project, the financial risks associated
with the proposal, and very important the potential financial impact
of the project's failure.
5. 5. Roadblocks and alternative solutions: Should any potential
problems surface during the study, it will look at alternative
solutions for the project to go ahead successfully.
6. 6. Reassessment of results: A holistic look at the feasibility study
with fresh eyes. particularly if any significant amount of time has
passed since it was first undertaken, is essential.
7. 7. Go/no-go decision: The final aspect of a feasibility study is the
recommended course of action in other words, whether the project
should proceed or not.