The Feasibility Study The objective of a feasibility study is to find out if an project can be done and if so, how The objective of a feasibility study is to find out if an project can be done and if so, how A feasibility study should tell management: A feasibility study should tell management: Whether the project can be done; Whether the project can be done; What are alternative solutions? What are alternative solutions? What are the criteria for choosing among them? What are the criteria for choosing among them? Is there a preferred alternative? Is there a preferred alternative? After a feasibility study, management makes a go/no-go decision. After a feasibility study, management makes a go/no-go decision. A feasibility study is a management-oriented activity

Dimensions of Feasibility Operational Feasibility Technical Feasibility Economic Feasibility Schedule Feasibility

Operational Feasibility Operational -- how will the solution work? Operational -- how will the solution work? Urgency of the problem and the acceptability of any solution: Urgency of the problem and the acceptability of any solution: Human and social issues… Human and social issues… Manager resistance? Manager resistance? Organizational conflicts and policies? Organizational conflicts and policies? Social acceptability? Social acceptability? Legal aspects and government regulations? Legal aspects and government regulations?

Technical feasibility Is the project possible with current technology? Is the project possible with current technology? How much technical risk is there? How much technical risk is there? Does the technology exist at all? Does the technology exist at all? Is it available locally? Is it available locally? Can it be obtained? Can it be obtained? Will it be compatible with other systems? Will it be compatible with other systems?

Economic Feasibility Economic -- return on investment Economic -- return on investment Is the project possible under given resource constraints? Is the project possible under given resource constraints? What benefits will result from the system? What benefits will result from the system? Both tangible and intangible benefits Both tangible and intangible benefits Quantify them! Quantify them! What are the development and operational costs? What are the development and operational costs? Are the benefits worth the costs? Are the benefits worth the costs?

Schedule Feasibility Schedule -- can the project be completed on time? Schedule -- can the project be completed on time? Is it possible to build a solution in time to be useful Is it possible to build a solution in time to be useful Constraints may be hard or soft

Economic Feasibility The bottom line for many projects! Economic feasibility amounts to judging whether possible benefits of the project are worthwhile. As soon as a specific solution has been identified, the analyst can weigh the costs and benefits of each alternative. This is called cost-benefit analysis.

Cost/Benefit Analysis The purpose of a cost/benefit analysis is to answer questions such as: The purpose of a cost/benefit analysis is to answer questions such as: Is the project justified (benefits outweigh costs)? Is the project justified (benefits outweigh costs)? Can the project be done, within cost constraints? Can the project be done, within cost constraints? What is the minimal cost to do a certain project? What is the minimal cost to do a certain project? Difficulties -- discovering and assessing benefits and costs; they can both be intangible, hidden and/or hard to estimate, it's also hard to rank multi-criteria alternatives Difficulties -- discovering and assessing benefits and costs; they can both be intangible, hidden and/or hard to estimate, it's also hard to rank multi-criteria alternatives

Types of Benefits Benefits may be classified into one of the following categories: Monetary -- when Rupee values can be calculated; Tangible (Quantified) -- when benefits can be quantified, but monetary values can't be calculated; Intangible -- when neither of the above applies. How to identify benefits? By organizational level (operational, lower/middle/higher management) or by department (production, purchasing, sales)

Types of Costs Project-related costs Project-related costs Development and purchasing costs Development and purchasing costs Installation, training and conversion costs Installation, training and conversion costs Operational costs (on-going) Operational costs (on-going) Maintenance: hardware, software, facilities Maintenance: hardware, software, facilities Personnel: operation, maintenance Personnel: operation, maintenance For a small business that wants to introduce a PC-based information system, these cost categories amount to: For a small business that wants to introduce a PC-based information system, these cost categories amount to: Project costs: purchase hardware, software, furniture; customize software, train, install, file conversion Project costs: purchase hardware, software, furniture; customize software, train, install, file conversion On-going costs: operating the system (data entry, backups, helping users, vendors etc.), maintenance (software) and user support, hardware and software maintenance, supplies On-going costs: operating the system (data entry, backups, helping users, vendors etc.), maintenance (software) and user support, hardware and software maintenance, supplies

Risk Analysis One of the criteria for comparing alternatives often has to do with an evaluation of the risks for each alternative. One of the criteria for comparing alternatives often has to do with an evaluation of the risks for each alternative. For example, one alternative may have a higher risk of rejection by users of the system. For example, one alternative may have a higher risk of rejection by users of the system. Or, an alternative may have better backing from top management, which means that it has lower risk of failure because top management changed its mind. Or, an alternative may have better backing from top management, which means that it has lower risk of failure because top management changed its mind.

Risk Factors: A Sample System requirements: System requirements: Poorly understood requirements at scheduling time; Poorly understood requirements at scheduling time; Customer changes requirements; Customer changes requirements; Is staff insisting on unnecessary features? Is staff insisting on unnecessary features? Tools and technology: Tools and technology: Unsuitable target deployment environment; Unsuitable target deployment environment; Unsuitable development tools; Unsuitable development tools; New tools; New tools; No technology standards No technology standards

More Risk Factors People: People: Inadequate participation by users in development process; Inadequate participation by users in development process; Poor project management; Poor project management; Poorly trained developers; Poorly trained developers; Environment: Environment: Weak upper management commitment; Weak upper management commitment; Changing environment; Changing environment; Changing technological environment; Changing technological environment; Government action Government action

Information Acquisition There are many techniques for acquiring the information used in a feasibility study. There are many techniques for acquiring the information used in a feasibility study. Study available documents and data; Study available documents and data; Sampling; Sampling; Interviews; Interviews; Questionnaires; Questionnaires; Observation Observation Surveys Surveys You need to know which method to choose, and how to actually use it.

Feasibility Study Report Contents Purpose and scope of the study -- objectives, who commissioned it, who did it, sources of information, process used for the study, how long did it take Description of current situation -- organizational setting, current system(s) Related factors and constraints Problems and requirements Objectives of the new system

Feasibility Study Contents Possible alternatives -- including, possibly, the present situation Possible alternatives -- including, possibly, the present situation Criteria for comparison -- definition of the criteria Criteria for comparison -- definition of the criteria Analysis of alternatives -- includes description of each alternative, evaluation with respect to criteria, including cost/benefit analysis and special implications. Analysis of alternatives -- includes description of each alternative, evaluation with respect to criteria, including cost/benefit analysis and special implications. Recommendations -- what is recommended, implications, what to do next; sometimes it makes sense to recommend an interim solution and a permanent solution appendices that include supporting material Recommendations -- what is recommended, implications, what to do next; sometimes it makes sense to recommend an interim solution and a permanent solution appendices that include supporting material

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