Feasibility study
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If a project is seen to be feasible from the results of the study, the next logical step is to proceed with it. The research and information uncovered in the feasibility study will support the detailed planning and reduce the research time.
A well-researched and well-written feasibility study is critical when making "Go/No Go" decisions regarding entry into new businesses.
A Feasibility Study is a process which defines exactly what a project is and what strategic issues need to be considered to assess its feasibility, or likelihood of succeeding. Feasibility studies are useful both when starting a new business, and identifying a new opportunity for an existing business. Ideally, the feasibility study process involves making rational decisions about a number of enduring characteristics of a project, including:
- What exactly is the project? Is it possible? Is it practicable? Can it be done?
- Economic feasibility, technical feasibility, schedule feasibility, and operational feasibility - are the benefits greater than the costs?
- Technical feasibility - do we 'have the technology'? If not, can we get it?
- Schedule feasibility - will the system be ready on time?
- Customer profile: Estimation of customers/revenues.
- Determination of competitive advantage.
- Operational feasibility - do we have the resources to build the system? Will the system be acceptable? Will people use it?
- Current market segments: projected growth in each market segment and a review of what is currently on the market.
- Vision/mission statement.
- Definition of proposed operations/management structure and management method.
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[edit] Five common factors (TELOS)
[edit] Technology and system feasibility
This involves questions such as whether the technology needed for the system exists, how difficult it will be to build, and whether the firm has enough experience using that technology. The assessment is based on an outline design of system requirements in terms of Input, Processes, Output, Fields, Programs, and Procedures. This can be quantified in terms of volumes of data, trends, frequency of updating, etc. in order to estimate whether the new system will perform adequately or not.
[edit] Economic feasibility
Economic analysis is the most frequently used method for evaluating the effectiveness of a candidate system. More commonly known as cost/benefit analysis, the procedure is to determine the benefits and savings that are expected from a candidate system and compare them with costs. If benefits outweigh costs, then the decision is made to design and implement the system.
[edit] Legal feasibility
Determines whether the proposed system conflicts with legal requirements, e.g. a Data Processing system must comply with the local Data Protection Acts.
[edit] Operational feasibility
Is a measure of how well a proposed system solves the problems, and takes advantages of the opportunities identified during scope definition and how it satisfies the requirements identified in the requirements analysis phase of system development.[1]
[edit] Schedule feasibility
A project will fail if it takes too long to be completed before it is useful. Typically this means estimating how long the system will take to develop, and if it can be completed in a given time period using some methods like payback period. Schedule feasibility is a measure of how reasonable the project timetable is. Given our technical expertise, are the project deadlines reasonable? Some projects are initiated with specific deadlines. You need to determine whether the deadlines are mandatory or desirable.
[edit] Other feasibility factors
[edit] Market and real estate feasibility
Market Feasibility Study typically involves testing geographic locations for a real estate development project, and usually involves parcels of real estate land. Developers often conduct market studies to determine the best location within a jurisdiction, and to test alternative land uses for a given parcels. Jurisdictions often require developers to complete feasibility studies before they will approve a permit application for retail, commercial, industrial, manufacturing, housing, office or mixed-use project. Market Feasibility takes into account the importance of the business in the selected area.
[edit] Resource feasibility
This involves questions such as how much time is available to build the new system, when it can be built, whether it interferes with normal business operations, type and amount of resources required, dependencies, etc. Contingency and mitigation plans should also be stated here.
[edit] Cultural feasibility
In this stage, the project's alternatives are evaluated for their impact on the local and general culture. For example, environmental factors need to be considered and these factors are to be well known. Further an enterprise's own culture can clash with the results of the project.
[edit] See also
[edit] References
- ^ Bentley, L & Whitten, J (2007). System Analysis & Design for the Global Enterprise. 7th ed. (p. 417).
[edit] External links
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