Before giving the go-ahead to launch a project, the first thing on a project manager’s agenda is the feasibility study. While project managers are not required to conduct the feasibility study themselves, they use it as a guideline to drive the project and to get an end-to-end understanding of project parameters, business goals, and risk factors. Let us explore more about the feasibility study in project management.
What is a Feasibility Study?
A feasibility study is an analysis done to determine the viability of a project from an economical, legal, and technical perspective. Simply put, it gives us an insight into whether a project is doable or worth the investment.
A feasibility study, that’s well-designed should offer insights on the description of the project, resource allocation, accounting statements, financial data, legal requirements, and tax obligations. It helps to determine whether the project is both possible and profitable for the company to undertake. Hence, this study is mandatorily done before technical development and project execution.
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Benefits of A Feasibility Study
Below are the benefits of doing a feasibility study in project management:
- Get a clear-cut idea of whether the project is likely to be successful, before allocating budget, manpower, and time.
- Enhances the project teams’ efficiency and focus.
- Helps detect and capitalize on new opportunities.
- Substantiates with evidence of why and how a project should be executed.
- Streamlines the business alternatives.
- Diagnoses errors and aids in troubleshooting them.
- Prevents threats from occurring and helps in risk mitigation.
- Gives valuable insights to both the team and stakeholders associated with the project.
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Steps to conduct a feasibility study.
The following stages are involved while conducting any feasibility study, in general:
- A preliminary analysis: This is like a pre-screening of the project. It helps discover the viability of the project as well as identify any roadblocks if any.
- Scope definition: This step includes outlining the project’s scope as well as its potential impact on the organization.
- Market research: This is an essential factor, as no project is begun without adequate market research. A thorough analysis of the existing market and competition is done to manage the project accordingly.
- Financial assessment: In this stage, all the costs related to the project, including equipment, man-hours, the financial risks, and the benefits associated with the project are estimated and scrutinized.
- Alternative solutions: Whenever any hiccups arise, the team should be well-prepared to come up with a solution. This is an integral yet dynamic part of a feasibility study.
- Go/no-go decision: The final stage of a feasibility study is the course of action, in other words, whether the project is worth proceeding with or not.
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Types of Feasibility Studies
There are five types of feasibility studies based on the area that is examined:
1. Technical Feasibility
This study takes stock of the technical resources available to undertake a project from an organization’s perspective. It includes ensuring that the technical resources are adequate, and the hardware and software requirements are met. Technical feasibility will also include if proven technologies and methodologies exist to support the proposed development.
2. Economic Feasibility
This assessment performs a cost/ benefits analysis of the project before the financial resources are allocated. This type of study gives a clear-cut idea of project credibility (viability) as well as the economic benefits to the organization from the project.
3. Legal Feasibility
In this type of feasibility study, the legal requirements of the proposed project are analyzed. Several parameters, ranging from zonal laws to data protection acts are checked, and compliance mandates are mapped out.
4. Operational Feasibility
This study will help analyze and determine whether the organization’s goals can be satisfied by completing the project.
5. Scheduling Feasibility
This is the most important assessment for project success. It estimates the time necessary to complete the project after considering the organization’ s capabilities and determines whether that amount of time is available.
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Conclusion
The feasibility study is an integral aspect of project management. Well-planned projects are less likely to fail. A detailed, well-defined feasibility study will only increase the likelihood of project success. To explore more concepts in project management like these, sign up for any one of our immersive series of project management professional course workshops here.
