Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of the existing business or proposed

venture, opportunities and threats as presented by the environment, the resources required to carry through, and ultimately the prospects forsuccess. In its simplest term, the two criteria to judge feasibility are cost required and value to be attained. As such, a well-designed feasibility study should provide a historical background of the business or project, description of the product or service, accounting statements, details of the operations and management, marketing research and policies, financial data, legal requirements and tax obligations.[1] Generally, feasibility studies precede technical development and project implementation.

Five common factors

TELOS provides five common factors. Technology and system feasibility 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. Technological feasibility is carried out to determine whether the company has the capability, in terms of software, hardware, personnel and expertise, to handle the completion of the project. When writing a feasibility report the following should be taken to consideration:

A brief description of the business to assess more possible factor/s which could affect the study The part of the business being examined The human and economic factor The possible solutions to the problems

At this level, the concern is whether the proposal is both technically and legally feasible (assuming moderate cost). Economic feasibility Economic analysis is the most frequently used method for evaluating the effectiveness of a new 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. An entrepreneur must accurately weigh the cost versus benefits before taking an action. Cost-based study: It is important to identify cost and benefit factors, which can be categorized as follows: 1. Development costs; and 2. Operating costs. This is an analysis of the costs to be incurred in the system and the benefits derivable out of the system.

Time-based study: This is an analysis of the time required to achieve a return on investments. The future value of a project is also a factor. 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. Operational feasibility Operational feasibility is a measure of how well a proposed system solves the problems, and takes advantage of the opportunities identified during scope definition and how it satisfies the requirements identified in the requirements analysis phase of system development. 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.

Other feasibility factors 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 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. 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, 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. Financial feasibility

In case of a new project,financial viability can be judged on the following parameters:

Total estimated cost of the project Financing of the project in terms of its capital structure, debt equity ratio and promoter's share of total cost Existing investment by the promoter in any other business Projected cash flow and profitability

In its simplest form, a Feasibility Study represents a definition of a problem or opportunity to be studied, an analysis of the current mode of operation, a definition of requirements, an evaluation of alternatives, and an agreed upon course of action. As such, the activities for preparing a Feasibility Study are generic in nature and can be applied to any type of project, be it for systems and software development, making an acquisition, or any other project. There are basically six parts to any effective Feasibility Study: 1. The PROJECT SCOPE which is used to define the business problem and/or opportunity to be addressed. The old adage, "The problem well stated is half solved," is very apropos. The Scope should be definitive and to the point; rambling narrative serves no purpose and can actually confuse project participants. It is also necessary to define the parts of the business affected either directly or indirectly, including project participants and end-user areas affected by the project. The project sponsor should be identified, particularly if he/she is footing the bill. I have seen too many projects in the corporate world started without a well defined Project Scope. Consequently, projects have wandered in and out of their boundaries causing them to produce either far too much or far too little than what is truly needed. 2. The CURRENT ANALYSIS is used to define and understand the current method of implementation, such as a system, a product, etc. From this analysis, it is not uncommon to discover there is actually nothing wrong with the current system or product other than some misunderstandings regarding it or perhaps it needs some simple modifications as opposed to a major overhaul. Also, the strengths and weaknesses of the current approach are identified (pros and cons). In addition, there may very well be elements of the current system or product that may be used in its successor thus saving time and money later on. Without such analysis, this may never be discovered. Analysts are cautioned to avoid the temptation to stop and correct any problems encountered in the current system at this time. Simply document your findings instead,

otherwise you will spend more time unnecessarily in this stage (aka "Analysis Paralysis"). 3. REQUIREMENTS - how requirements are defined depends on the object of the project's attention. For example, how requirements are specified for a product are substantially different than requirements for an edifice, a bridge, or an information system. Each exhibits totally different properties and, as such, are defined differently. How you define requirements for software is also substantially different than how you define them for systems. (See, "Understanding the Specifications Puzzle") 4. The APPROACH represents the recommended solution or course of action to satisfy the requirements. Here, various alternatives are considered along with an explanation as to why the preferred solution was selected. In terms of design related projects, it is here where whole rough designs (e.g., "renderings") are developed in order to determine viability. It is also at this point where the use of existing structures and commercial alternatives are considered (e.g., "build versus buy" decisions). The overriding considerations though are:

Does the recommended approach satisfy the requirements? Is it also a practical and viable solution? (Will it "Play in Poughkeepsie?") A thorough analysis here is needed in order to perform the next step... 5. EVALUATION - examines the cost effectiveness of the Approach selected. This begins with an analysis of the estimated total cost of the project. In addition to the recommended solution, other alternatives are estimated in order to offer an economic comparison. For development projects, an estimate of labor and out-of-pocket expenses is assembled along with a project schedule showing the project path and start-and-end dates. After the total cost of the project has been calculated, a cost and evaluation summary is prepared which includes such things as a cost/benefit analysis, return on investment, etc. 6. REVIEW - all of the preceding elements are then assembled into a Feasibility Study and a formal review is conducted with all parties involved. The review serves two purposes: to substantiate the thoroughness and accuracy of the Feasibility Study, and to make a project decision; either approve it, reject it, or ask that it be revised before making a final decision. If approved, it is very important that all parties sign the document which expresses their acceptance and commitment to it; it may be a seemingly small gesture, but signatures carry a lot of weight later on as the project progresses. If the Feasibility Study is rejected, the reasons for its rejection should be explained and attached to the document.

CONCLUSION It should be remembered that a Feasibility Study is more of a way of thinking as opposed to a bureaucratic process. For example, what I have just described is essentially the same process we all follow when purchasing an automobile or a home. As the scope of the project grows, it becomes more important to document the Feasibility Study particularly if large amounts of money are involved and/or the criticality of delivery. Not only should the Feasibility Study contain sufficient detail to carry on to the next succeeding phase in the project, but it should also be used for comparative analysis when preparing the final Project Audit which analyzes what was delivered versus what was proposed in the Feasibility Study. Feasibility Studies represent a commonsense approach to planning. Frankly, it is just plain good business to conduct them. However, I have read where some people in the I.T. field, such as the "Agile" methodology proponents, consider Feasibility Studies to be a colossal waste of time. If this is true, I've got a good used car I want to sell them.

Feasibility Study template :

Research the business problem or opportunity Document the business requirements for a solution Identify all of the alternative solutions available Review each solution to determine its feasibility List any risks and issues with each solution Choose a preferred solution for implementation Document the results in a feasibility report This Feasibility Study template also includes: Dozens of practical, real-life examples A diagram describing feasibility assessments Procedures which help you to assess feasibility Tables to help you write up the feasibility outcome A best practice process to achieve the best feasibility results The Feasibility Study template is different, as it includes all of the information needed to perform a feasibility study quickly and easily. It provides you with guidance, to ensure that all of the required elements of a feasibility study are adequately covered. It will also save you time and effort, as the template is pre-filled making it quick and easy to complete.

What is a Feasibility Study? A Project Feasibility Study is an exercise that involves documenting each of the potential solutions to a particular business problem or opportunity. Feasibility Studies can be undertaken by any type of business, project or team and they are a critical part of the Project Life Cycle.

When to use a Feasibility Study? The purpose of a Feasibility Study is to identify the likelihood of one or more solutions meeting the stated business requirements. In other words, if you are unsure whether your solution will deliver the outcome you want, then a Project Feasibility Study will help gain that clarity. During the Feasibility Study, a variety of 'assessment' methods are undertaken. The outcome of the Feasibility Study is a confirmed solution for implementation.

The main purpose of the feasibility study is to answer one main question: "Should we proceed with this project idea?