1.4 Project Feasibility

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Project Feasibility
What is Project Feasibility and Why is it Important?

Feasibility studies aim to find the strengths and weaknesses of a proposed project, opportunities,
constraints and the resources required to carry through, and ultimately the prospects for success. A
feasibility analysis is used to determine the viability of an idea, such as ensuring a project is legally
and technically feasible as well as economically justifiable. In simple words, a feasibility analysis
evaluates the project’s potential for success, indicating whether a project is worth the investment;
whether a project is profitable; whether a project can be accomplished or/and whether a project is well-
designed. The evaluation should include available technologies; required skills; deployment; on-going
management and support; integration into back end systems; scalability and future proofing.
Google image
Benefits of Conducting a Feasibility Study

▪ Identifies valid reasons to undertake/not to proceed with the project
▪ Identifies strengths, weaknesses, opportunities and constraints of the proposed project
▪ Provides valuable information on decision-making on the project
▪ Narrows the business alternatives
▪ Improves project teams’ focus
▪ Evaluates the potential for success by assessing multiple parameters
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Five Areas of Project Feasibility
There can be various types of feasibility studies: technical, economic, legal, operational and scheduling
(TELOS).
1. Technical Feasibility
2. Economic Feasibility
3. Legal Feasibility
4. Operational Feasibility
5. Scheduling Feasibility
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 evaluation of the hardware,
software, and other technical requirements of the proposed system. Technical feasibility assesses the
ability of the organization to construct system-risks for managing risks and specifies the technical
requirements, including supporting software tools.
The technical requirements will naturally be designed with the aim of defining a feasible project.
However, the development of specific technical feasibility criteria can be useful to organize the
information properly, increase overall transparency, and promote a stronger base for the
recommendations provided at the end of the Appraisal Phase. Assessing technical feasibility can also
highlight specific risks of the project that should be considered for the green light decision.
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.
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.
Operational Feasibility
This assessment involves undertaking a study to analyze and determine whether—and how well—the
organization needs 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.
Scheduling Feasibility
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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. This analysis estimates how much time the project will take to complete/sets out the time
schedule for the project realization.
Project Feasibility – The Need for Risk Management

Risk is present throughout the lifecycle of the project and all projects are subject to uncertainty and
therefore to risk. In this sense, risk is inevitable. According to PMI “risk is an uncertain event or condition
that has a positive or negative effect on a project’s objectives. Risk refers to future conditions or
circumstances that exist outside the control of the project team that will have an adverse impact on the
project if they occur. Risk can affect the people, processes, technology, and resources involved in a
project. Risks usually are things that could potentially cause problems which should not be ignored. Risk
management is about maximizing your chances of project success by identifying risks early on and
planning how to manage them. Project managers use risk management to minimize any potential
problems that may negatively impact a project’s timetable. The project manager’s role is to work out
how to make these risks disappear or at least have less of an impact if they do happen. Each project risk
will need a management and an action plan. By analysing and managing risk up front, project managers
are able to anticipate situations and problems as well as build contingency plans; conduct project
management activities in proportion to the amount of risk; and manage the expectations of the
stakeholders and the project team. The earlier you identify potential risks and plan to manage them, the
greater the chance of project success. The higher the risk, the more likely that one of those problems
will happen.
Not all risks are negative and not all risk is created equally. As mentioned, risk can be either positive or
negative, though most people assume risks are inherently the latter. Where negative risk implies
something unwanted that has the potential to irreparably damage a project, positive risks are
opportunities that can affect the project in beneficial ways. There are many examples of positive risks in
projects: you could complete the project early; you could acquire more customers than you accounted
for; you could imagine how a delay in shipping might open up a potential window for better marketing
opportunities, etc. It’s important to note, though, that these definitions are not etched in stone. Positive
risk can quickly turn to negative risk and vice versa, so you must be sure to plan for all eventualities with
your team. However, positive and negative risks will likely be managed differently.
(Bonnie, 2018)
(Ray, 2017)
(Mar, 2016)
(Wrike, n.d)
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The Need for Risk Management
Organisation with small Organisation with critical

Organisation with critical projects
task force team projects
High Large mature team
Limited maturity Small mature team
VERY HIGH NEED
HIGH NEED HIGH NEED
Organisation with small

teams Organisation with Organisation with
Low (specialised) Small mature teams Large mature teams
Limited maturity MEDIUM NEED HIGH NEED
LOW NEED
Medium projects
Small projects Large projects
Low complexity
Low complexity High complexity
Some cross-functional
Single function Multiple cross-functional working
working
Risk vs. Issue vs. Assumption vs. Dependencies (RAID)

Risks are not the same as issues. A risk is a potential future problem that has not yet occurred and is
outside the control of the project team. An issue on the other hand is a current problem that must be
dealt with and an assumption can also be thought of as a low level risk and is outside the control of the
project team. A dependency exists when an output from one piece of work or project is needed as
mandatory input for another project or piece of work. RAID stands for Risks, Assumptions, Issues, and
Dependencies.
Google image (EPM, n.d)
Risk Management Process

Risk management is a process that seeks to reduce the uncertainties of an action taken through
planning, organizing and controlling both human and financial capital. Project management risks can be
break down into five elements:
1. Risk event: What might happen to affect your project?
2. Risk timeframe: When is it likely to happen?
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3. Probability: What are the chances of it happening?
4. Impact: What is the expected outcome?
5. Factors: What events might forewarn or trigger the risk event?
(Bonnie, 2018)
The following are the steps that should be taken to implement this process.
Step 1: Identify Potential Risks

You and your team should uncover, recognize and describe risks that might affect your project or its
outcomes. You should develop an understanding of the nature of the risk and its potential to affect to
project goals and objectives. Then Sit down and create a list of every possible risk and opportunity you
can think of. Define the main risks and their characteristics, whether they are threats or opportunities.
There are number techniques you can use to find project risks. During this step you should start to
prepare your Project Risk Register.
Techniques to Identify Project Risks

▪ Gather the project team together
▪ List glitches that have occurred in other, similar projects
▪ Brainstorm other surprises that might occur by asking the following questions:
• What can go wrong on this project?
• Time: could extend past the scheduled finish date
• Cost: could blow out
• Quality: might need to be downgraded
• Resources: might not be available as scheduled
• What will happen to the project if it goes wrong?
• Credibility of the project manager and project team members
• Timeline extensions
• Additional funding approvals
• Resource sourcing
• Changes to the specification
• What can the project stakeholders actually do about it?
• Take preventative action (Hartley 2003)
▪ Categorise the risks to assist in understanding both the risk and the possible management strategies
• Technical, Quality or Performance Risks
• Reliance on unproven or complex technology or functionality
• Unrealistic performance goals
• Changes to technology used (during the project)
• Clarity/stability of system requirements
• Project Management Risks
• Weak or non-existent project management methodology
• Poor allocation of time and resources
• Insufficient detail in the project plan or poor application of project management
disciplines
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• Location of project team members
• Team skills and competencies
• Project manager skills and experience
• Use of external; staff/consultant
• Clarity of roles and responsibilities
• Accuracy of estimates
• Project duration
• Staffing levels
• Organisational Risks
• Irregularities between time, cost and scope objectives
• Low commitment to the project
• User experience and buy-in
• Poor prioritisation
• Inadequate funding (or delays)
• Resource conflicts with other projects
• External Risks
• Changes in legal or regulatory requirements
• Industrial relations issues
• Change in client/owner priorities
• Country risk
• Weather
Step 2: Risk Analysis and Ranking

This step involves risk evaluation and ranking by determining the risk magnitude which is a combination
of likelihood and consequence. Once risks are identified you should determine the likelihood and
consequence of each risk. You are going to make decisions about whether the risk is acceptable or
whether it is serious enough to warrant treatment. You should analyse the exposure to risk to prioritize
those that will be the subject of analysis; an additional action or contingency; perform the numerical
analysis of the effect of the risks identified in the objectives of the project. This information and the risk
rankings are also added to your Project Risk Register.
Likelihood (qualitative assessment) is the probability (quantitative assessment) of an event occurring,

whereas the consequence is the impact or outcome of an event. Both these components characterize
the magnitude of the risk.
A) Determine probability: What are the odds a certain risk will occur? It’s a lot more likely that a key
team member will be out for a week with the flu than develop total amnesia. Rate each risk with
high, medium, or low probability.
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Risk Ranking Matrix – Impact on the Project
Probability of
Occurrence
B) Determine Impact: What would happen if each risk occurred? Would your final delivery date get
pushed back? Would you go over budget? Identify which risks have the biggest effect on your
project's outcomes, and rate them as high impact. Rate the rest as medium or low impact risks.
c) Assign Ownership: There is something else you should do when listing the risks, such as assigning who
will be responsible for that risk. You should assign someone to oversee the risk.
Step 3: Risk Response Planning

This involves creating options and actions to increase opportunities and reduce threats to project or
business objectives. During this step you assess your highest ranked risks and set out a plan to treat or
modify these risks as well as enhancing the opportunities. You should create risk mitigation strategies,
preventive plans and contingency plans in this step. In addition, you should add the risk treatment
measure for the highest ranking or most serious risks to your project risk register.
Step 4: Implementation of the Risk Response Actions

If planned risk happens then you should execute decisions, risk response actions and mitigation plans.
Step 5: Monitor and Control
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This involves risks controlling during the project life cycle. This is the step where you take your project
risk register and use to monitor, track and review risks. Remember that should take place an on-going
communication throughout the process.
Track/Control
Identify
Monitor risk indicators and
Search and locate risks BEFORE they
mitigation actions /
ck Id materialize
Tra trol
Correct for deviations from
planned risk actions
en
n tif
Implem Co y
Communicate
ze
Implement
ent
aly
Execute decisions and Analyze
mitigation action plans Process risk data into decision-making
An
information
Plan
Communicate Plan
Information and feedback throughout all risk Translate risk information into decisions and
management functions and project organizations actions (mitigations)
(Kloosterman, n.d)
(Best Practices, n.d)
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Prepare to Manage the Risks
Once the risks have been identified and analysed, determine what action needs to be taken to minimise
the risk (i.e. reduce its likelihood/impact) or manage the risk if it is triggered. Strategies include:
1. Risk avoidance
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The best thing you can do with a risk is avoid the risk. If you can prevent it from happening, it definitely
won’t hurt your project. The easiest way to avoid this risk is to walk away from the cliff, but that may not
be an option on this project By planning around risks, alternatives may be found that eliminate the
potential risk altogether. Avoiding the risk may be via different technology, modified procedures or
active monitoring of ”triggers”.
2. Risk Mitigation
This means taking some sort of action that will cause it to do as little damage to your project as possible.
If you can’t avoid the risk, you can mitigate it. This means taking some sort of action that will cause it to
do as little damage to your project as possible. The risk is controlled such that its potential to impact
negatively on the project is minimised.
3. Risk Transference
The most common way to do this is to buy insurance. One effective way to deal with a risk is to pay
someone else to accept it for you. The most common way to do this is to buy insurance. The
responsibility for the risk is transferred to a third party (eg requiring a supplier to give a fixed price or
guarantee, perhaps with a penalty clause, or to take out insurance against a risk occurring).
4. Risk Acceptance
When you accept a risk, at least you’ve looked at the alternatives and you know what will happen if it
occurs. When you can’t avoid, mitigate, or transfer a risk, then you have to accept it. But even when you
accept a risk, at least you’ve looked at the alternatives and you know what will happen if it occurs. If you
can’t avoid the risk, and there’s nothing you can do to reduce its impact, then accepting it is your only
choice. Assuming that the risk does occur, contingency planning outlines the steps to be taken to
achieve the optimal positive result for the project (eg extra funding, alternative technology or
procedures or other recovery strategies).
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Risk Mitigation
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List of References
Mar, A. (2016). 130 Project Risks (List). [Online] Available from:

https://management.simplicable.com/management/new/130-project-risks (Accessed on 30/10/2019)
Ray, S. (2017). The Risk Management Process in Project Management [Online] Available from:
https://www.projectmanager.com/blog/risk-management-process-
steps#:~:targetText=Project%20risk%20management%20is%20the,track%20and%20meet%20its%20goal
.
Kloosterman, V. (n.d). What are the 5 Risk Management Steps in a Sound Risk Management Process?
[Online] Available from: https://continuingprofessionaldevelopment.org/risk-management-steps-in-risk-
management-process/ (Access on 30/10/2019)
https://www.girlsguidetopm.com/10-things-new-project-managers-should-know/
https://www.simplilearn.com/feasibility-study-
article#targetText=What%20Is%20the%20Feasibility%20Study,project%20may%20not%20be%20doable.
https://www.clickz.com/how-to-assess-the-feasibility-of-your-mobile-project/91689/
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Disclaimer

What is Project Feasibility and Why is it Important?

Benefits of Conducting a Feasibility Study

Project Feasibility – The Need for Risk Management

Organisation with small Organisation with critical

Organisation with small

Risk vs. Issue vs. Assumption vs. Dependencies (RAID)

Google image (EPM, n.d)

Risk Management Process

Step 1: Identify Potential Risks

Techniques to Identify Project Risks

Step 2: Risk Analysis and Ranking

Likelihood (qualitative assessment) is the probability (quantitative assessment) of an event occurring,

Step 3: Risk Response Planning

Step 4: Implementation of the Risk Response Actions

Step 5: Monitor and Control

Mar, A. (2016). 130 Project Risks (List). [Online] Available from:

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