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Feasibility Study

Economic Feasibility-Economic feasibility is the most

important study that determines the cost and benefits of the
proposed system and compares with the budget. The cost of the
project should not outweigh the budget.
Technical Feasibility-During this study, the analyst
identifies the existing computer systems(hardware and software)
of the concerned department and determines whether these
technical resources are sufficient for the proposed system or not.
Behavioral Feasibility-When it is found that the project is
both economically and technically feasible, the next step is to
determine, whether it is operationally feasible or not. During
operational feasibility study, it is determined, whether the system
will operate in the way that the user wants.
Assessing Project Feasibility
Six Categories
Legal and contractual
Assessing Economic Feasibility
Cost Benefit Analysis
Determine Benefits
Tangible Benefits
Can be measured easily
Cost reduction and avoidance
Error reduction
Increased flexibility
Increased speed of activity
Increased management planning and control
Assessing Economic Feasibility
Intangible Benefits
Cannot be measured easily
Increased employee morale
Competitive necessity
More timely information
Promotion of organizational learning and understanding
Determine Costs (user end)
Tangible Costs
Can easily be measured in rupees
Example: Hardware

Dept. of Computer Applications

GJIMT, Mohali.
Assessing Economic Feasibility
Determine Costs
Intangible Costs
Cannot be easily measured in rupees
Loss of customer goodwill
Loss of employee morale

Dept. of Computer Applications

GJIMT, Mohali.
One-Time Costs (user end)
Associated with project startup, initiation
and development
System Development
New hardware and software purchases
User training
Site preparation
Data or system conversion
Assessing Economic Feasibility
Recurring Costs (user end)
Is an outflow of money to another person or group to pay
for an item or service
Application software maintenance
Incremental data storage expense
New software and hardware releases
Consumable supplies
Time value of money (TVM)
The process of comparing present cash outlays to
future expected returns
Assessing Other Project
Feasibility Concerns
Operational Feasibility
Assessment of how a proposed system solves
business problems or takes advantage of
Technical Feasibility
Assessment of the development organizations
ability to construct a proposed system
Assessing Other Project
Feasibility Concerns
Schedule Feasibility
Assessment of timeframe and project
completion dates with respect to organization
constraints for affecting change
Legal and Contractual Feasibility
Assessment of legal and contractual protocols
of new system
Assessing Other Project
Feasibility Concerns
Political Feasibility
Assessment of view of key stakeholders in
organization toward proposed system. In it
creation of self made original system is
considered so as to avoid future problems.
Steps in Feasibility Study
Form a Project Team & Appoint a Project Leader
Prepare System Flowcharts
Enumerate Potential Candidate system
Describe & Identify Characteristics of Candidate
Evaluate performance & Cost Effectiveness of CS
Weight System Performance & Cost Data
Select the Best CS
Prepare & Report final Project
Feasibility Report
Cover letter(A cover letter or covering letter is a letter of
introduction attached to, or accompanying another document )
Table of Contents
Detailed Findings
Economic Justification
Recommendations & Conclusions
Appendixes(reference section)