Feasibility Study

Feasibility Study

A feasibility study determines whether a proposed system is worth developing. It evaluates the project from multiple perspectives to provide management with the information needed to make a go/no-go decision before committing significant resources.

Types of Feasibility

              Feasibility Study
              /       |       \
             /        |        \
        Technical  Economic  Operational
           |          |          |
      Can we      Should we    Will users
      build it?   invest?      use it?

Technical Feasibility

Evaluates whether the organization has the technology, expertise, and infrastructure to build and operate the system.

Key questions:

• Does the required technology exist?
• Does the team have the necessary skills?
• Can the system integrate with existing infrastructure?
• Are there hardware, software, or network constraints?
• Is the technology proven and stable?

Economic Feasibility

Evaluates whether the projected benefits of the system outweigh its costs. This involves a cost-benefit analysis.

Costs include:

• Development costs (personnel, equipment, software licenses)
• Training costs
• Maintenance and support costs
• Downtime during transition

Benefits include:

• Cost savings (reduced labor, fewer errors)
• Revenue generation (new services, faster processing)
• Intangible benefits (improved customer satisfaction, competitive advantage)

Common financial metrics:

Return on Investment (ROI) = (Benefits - Costs) / Costs x 100%
Net Present Value (NPV)    = Sum of discounted cash flows
Payback Period             = Time to recoup initial investment

Operational Feasibility

Evaluates whether the system will be used effectively once deployed. A technically and economically feasible system can still fail if users refuse to adopt it.

Key questions:

• Will users support and use the system?
• Does the system fit the organization's culture?
• Will the system improve operations for users?
• Are there resistance factors that need to be addressed?

Schedule Feasibility

Evaluates whether the project can be completed within the required time frame. Missing deadlines can render a system irrelevant or cause it to exceed budget.

Legal Feasibility

Evaluates whether the system complies with legal and regulatory requirements such as data protection laws, accessibility standards, and industry regulations.

Feasibility Report Structure

1. Executive Summary
2. Project Background
3. Feasibility Analysis
   3.1 Technical Feasibility
   3.2 Economic Feasibility
   3.3 Operational Feasibility
   3.4 Schedule Feasibility
   3.5 Legal Feasibility
4. Risk Assessment
5. Recommendation
6. Conclusion

Summary

A thorough feasibility study saves time and money by identifying problems early. It provides decision-makers with objective evidence about whether to proceed, modify, or abandon a proposed system.