UNIT - 3
Feasibility study
A feasibility study is part of the initial design stage of any project/plan. It is
conducted in order to objectively uncover the strengths and weaknesses of a
proposed project or an existing business. It can help to identify and assess the
opportunities and threats present in the natural environment, the resources required
for the project, and the prospects for success. It is conducted in order to find answers
to the following questions:
• Does the company possess the required resources and technology?
• Will the company receive a sufficiently high return on its investment?
Importance of Feasibility Study
The importance of a feasibility study is based on organizational desire to “get it
right” before committing resources, time, or budget. A feasibility study might
uncover new ideas that could completely change a project’s scope.
Below are some key benefits of conducting a feasibility study:
• Improves project teams’ focus
• Identifies new opportunities
• Provides valuable information for a “go/no-go” decision
• Narrows the business alternatives
• Identifies a valid reason to undertake the project
• Enhances the success rate by evaluating multiple parameters
• Aids decision-making on the project
• Identifies reasons not to proceed
Types of Feasibility Study
1. 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 the evaluation of the hardware, software, and
other technical requirements of the proposed system.
2. 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.
3. 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.
4. Operational Feasibility
This assessment involves undertaking a study to analyze and determine whether—
and how well—the organization’s need 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.
5. Scheduling Feasibility
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. When these areas have all been
examined, the feasibility analysis helps identify any constraints the proposed project
may face, including:
Cost estimation
Cost estimation in project management is the process of forecasting the financial and
other resources needed to complete a project within a defined scope. Cost estimation
accounts for each element required for the project—from materials to labor—and
calculates a total amount that determines a project’s budget. An initial cost estimate
can determine whether an organization green lights a project, and if the project
moves forward, the estimate can be a factor in defining the project’s scope. If the
cost estimation comes in too high, an organization may decide to pare down the
project to fit what they can afford.
There are two key types of costs addressed by the cost estimation process:
Elements of cost estimation in project management
Direct costs: Costs associated with a single area, such as a department or the project
itself. Examples of direct costs include fixed labor, materials, and equipment.
Indirect costs: Costs incurred by the organization at large, such as utilities and
quality control.
Within these two categories, here are some typical elements that cost estimation will
take into account:
• Labor: The cost of team members working on the project, both in terms of wages
and time
Feasibility study
A feasibility study is part of the initial design stage of any project/plan. It is
conducted in order to objectively uncover the strengths and weaknesses of a
proposed project or an existing business. It can help to identify and assess the
opportunities and threats present in the natural environment, the resources required
for the project, and the prospects for success. It is conducted in order to find answers
to the following questions:
• Does the company possess the required resources and technology?
• Will the company receive a sufficiently high return on its investment?
Importance of Feasibility Study
The importance of a feasibility study is based on organizational desire to “get it
right” before committing resources, time, or budget. A feasibility study might
uncover new ideas that could completely change a project’s scope.
Below are some key benefits of conducting a feasibility study:
• Improves project teams’ focus
• Identifies new opportunities
• Provides valuable information for a “go/no-go” decision
• Narrows the business alternatives
• Identifies a valid reason to undertake the project
• Enhances the success rate by evaluating multiple parameters
• Aids decision-making on the project
• Identifies reasons not to proceed
Types of Feasibility Study
1. 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 the evaluation of the hardware, software, and
other technical requirements of the proposed system.
2. 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.
3. 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.
4. Operational Feasibility
This assessment involves undertaking a study to analyze and determine whether—
and how well—the organization’s need 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.
5. Scheduling Feasibility
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. When these areas have all been
examined, the feasibility analysis helps identify any constraints the proposed project
may face, including:
Cost estimation
Cost estimation in project management is the process of forecasting the financial and
other resources needed to complete a project within a defined scope. Cost estimation
accounts for each element required for the project—from materials to labor—and
calculates a total amount that determines a project’s budget. An initial cost estimate
can determine whether an organization green lights a project, and if the project
moves forward, the estimate can be a factor in defining the project’s scope. If the
cost estimation comes in too high, an organization may decide to pare down the
project to fit what they can afford.
There are two key types of costs addressed by the cost estimation process:
Elements of cost estimation in project management
Direct costs: Costs associated with a single area, such as a department or the project
itself. Examples of direct costs include fixed labor, materials, and equipment.
Indirect costs: Costs incurred by the organization at large, such as utilities and
quality control.
Within these two categories, here are some typical elements that cost estimation will
take into account:
• Labor: The cost of team members working on the project, both in terms of wages
and time
