Feasibility Study

 

—  Definition of Feasibility Studies: A feasibility study looks at the viability of an idea with an emphasis on identifying potential problems and attempts to answer one main question: Will the idea work and should you proceed with it?

—  Before you begin writing your business plan you need to identify how, where, and to whom you intend to sell a service or product. You also need to assess your competition and figure out how much money you need to start your business and keep it running until it is established.

—  Feasibility studies address things like where and how the business will operate. They provide in-depth details about the business to determine if and how it can succeed, and serve as a valuable tool for developing a winning business plan.

—  A feasibility study decides whether or not the proposed system is worthwhile.

—

  A short focused study that checks

◦      If the system contributes to organisational objectives;

◦      If the system can be engineered using current technology and within budget;

◦      If the system can be integrated with other systems that are used.

 

Need for feasibility Study

—  Advantages of making Feasibility study:

—  There are many advantages of making feasibility study some of which are summarized below:

—
This study being made as the initial step of software development life cycle has all the analysis part in it which helps in analyzing the system requirements completely.

—  Helps in identifying the risk factors involved in developing and deploying the system

—  The feasibility study helps in planning for risk analysis
Feasibility study helps in making cost/benefit analysis which helps the organization and system to run efficiently.

Feasibility study helps in making plans for training developers for implementing the system.

—  So a feasibility study is a report which could be used by the senior or top persons in the organization. This is because based on the report the organization decides about cost estimation, funding and other important decisions which is very essential for an organization to run profitably and for the system to run stable.

 

—  Why Are Feasibility Studies so Important?

—  The information you gather and present in your feasibility study will help you:

—  List in detail all the things you need to make the business work;

—  Identify logistical and other business-related problems and solutions;

—  Develop marketing strategies to convince a bank or investor that your business is worth considering as an investment; and

—  Serve as a solid foundation for developing your business plan.

 

Method

—  The Components of a Feasibility Study

—  Description of the Business: The product or services to be offered and how they will be delivered.

—  Market Feasibility: Includes a description of the industry, current market, anticipated future market potential, competition, sales projections, potential buyers, etc.

—  Technical Feasibility: Details how you will deliver a product or service (i.e., materials, labor, transportation, where your business will be located, technology needed, etc.).

—  Financial Feasibility: Projects how much start-up capital is needed, sources of capital, returns on investment, etc.

—  Organizational Feasibility: Defines the legal and corporate structure of the business (may also include professional background information about the founders and what skills they can contribute to the business).

—  Conclusions: Discusses how the business can succeed. Be honest in your assessment because investors won’t just look at your conclusions they will also look at the data and will question your conclusions if they are unrealistic.

 

Feasibility Analysis

 —  Feasibility Checkpoints During Analysis

◦      Systems Analysis -Survey Phase

–  “Do the problems (or opportunities) warrant the cost of a detailed study of the current system?”

◦      Systems Analysis -  Study/Definition Phase

–  Better estimates of development costs and the benefits to be obtained from a new system.

–  Requirements often prove to be more extensive that originally stated.

–  If feasibility is in question, scope, schedule, and costs must be rejustified.

◦      Systems Analysis – Selection Phase

–  A major feasibility analysis evaluating options for the target systems design.

–  Typical options that are evaluated include

–  Do nothing! Leave the current system alone.

–  Reengineer the (manual) business processes, not the computer-based processes.

–  Enhance existing computer processes.

–  Purchase a packaged application.

 

 

Four Tests for Feasibility

—  Operational feasibility is a measure of how well a specific solution will work in the organization. It is also a measure of how people feel about the system/project.

–  Does management support the system?

–  How do the end-users feel about their role in the new system?

–  What end-users or managers may resist or not use the system?  Can this problem be overcome? If so, how?

–  Usability analysis

–  Ease of use, Ease of learning, User satisfaction

—  Technical feasibility is a measure of the practicality of a specific technical solution and the availability of technical resources and expertise.

–  Is the proposed technology or solution practical? Is the technology mature?

–  Do we currently possess the necessary technology?

–  Do we possess the necessary technical expertise, and is the schedule reasonable?

—  Schedule feasibility is a measure of how reasonable the project timetable is.

—  Economic feasibility is a measure of the cost-effectiveness of a project or solution. This is often called a cost-benefit analysis.

 

 

 

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