In its simplest form, a Feasibility Study represents a definition of a problem or opportunity to be studied, an analysis of the current mode of operation, a definition of requirements, an evaluation of alternatives, and an agreed upon course of action.
As such, the activities for preparing a Feasibility Study can be applied to any type of project, be it for systems and software development making an acquisition, or any other project.
There are typically six parts to any effective Feasibility Study:
1. PROJECT SCOPE
Which is used to define the business problem and/or opportunity to be addressed. The Scope should be definitive and to the point. It is also necessary to define the parts of the business affected either directly or indirectly, including project participants and end-user areas affected by the project.
2. CURRENT ANALYSIS
Used to define and understand the current method of implementation, such as a system, a product, etc. From this analysis, it. The strengths and weaknesses of the current approach are identified (pros and cons). In addition, there may very well be elements of the current system or product that may be used in its successor thus saving time and money later on. Without such analysis, this may never be discovered.
How requirements are defined depends on the object of the project's attention. For example, how requirements are specified for a product are substantially different than requirements for an edifice, a bridge, or an information system. Each exhibits totally different properties and, as such, are defined differently.
Represents the recommended solution to satisfy the requirements. Here, various alternatives are considered along with an explanation as to why the preferred solution was selected. It is also at this point where we consider:
- Does the recommended approach satisfy the requirements?
- What are the commercial alternatives?
- Is it also a practical and viable solution?
Examines the cost effectiveness of the approach selected. This begins with an analysis of the estimated total cost of the project. In addition to the recommended solution, other alternatives are estimated in order to offer an economic comparison.
After the total cost of the project has been calculated, a cost and evaluation summary is prepared which includes such things as a market size, cost/benefit analysis, return on investment, etc.
All of the preceding elements are then assembled into a Feasibility Study. The review serves two purposes: to substantiate the thoroughness and accuracy of the Feasibility Study, and to make a project decision; either approve it, reject it, or ask that it be revised before making a final decision.
Frequently asked questions
How do you build a complete feasibility study in 1 week?
- We build feasibility studies every single day. In doing so, we have identified the key elements needed to substantiate business decisions and focus on those elements.
- On average, this is approx. 50 pages and a financial model which can be updated as required.