Course Co-ordinator : Dolly Das

SPM - Feasibility Study

School of Computer Science Engineering and Technology

Bennett University

Dolly Das February 13, 2024 1 / 13

Outline

1 Introduction to Feasibility Study

2 Business Case

3 Key Elements of Business Case

4 Convert a business case into a project

5 Feasibility Study

6 Types of Feasibility Study

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Introduction to Feasibility Study

An assessment of the practicality of a proposed project plan or method.

Analyze technical, economic, legal, operational and time feasibility factors.
E.g. Technology flexibility and incorporation, availability of team and resources, Return on
Investment (ROI)
Performed after the business case has been completed

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Business Case

Sells your project

Explains how the benefits of a project over weigh its costs and why it should be executed.
Prepared during the project initiation phase and includes project’s objectives, costs and
benefits to convince stakeholders of its value.
Convincing the client, customer or stakeholder about the soundness of the project
Need - collects the financial appraisal, proposal, strategy and marketing plan in one
document and offers a full look at how the project will benefit the organization.
Approved by project stakeholders - aligns the project team and stakeholders
Base for the project charter and project plan
Costs related to the project are worthwhile and there will be a strong return on investment
How to write a business case?
Identify the Business Problem
Identify the Alternative Solutions - quantify its benefits, forecasts the cost for each
solution, perform feasibility and discern the risks and issues with each if the
solution(s)
Recommend a Preferred Solution - cost and benefit, score , complexity
Describe the Implementation Approach - documentation

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Key Elements of Business Case
Executive Summary
Project Definition
Vision, Goals and Objectives
Project Scope
Background information - Product service, definition and organization
Success Criteria and Stakeholder Requirements
Project Plan, Budget and Schedule
Project Governance
Communication Plans
Progress Reports
Financial Appraisal
Market Assessment and strategy
Competitor Analysis
SWOT Analysis- identify organization’s strengths, weaknesses, opportunities and threats.
The strengths and weaknesses are internal, while the opportunities and threats are
external.
Marketing strategy
Risk Assessment

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Convert a business case into a project

Create Detailed Plans on Robust Gantt

Organize tasks
Link dependencies to avoid bottlenecks
Set milestones to track progress
Generate variance reports to monitor alignment of actual progress with planned
progress

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Feasibility Study

Foundation of project plan that determines it viability

Assessment of the practicality of a proposed project plan or method
Analyzing technical, economic, legal, operational and time feasibility factors
A project feasibility study should be done during the project management life cycle after
the business case has been completed.
Holistic view of the potential benefits, disadvantages, barriers and constraints
Determine whether the project can be not only viable but also beneficial from a technical,
financial, legal and market standpoint
Report on Feasibility Study
Executive summary
Description of product/service
Technology considerations
Product/service marketplace
Marketing strategy
Organization/staffing
Schedule
Financial projections
Findings and recommendations

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Types of Feasibility Study

Pre-Feasibility Study
Undertaken prior to the feasibility study
Sound project proposal
Prioritize different project ideas or approaches to determine whether the project has
fundamental technical, financial, operational or any other evident flaws.

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Types of Feasibility Study

Technical Feasibility Study

Determines if the organization has the technical resources and expertise to meet the
project requirements
Assesses the organizations capability to execute a project, such as the production
capacity, facility needs, raw materials, supply chain and others such as regulatory
compliance requirements or standards for the products or services.

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Types of Feasibility Study

Economic Feasibility Study

Also called financial feasibility study
Determine whether a project is financially feasible
Determine the seed capital, working capital and contingency capital.
Estimate and identify the type of resources needed for the execution of
the project such as raw materials, equipment and labor.
Cost breakdown structure to identify project costs
Identify potential sources of funding such as loans or investments from
investors or venture capitalists.
Estimate the expected revenue, profit margin and ROI of your project
by conducting a cost-benefit analysis, or using business forecasting
techniques such as linear programming to estimate different future
outcomes under different levels of production, demand and sales.
Estimate your project’s break-even point.
Conduct a financial benchmark analysis with industrial averages and
specific competitors in relevant industry.
Use pro forma cash flow statements, financial statements, balance
sheets and other financial projection documents.

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Types of Feasibility Study

Legal Feasibility Study

Meet legal requirements including laws and regulations that apply to all activities
and deliverables in the project scope
Think about the most favorable legal structure for your organization and its
investors.
Liability for business owners, such as limited liability companies (LLCs) or
corporations, which reduce the liability for each business partner.

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Types of Feasibility Study

Market Feasibility Study

Determines whether the project has the potential to succeed in the market - analyze
and perform industry review, SWOT (Strength, Weakness, Opportunities and
Threats).
Market Research : Identify barriers and constraints that affects the availability of
the project, and use market research techniques to identify target market, evaluate
the project’s competitiveness etc.

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7 Steps to Do a Feasibility Study

Conduct a Preliminary Analysis- focus on unserved need where the demand is greater than
the supply and whether the product or service has a distinct advantage
Prepare a Projected Income Statement- Estimate the income from the project to be and
then what project funding is needed to achieve that goal
Conduct a Market Survey or Perform Market Research of the revenues and return on
investment
Plan Business Organization and Operations: Thorough analysis of start-up costs, fixed
investments and operating costs such as equipment, merchandising methods, real estate,
personnel, supply availability, overhead, etc.
Estimate assets and liabilities such as sources, items, costs and financing
Review and analyze data
Reexamine income statement and compare them with liabilities and expenses.
Make a Go/No-Go Decision: Identify if the commitment is worth the time, effort and
money and whether it aligns with the organization’s strategic goals and long-term
aspirations.

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