Lecture: Prof.

Mugisha

Lecture: Prof. Mugisha

PROJECT MANAGEMENT
MBA 711
Feas ibility Study In Project Management
introduction
A feasibility study is a vital step in evaluating if a proposed project should move forward to full implementation. As
defined by PMI, a feasibility study is "an evaluation and analysis of the potential of a proposed project to support the
process of decision making
A feasibility study investigates if a project is practically feasible and worthwhile undertaking. It assesses the strengths and
weaknesses, opportunities and threats associated with a proposed project.
Unders tanding A Feas ibility Study
Project management is the process of planning, organizing, and managing resources to bring about the successful
completion of specific project goals and objectives. A feasibility study is a preliminary exploration of a proposed project
or undertaking to determine its merits and viability. A feasibility study aims to provide an independent assessment that
examines all aspects of a proposed project, including technical, economic, financial, legal, and environmental
considerations.
This information then helps decision-makers determine whether or not to proceed with the project.
The feasibility study results can also be used to create a realistic project plan and budget. Without a feasibility study, it
cannot be easy to know whether or not a proposed project is worth pursuing
Aspects feasibility study
Feasibility study consider critical aspects this aspects include

Technical feasibility - Assesses if the required technologies, equipment, systems, skills and capabilities are available to
implement the project. It examines compatibility issues, support availability and specifications.

Technical Feasibility analyzes whether a proposed project can be successfully completed from a technological
standpoint. It evaluates if the required technology exists, can be developed, or obtained to deliver the project
objectives.
Economic feasibility - Involves cost-benefit analysis to evaluate if the investment into the project will result in financial
gains over the long term. All costs and expected revenues are projected.

Economic feasibility analyzes whether a proposed project is economically viable and worth undertaking from a financial
standpoint. It evaluates if the expected costs can be justified by the anticipated benefits.
Cont… .
Market feasibility refers to researching and analyzing the market environment relevant to a particular project

Market feasibility is a detailed analysis and assessment of the potential market for a proposed project .

the goals of market feasibility is to objectively assess the feasibility and profitability of a project concept before major
investment are made in development and lunch

Operational feasibility - Analyzes if the project aligns with current organizational processes, resources and operations. It
determines the operational changes needed.

Operational feasibility helps to identify operational barriers, weaknesses, risks,

Reduces Uncertainty

A feasibility study is conducted early in the project lifecycle to gather objective data and insights to evaluate if the
project goals are realistic and attainable within defined constraints. This provides tangible evidence to reduce
uncertainty around the viability of the project
Importance of Feas ibility Studies
Enables Informed Go/No-Go Decis ions

The feasibility study is an essential input to the final go/no-go decision gate. It provides substantiated findings for
stakeholders to make evidence-based determinations on whether to continue investing in a project or not

Identifies Potential Is s ues

The feasibility study is intended to take an impartial look at both the positive and negative aspects of a proposed
project. This enables identification of any aspects that are high risk or not feasible so they can be addressed early before
significant investments have been made
Importance of Feas ibility Studies
Optimizes Us e of Res ources

Feasibility analyses ensure organizational resources like financial capital, labor, technology, etc. are allocated to projects
that are truly viable rather than wasted on inadequately planned initiatives.

Saves Time and Money

Conducting a study early on can prevent significant investments in detailed planning of projects that will ultimately be
abandoned. This saves time and money that would have gone to wasted efforts

Aligns Project and Organizational Goals

The study confirms that proposed projects are in line with strategic organizational goals and
priorities before further development
Common tools in feas ibility study
Data Gathering Tools

Compiling robust data is crucial for credible feasibility analysis. Typical data collection tools include: Interviews -
Discussions with stakeholders and subject matter experts provide qualitative insights

Questionnaires - S urveys gather input from a large sample in a structured way

Focus Groups - Facilitated discussions with end users offer detailed qualitative feedback

Market Research - Assessing potential market demand is critical for product feasibility

Prototyping - Developing prototypes enables technical testing and refinement

Literature Review - Researching documentation gives context from precedent cases.

Powerful analytic approaches provide the rigor needed to evaluate feasibility: Cost-Benefit Analysis - Financial
modeling of costs versus benefits helps determine economic feasibility

SWOT Analysis - Evaluating strengths, weaknesses, opportunities and threats helps identify areas of focus

Risk Analysis - Quantifying risks through ratings and likelihoods highlights concerns

Requirements Analysis - Analyzing and validating requirements tests technical feasibility

Benchmarking - Comparing to competitors or industry standards provides context

Financial Projections - Developing cash flow forecasts helps test financing options
Software Tools
Specialized software streamlines and strengthens feasibility study processes:

Project Management Software - Tools like Microsoft Project help develop project plans

Financial Analysis Software - Applications like NPV Excel models facilitate in-depth financial analysis

Requirements Management Software Platforms like Visio aid in documenting specifications.

Data Analytics Software - Tools like Tableau enable advanced data modeling

Market Research Software - Systems like SurveyMonkey provide optimized market research
Examples of a Feas ibility Study
A local university was concerned about the state of the science building, which was built in the 1970s. School officials
sought to determine the costs and benefits of expanding and upgrading the building, given the scientific and
technological advances over the past 20 years. A feasibility study was therefore conducted.

School officials looked at several options and weighed the costs and benefits of updating and expanding the science
building. There were concerns expressed by school officials about the project's cost and public reaction. The proposed
new science building will be larger than the current one. The community board rejected similar proposals in the past.
The feasibility study will address these concerns and any possible legal or zoning issues.
Cont…
The feasibility study examined the technology requirements of the proposed concept(new science building), the
potential benefits for students, and its long-term viability. Modernizing the science facility will increase the scientific
research potential and ameliorate its modules. It also would allure new students.

Financial projections provided information about the scope & cost of this project and also provided information on
raising funds. This covers issuing an investor's bonds and tapping into its endowment. Projections also help determine
how the new science program attracts more fresh students to enroll in offered programs, increasing tuition and fees
revenue.
The feasibility study proved that the proposed concept was feasible, which allowed for the expansion and
modernization of the science building. The feasibility study would not have allowed school administrators to know if the
expansion plans were feasible without it.
Key purposes served by feasibility studies
To Assess Viability

The most fundamental purpose of a feasibility study is to analyze whether a proposed project is viable and has merit for
further investment.

It assesses the strengths and weaknesses across technical, economic, legal, scheduling and operational dimensions to
determine if the project is practical and implementable.

To Highlight Risks

As part of assessing viability, an effective feasibility study identifies potential risks associated with the project and gauges
their severity It highlights vulnerable aspects and recommends risk mitigation strategies. This enables risks to be
addressed early before escalating.
Key purposes served by feasibility studies
To Assess Viability

The most fundamental purpose of a feasibility study is to analyze whether a proposed project is viable and has merit for further
investment (Barker) It assesses the strengths and weaknesses across technical, economic, legal, scheduling and operational dimensions to
determine if the project is practical and implementable.

To Highlight Risks

As part of assessing viability, an effective feasibility study identifies potential risks associated with the project and gauges their severity It
highlights vulnerable aspects and recommends risk mitigation strategies. This enables risks to be addressed early before escalating.
Key purposes served by feasibility studies
To Evaluate Alternatives

the feasibility study evaluates different approaches or solutions to achieving the project's end goal through techniques
like cost-benefit analysis. The pros, cons, costs and benefits of alternatives are compared to select the optimal path
forward.
To Align to Strategy

The study examines how well the proposed project aligns with the overarching organizational strategy It ensures the
project objectives and outcomes will contribute towards strategic goals before significant investments are made.
Key purpos es served by feas ibility studies
To Influence Go/No-Go Decis ions

A core purpose of the feasibility study is to provide substantiated data that informs the final go/no-go decision on
whether to proceed with the project or kill it The evidence-based recommendations influence stakeholders.

To Optimize Res ource Use

the study aims to ensure organizational resources like funds, labor, technology assets, etc. are allocated towards
projects with solid viability rather than wasted on unsound concepts.
Key steps in developing feasibility study.
Define the Problem/Opportunity

Clearly state the business issue, problem or opportunity the project aims to address, providing relevant background and
context This sets the foundation for the study.

Determine Analysis Approach

Decide how the analysis will be conducted, including data collection methods, tools for assessment, key assumptions
and constraints Outline the schedule, budget and resource requirements.

Gather Data

Utilize interviews, surveys, documentation reviews, prototypes and market research to collect comprehensive technical,
financial, legal and operational data Seek diverse inputs to obtain objective information.
Cont….
Analyze Viability
Apply techniques like SWOT analysis, requirements analysis, benchmarking and financial modeling to assess the feasibility
of the proposed project Evaluate strengths, weaknesses, risks, alignment to strategy, costs versus benefits.
Develop Alternatives
Identify and analyze alternative solutions, approaches or design options Compare the pros, cons, costs,
and benefits of each alternative. Determine the optimal recommendation.
Document Findings
Summarize findings from the data analysis and outline evidence-based recommendations in the feasibility study
report Highlight key information needed for decision-making.
Review and Approve
Obtain stakeholder reviews of the feasibility study to build consensus on the recommendations before finalizing deliverable
Update Plans
Use feasibility study findings to update project plans, budget, schedule, resources, risks and designs as applicable
In summary, thoughtful project planning, extensive data gathering, rigorous analysis, developing alternatives,
comprehensive documentation and stakeholder reviews enable creation of a robust feasibility study that sets projects up
for success.
key difficulties and limitations associated with
feasibility studies.
Incomplete or Inaccurate Data

Obtaining reliable and comprehensive data is crucial but can be difficult (Morrison, 2020). Incomplete data leads to false
assumptions while inaccurate data results in flawed analysis. Insufficient time or access constraints also limit data
collection.
Unclear Scope
Without a well-defined scope and objectives, the analysis can become unfocused Creeping scope expansion leads to
excessive work effort without clear direction. Defining the precise scope is critical.
key difficulties and limitations associated with
feasibility studies.
Optimism Bias

There may be inherent optimism bias when project teams conduct self-assessments, skewing results in a more positive
direction Third party facilitated assessments counteract this bias.

Short Timeframes

Often compressed schedules do not allow proper time for detailed data gathering and analysis This leads to cursory
assessments lacking sufficient rigor. Realistic timelines are essential.
key difficulties and limitations as s ociated with
feas ibility studies
Analytical Complexity

Specialized technical, financial or legal analysis require expertise project teams may lack (Verified Feasibility, 2012).
Complex analytical tasks like risk modeling and financial forecasting may exceed internal capabilities.

Cos t and Res ource Requirements

Feasibility studies can be expensive, especially if using external consultants with specialized skills Allocating sufficient
budget and resources is necessary.

Ignoring Findings

If results show a project is high risk or unviable, organizations may ignore the findings and proceed regardless, negating
the value of the assessment
Conclusion
While not without challenges, feasibility studies lessen risks and inform project decisions when executed diligently.
Organizations can mitigate the difficulties through careful scoping, allowing adequate time, leveraging specialists,
applying objectivity, allocating sufficient resources, and using findings appropriately. This helps maximize the value of
the feasibility assessment to determine project viability.
 THANK YOU

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