System Analysis & Design:

Feasibility Study

Feasibility Study
A feasibility study is an analysis and evaluation of a

proposed project. It helps to determine the viability of a project.

It is a stage in a project management where the ability to

successful completion of a project is analysed while taking into account legal, economic, technological, scheduling and other factors.
Feasibility study allows project managers to investigate

the possible risk factor of a project before investing too much resources on it. It helps to make decision in terms of project initiation.
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Feasibility Study
Objectives To find out the following question about a project:

Is it possible? (Can it be done?) Is it justified? (Is it worth doing?)

To suggest possible alternative solutions. To provide management with enough information to

know:

Whether the project can be done Whether the final product will benefit its intended users What the alternatives are (so that a selection can be made in subsequent phases) Whether there is a preferred alternative
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Feasibility Study
Things to be considered at this stage: The present organizational system

Stakeholders, users, policies, functions, objectives,... inconsistencies, inadequacies in functionality, performance etc. Which problem(s) need to be solved? What is the goal of the new system? including nonfunctional requirements on the system

Problems with the present system

Other requirements for the new system:

Constraints

Feasibility Study
Possible alternatives

Sticking with the current system is always an alternative Different business processes for solving the problems Different levels/types of computerization for the solutions

Advantages and disadvantages of the alternatives

Feasibility should conclude: Feasibility of the project ( go ahead, do not go ahead or think again) Preferred alternative.
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Feasibility Study
Why? It helps the business to determine the profitability of the venture. It helps the business to identify the flaws, challenges, strengths, weaknesses, opportunities, threats and other unforeseen circumstances that might affect the success and sustainability of the venture. It helps the business to estimate the financial, human and technological resources that will be needed to ensure the successful launching of the venture. It helps the business in establishing the budget plan, working capital and cash flow projections of the business.
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Feasibility Study
Types Technical

Is the project possible with current technology? What technical risk is there? Availability of the technology (locally, compatibility, obtainable) Is the project possible, given resource constraints? (development and operational costs) Are the benefits worth the costs?

Economic

Feasibility Study
Schedule

Is the project possible in scheduled time? What are the consequences of delay? Any constraints on the schedule?

Operational

Can the developed system be used? Human and social issues

Staff resistance Organizational conflicts and policies Social acceptability legal aspects and government regulations
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Technical Feasibility
What kinds of technology will we need? Is the proposed technology or solution practical? Do we currently possess the necessary technology? Do we possess the necessary technical expertise Is relevant technology reliable enough? Is the required technology available in house? If the technology is available:

Does it have the capacity to handle the solution? Can it be acquired?

If the technology is not available:

Schedule Feasibility
How long will it take to get the technical expertise? We may have the technology, but do we have the skills required to apply that technology.

Do we need to hire new people or re-train existing staff Whether hiring or training, it may impact the schedule.

Assess the schedule risk: Given our technical expertise, are the project deadlines reasonable? If there are specific deadlines, are they mandatory or desirable?
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Schedule Feasibility
What are the real constraints on project deadlines? If the project overruns, what are the consequences?

Deliver a properly functioning information system two months late Deliver an error-prone, useless information system on time Financial penalty

Missed schedules are bad, but inadequate systems

are worse!

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Operational Feasibility
Evaluation not only on whether a system can work

but also on whether it will work. How do end-users and managers react?
the identified problem

alternative solutions

Any solution might meet with resistance: Which users or managers may resist (or not use) the system and how to overcome it ? Any Social/legal issues which might affect

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Economic Feasibility
Also known as Cost-benefit analysis
This study should answer the following: Is the project justified (i.e. will benefits outweigh costs)? What is the minimal cost to attain a certain system? How soon will the benefits accrue? Which alternative offers the best return on investment?

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Economic Feasibility
Identify costs and benefits Tangible and intangible, one-time cost (capital cost) and recurring (Operational costs) Assign values to costs and benefits
Determine Cash Flow Project the costs and benefits over time, e.g. 3-5 years Calculate Net Present Value for all future costs/benefits
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Economic Feasibility
Cost/benefit analysis
Calculate Return on Investment (ROI):

Allows comparison of lifetime profitability of alternative solutions. ROI =Total Profit/Total Cost= (Lifetime benefits - Lifetime costs)/Lifetime costs Calculate Break-Even point: how long will it take (in years) to pay back the accrued costs
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Feasibility Matrix
Candidate 1 Name Candidate 2 Name Candidate 3 Name Description Operational Feasibility Technical Feasibility Schedule Feasibility Economic Feasibility Ranking
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