Trade Project - Lesson 4 - Chapter Three

CHAPTER 3: FEASIBILITY STUDY

This chapter should have a minimum of 5 page and a maximum of 15 pages. It will assess the
technical, economic, operational and legal feasibility of the proposed system. It provides a
comprehensive assessment of the proposed system and helps to ensure that the system is feasible
to develop, implement, and use.
Feasibility studies are an essential part of any project development process. By conducting a
comprehensive feasibility study, organizations can reduce risk, improve decision-making,
increase efficiency and effectiveness, and improve stakeholder buy-in.
The results of a feasibility study are typically documented in a feasibility report. This report
should provide a clear and concise overview of the project, the feasibility assessment findings,
and a recommendation on whether or not to proceed with the project.
Benefits of conducting a feasibility stud
There are many benefits to conducting a feasibility study, including:
• Reduced risk: By identifying and assessing potential risks early on, feasibility studies
can help to reduce the overall risk of project failure.
• Improved decision-making: Feasibility studies provide decision-makers with the
information they need to make informed decisions about whether or not to proceed with a
project.
• Increased efficiency and effectiveness: By ensuring that projects are feasible before
they are started, feasibility studies can help to improve the efficiency and effectiveness of
the project development process.
• Improved stakeholder buy-in: By involving stakeholders in the feasibility study
process, organizations can increase their understanding of the project and its potential
benefits.
CHAPTER THREE SECTIONS
Consider the following as the chapter three sections Chapter
3: Feasibility Study
3.1 Technical feasibility
3.1.1 Hardware and software requirements
3.1.2 Technical expertise
3.1.3 Technical risks
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3.2 Economic feasibility

3.2.1 Development costs
3.2.2 Maintenance costs
3.2.3 Benefits
3.3 Schedule feasibility
3.3.1 Project complexity
3.3.2 Team size and experience
3.3.3 Resource availability
3.3.4 External factors
3.4 Organizational feasibility
3.4.1 Organizational Culture
3.4.2 Organizational resources
3.4.3 Organizational commitment
3.5 Operational feasibility
3.5.1 User acceptance
3.5.2 Organizational change
3.5.3 Operational risks
3.6 Legal feasibility
3.6.1 Data privacy laws
3.6.2 Intellectual property laws
3.6.3 Other applicable laws and regulations
3.7 Conclusion
3.1 Introduction
The introduction section contains the following:
• A brief overview of the chapter, including its purpose and scope.
• A definition of a feasibility study and an explanation of its importance.
• A discussion of the different types of feasibility studies and the factors that should be
considered when conducting a feasibility study.
• An overview of the structure of the chapter.
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Example
A feasibility study is a comprehensive evaluation of a proposed project or system to determine
whether it is possible and worth pursuing. It is an essential step in any project development
process, as it helps to identify and mitigate potential risks, assess the costs and benefits of the
project, and ensure that the project is aligned with the organization's overall goals and objectives.
Feasibility studies can be conducted for a variety of projects, including new product
development, IT system implementation, and business process improvement. The specific scope
of a feasibility study will vary depending on the nature of the project, but it typically includes an
assessment of the following factors:
• Technical feasibility: Does the project have the necessary technical resources and
capabilities to be successful? This question assesses whether the organization has the
necessary hardware, software, and personnel resources to develop and support the
system. It also considers whether the organization has the necessary technical expertise to
implement and maintain the system.
• Economic feasibility: Is the project financially viable? This question assesses whether
the organization can afford to develop and maintain the system. It considers the costs of
hardware, software, personnel, training, and maintenance. It also considers the potential
benefits of the system, such as increased productivity, reduced costs, and improved
customer service.
• Schedule feasibility: Can the project be completed within the desired timeframe? This
question assesses whether the project can be completed on time and within budget. It
considers the complexity of the system, the size and experience of the development team,
and the availability of resources.
• Legal and regulatory feasibility: Does the project comply with all applicable laws and
regulations? This question assesses whether the system complies with all applicable laws
and regulations, such as privacy laws, data security laws, and industry regulations.
• Organizational feasibility: Does the organization have the necessary resources and
support to implement and sustain the project? This question assesses whether the organization
has the necessary resources and support to implement and maintain the system. This includes
having the necessary budget, staff, training, and management support.
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• Operational feasibility: Does the project have the necessary technical resources and
capabilities to be successful? This question assesses whether the organization has the
necessary hardware, software, and personnel resources to develop and support the
system. It also considers whether the organization has the necessary technical expertise to
implement and maintain the system.
3.1 Technical feasibility
Technical feasibility is a measure of how well a proposed system can be implemented using
existing or available technology. It involves assessing the hardware, software, and other technical
resources required for the system, as well as the organization's technical expertise and ability to
manage the implementation and maintenance of the system.
3.1.1 Hardware and software requirements
This section assesses the technical feasibility by identifying the hardware and software
requirements for the proposed system. This includes identifying the type and capacity of the
hardware required, as well as the type and number of software licenses required.
Once the hardware and software requirements have been identified, it is important to assess
whether the organization has the necessary resources to meet these requirements. This includes
assessing the organization's budget, as well as the availability of qualified IT staff.
Example one
A company is considering developing a new e-commerce system. The first step in assessing
technical feasibility is to identify the hardware and software requirements for the system.
The company's IT department identifies the following hardware requirements:
• Webservers
• Database servers
• Load balancers
• Firewalls
The company's IT department also identifies the following software requirements:
• E-commerce platform
• Content management system
• Customer relationship management (CRM) system
• Payment processing system
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Once the hardware and software requirements have been identified, the company's IT department
assesses the organization's ability to meet these requirements.
Conclusion: The company has the necessary budget to purchase the required hardware and
software licenses. The company also has qualified IT staff with experience in the specific
technologies required for the proposed system.
Example two
A hospital is considering developing a new electronic health record (EHR) system. The first step
in assessing technical feasibility is to identify the hardware and software requirements for the
system. The hospital's IT department identifies the following hardware requirements:
• Servers
• Storage devices
• Network infrastructure
• End-user devices (e.g., workstations, tablets, mobile devices)
The hospital's IT department also identifies the following software requirements:
• EHR software
• Integration software
• Security software
Once the hardware and software requirements have been identified, the hospital's IT department
assesses the organization's ability to meet these requirements.
Conclusion: The hospital has the necessary budget to purchase the required hardware and
software licenses. The hospital also has qualified IT staff with experience in the specific
technologies required for the proposed system.
3.1.2 Technical expertise
This section assesses the organization's technical expertise. This includes assessing the
organization's knowledge and experience with the specific technologies required for the proposed
system. If the organization does not have the necessary technical expertise, it is important to
develop a plan to acquire this expertise. This may involve hiring new staff, training existing
staff, or outsourcing certain aspects of the system development process.
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Example one
The next step in assessing technical feasibility is to assess the organization's technical expertise.
Conclusion: The company's IT department has the necessary knowledge and experience with the
specific technologies required for the proposed system.
Example two
The next step in assessing technical feasibility is to assess the organization's technical expertise.
The hospital's IT department has the necessary knowledge and experience with the specific
technologies required for the proposed system.
3.1.3 Technical risks
This section assesses the technical risks associated with the proposed system. This includes
assessing the risks of technological obsolescence, technical complexity, and vendor lock-in.
Note: It is important to develop a plan to mitigate these risks. For example, the organization may
choose to implement a phased approach to system development, or it may choose to use
opensource technologies to reduce vendor lock-in.
Example one
Finally, the company's IT department assesses the technical risks associated with the proposed
system. The company identifies the following technical risks:
• Technological obsolescence: The e-commerce platform and other software components
may become obsolete over time.
• Technical complexity: The proposed system is complex and there is a risk of technical
problems during development and implementation.
• Vendor lock-in: The company may become locked into a specific vendor for the
ecommerce platform or other software components.
The company's IT department develops a plan to mitigate these risks. The company decides to
implement a phased approach to system development. This will allow the company to reduce the
risk of technical problems and to identify and mitigate any problems early on. The company also
decided to use open-source technologies for the e-commerce platform and other software
components. This will reduce the risk of vendor lock-in.
Conclusion: After carefully assessing technical feasibility, the company's IT department
concludes that the proposed e-commerce system is technically feasible. The company decides to
proceed with the development of the system .
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Example two
Finally, the hospital's IT department assesses the technical risks associated with the proposed
system. The hospital identifies the following technical risks:
• Technological obsolescence: The EHR software and other software components may
become obsolete over time.
• Technical complexity: The proposed system is complex and there is a risk of technical
problems during development and implementation.
• Data security: The EHR system will contain sensitive patient data, so it is important to
ensure that the system is secure.
The hospital's IT department develops a plan to mitigate these risks. The hospital decides to
implement a phased approach to system development. This will allow the hospital to reduce the
risk of technical problems and to identify and mitigate any problems early on. The hospital also
decides to use a cloud-based EHR system. This will reduce the hospital's investment in hardware
and software and will make it easier to keep the system up-to-date.
Conclusion: After carefully assessing technical feasibility, the hospital's IT department
concludes that the proposed EHR system is technically feasible. The hospital decides to proceed
with the development of the system.
3.2 Economic feasibility
Economic feasibility assesses whether a proposed project is financially viable. It considers the
costs and benefits of the project, as well as the risks involved.
3.2.1 Development costs
This section assesses the development costs, i.e., the costs associated with designing, developing,
and implementing the proposed system. These costs may include the cost of hardware, software,
personnel, and training.
Note: One can analyze these costs in a tabular format, i.e., using tables
3.2.2 Maintenance costs
This section assesses the maintenance costs, i.e., the costs associated with maintaining and
supporting the system after it has been implemented. These costs may include the cost of
hardware and software maintenance, personnel costs, and training costs.
Note: One can analyze these costs in a tabular format, i.e., using tables
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3.2.3 Benefits
This section assesses the benefits the proposed system, i.e., the tangible and intangible benefits
that the system will provide to the organization. Tangible benefits may include increased
revenue, reduced costs, or improved productivity. Intangible benefits may include improved
customer satisfaction, increased employee satisfaction, or improved risk management.
Examples of economic feasibility:
Example 1:
A company is considering developing a new e-commerce system. The development costs are
estimated to be Kshs 1 million. The maintenance costs are estimated to be Kshs 100,000 per year.
The benefits of the system are estimated to be Kshs 2 million per year.
Conclusion: The project is economically feasible because the benefits outweigh the costs.
Example 2:
A hospital is considering developing a new electronic health record (EHR) system. The
development costs are estimated to be Kshs10 million. The maintenance costs are estimated to be
Kshs 1 million per year. The benefits of the system are estimated to be Kshs 5 million per year.
Conclusion: The project is not economically feasible because the costs outweigh the benefits.
Example 3:
A company is considering developing a new e-commerce system. The following table shows its costs

Cost Benefit Value

Development costs Increased revenue Kshs 2 million
Maintenance costs Reduced costs Kshs 1 million
Total costs Total benefits Kshs 3 million
Conclusion: Based on this assessment, the project is economically feasible because the total
benefits outweigh the total costs.
Example 4:
Cost Benefit

Development costs Kshs 10 million

Maintenance costs Kshs 1 million

Total costs Kshs 11 million

Increased revenue Kshs 5 million

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Reduced costs

Total benefits Kshs 5 million

Based on this assessment, the project is not economically feasible because the total costs
outweigh the total benefits.
A more detailed economic feasibility assessment would consider the following factors in addition
to the development and maintenance costs and benefits:
• Cost of capital: The cost of capital is the rate of return that a company must earn on its
investments in order to satisfy its shareholders. It is important to consider the cost of
capital when assessing the economic feasibility of a project because it is a measure of the
opportunity cost of the investment.
• Time value of money: The time value of money is the concept that money is worth more
today than it will be in the future. This is because money can be invested and earn interest
over time. It is important to consider the time value of money when assessing the
economic feasibility of a project because it allows us to compare the value of future
benefits to the value of current costs.
• Risk of project failure: There is always a risk that a project will fail. It is important to
consider the risk of project failure when assessing the economic feasibility of a project
because it allows us to estimate the potential losses associated with the project.
3.3 Schedule feasibility
Schedule feasibility assesses whether the proposed project can be completed within the desired
timeframe. It considers the complexity of the project, the size and experience of the team, the
availability of resources, and any external factors that may impact the schedule.
3.3.1 Project complexity
This section assesses the project complexity, i.e., a measure of how difficult it is to complete the
project. Complex projects typically have more moving parts and are more susceptible to delays.
3.3.2 Team size and experience
This section assesses the team size and experience. The size and experience of the team is
another important factor to consider when assessing schedule feasibility. A larger and more
experienced team will be able to complete the project more quickly than a smaller and less
experienced team.
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3.3.3 Resource availability

This section assesses the availability of resources is also an important factor to consider. If the
project team does not have access to the necessary resources, it will be difficult to complete the
project on time. 3.3.4 External factors
This section assesses the external factors, such as government regulations or changes in market
conditions, can also impact the project schedule.
Examples of schedule feasibility:
Example 1:
A company is developing a new e-commerce system. The project is complex and will require a
large and experienced team. However, the company has the necessary resources and is not
subject to any external factors that could impact the schedule. Therefore, the project is schedule
feasible.
Example 2:
A hospital is developing a new electronic health record (EHR) system. The project is complex
and will require a large and experienced team. However, the hospital does not have the necessary
resources and is subject to government regulations that could impact the schedule. Therefore, the
project is not schedule feasible.
3.4 Organizational feasibility
This section assesses the organizational feasibility, i.e., whether an organization has the
necessary resources and support to implement and sustain the proposed project. This includes
considering the organization's culture, resources, and commitment to the project.
3.4.1 Organizational culture
This section assesses organizational culture, i.e., the set of shared values, beliefs, and norms that
guide an organization's behavior. It is important to consider organizational culture when
assessing feasibility because it can have a significant impact on the success of a project. For
example, if the organizational culture is resistant to change, it will be difficult to implement a
new system.
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3.4.2 Organizational resources

This section assesses organizational resources include the people, equipment, and funding that an
organization has available to it. It is important to consider organizational resources when
assessing feasibility because it is important to ensure that the organization has the resources
necessary to implement and support the proposed project.
3.4.3 Organizational commitment
This section assesses organizational commitment, i.e., the level of support that an organization
has for the proposed project. It is important to consider organizational commitment when
assessing feasibility because it is important to ensure that the organization is willing and able to
invest the necessary resources and time in the project.
Examples of organizational feasibility:
Example 1:
A company is considering developing a new e-commerce system. The company has a culture of
innovation and has the necessary resources to implement and support the new system. The
company is also committed to the success of the project. Therefore, the project is
organizationally feasible.
Example 2:
A hospital is considering developing a new electronic health record (EHR) system. The hospital
has a culture of resistance to change and does not have the necessary resources to implement and
support the new system. The hospital is also not committed to the success of the project.
Therefore, the project is not organizationally feasible.
3.5 Operational feasibility
Operational feasibility assesses whether the proposed project can be implemented and integrated
into the organization's existing operations. This includes considering the project's impact on the
organization's day-to-day operations, as well as the potential for disruptions.
3.5.1 User acceptance
This section assesses user acceptance, i.e., the degree to which the users of the proposed system
are willing and able to use the system. It is important to consider user acceptance when assessing
operational feasibility because it is important to ensure that the system will be used by the people
who need it.
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3.5.2 Organizational change

This section assesses organizational change, i.e., the process of making changes to an
organization's structure, processes, or culture. It is important to consider organizational change
when assessing operational feasibility because it is important to ensure that the organization is
able to manage the change associated with the new system.
3.5.3 Operational risks
This section assesses operational risks, i.e., the risks associated with the day-to-day operation of
the proposed system. These risks may include system failures, data loss, or security breaches. It
is important to consider operational risks when assessing operational feasibility because it is
important to identify and mitigate these risks.
Examples of operational feasibility:
Example 1:
A company is considering developing a new e-commerce system. The new system will be
integrated with the company's existing order processing and inventory management systems. The
company has experience with implementing new systems and has a plan to manage the change
associated with the new e-commerce system. Therefore, the project is operationally feasible.
Example 2:
A hospital is considering developing a new electronic health record (EHR) system. The new
EHR system will be integrated with the hospital's existing patient scheduling and billing systems.
The hospital has limited experience with implementing new systems and does not have a plan to
manage the change associated with the new EHR system. Therefore, the project is not
operationally feasible.
3.6 Legal feasibility
Legal feasibility assesses whether the proposed project complies with all applicable laws and
regulations. This includes considering data privacy laws, intellectual property laws, and other
industry-specific regulations
3.6.1 Data privacy laws
This section assesses data privacy laws, i.e., laws that protect the privacy of individuals' personal
data. It is important to consider data privacy laws when assessing legal feasibility because it is
important to ensure that the proposed project complies with these laws.
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3.6.2 Intellectual property laws

This section assesses intellectual property laws, i.e., laws that protect the ownership of creative
works and inventions. It is important to consider intellectual property laws when assessing legal
feasibility because it is important to ensure that the proposed project does not infringe on the
intellectual property rights of others.
3.6.3 Other applicable laws and regulations
In addition to data privacy laws and intellectual property laws, there may be other
industryspecific laws and regulations that apply to the proposed project. It is important to
consider all applicable laws and regulations when assessing legal feasibility.
Examples of legal feasibility:
Example 1:
A company is considering developing a new e-commerce system. A company is considering
developing a new e-commerce system. The company will need to comply with all applicable
data privacy laws, such as the Data Protection Act, 2019. The company will also need to comply
with all applicable intellectual property laws, such as copyright and trademark law. In addition,
the company will need to comply with all other applicable laws and regulations, such as financial
regulations and industry-specific regulations.
Example 2:
A hospital is considering developing a new electronic health record (EHR) system. A hospital is
considering developing a new electronic health record (EHR) system. The hospital will need to
comply with all applicable data privacy laws, such as the Health Information and Data Protection
Act, [Link] hospital will also need to comply with all applicable intellectual property laws,
such as copyright and trademark law. In addition, the hospital will need to comply with all other
applicable laws and regulations, such as healthcare regulations and industry-specific regulations.
3.7 Conclusion
This section communicates the overall results of the feasibility study
Example 1: The proposed system is feasible to develop, implement, and use. The technical,
economic, operational, and legal feasibility assessments have concluded that the system is viable
Example 2: The project team recommends proceeding with the development of the proposed
system.