PROJECT

FEASIBILITY
Organizational Importance
&
Analysis Techniques

By Dr. Ali Sajid

 Preamble
What is feasibility?

Capable of being done with means at

hand and circumstances as they are

Synonym of Achievability
 For an organization

Feasibility is an important planning and organizing

procedure to make sure you project is effective and
will work
 Concept of
Feasibility Study
 Feasibility study determines the likelihood of project
success

 It requires that all elements impacted by the

proposed solution be studied

Many projects fail because of unfeasibility and

impossibility in their productive measures
 Graphical Analysis
Existing and
Perceived and Available
Real Needs Resources

Decision Outcome
• Accept project
List of Potential Project • Reject project
Selection • Delay project
and Ongoing
• Refocus project
Projects Decision
• End-user
Development
• Proof of concept

Current
Organizational Evaluation
Environment Criteria
 The Basic Steps
for Process
First you plan, then you analyze

 Planning your Project

what should be made; the design; inputs and post prospects

 Analyzing the Feasibility (Possibility) of your

Project
the project has possibility for completion; will it be successful
 The First Step

PROJECT PLANNING
When you decide to go to college, you formulate a plan

When you want to buy a home, you develop a plan

When you decide to start a family, you establish a plan

Why then would you invest millions of dollars in a project without a plan?
 FOREWORD
For any project to take an initiative, Planning is the first
and vital step

Definition:
an act of formulating a program for a definite
course of action; also a process of drawing layouts for
some project or enterprise
 Developing Project Plan
• Use project plans to coordinate rather than to control.

• Make use of different personalities within the project

environment.

• Prescheduled frequent revisions to project plans.

• Empower workers to estimate their own work.

• Describe value-creating tasks rather than activities.

• Define specific and tangible milestones.

• Use check lists, matrices, and other supplements to project

plans
 Factors involving Project Plan
In the initial stage of project planning, the internal and
external factors that influence the project should be
determined and given priority weights

The Influences include:

Internal Factors-
factors within the premises of the organization

External Factors-
factors involving the clients and the market
Internal Factors External Factors
Infrastructure
Project scope Public needs
Labor relations Market needs
Project location National goals
Project leadership Industry stability
Organizational goal State of technology
Management approach Industrial competitors
Technical manpower supply Government regulations
Resource and capital availability
 Project Execution Plan
Planning is an ongoing process that is conducted throughout the
project life cycle.
The basic components of a project plan are discussed below:-

 Outline of Project Plan-

This is a brief description of what is planned

 Approach-  
The managerial and technical methodologies of implementing the project
should be specified

 Objectives-
The objectives should be very detailed in outlining what the project is
expected to achieve
 Project Execution Plan contd…
 Policies and Procedures-  
Development of a project policy involving general guidelines for carrying out
project
 Contractual Requirements-
The portion of the project plan should outline reporting requirements
 Project Schedule-
The project schedule signifies the commitment of resource against time in
pursuit of project objectives
 Resource Requirements
Project resources, budget, and costs are to be documented in this section of
the project plan
 Project Execution Plan contd…

 Performance Measures-  
Measures of evaluating project progress should be developed

 Contingency Plans-  
Courses of actions to be taken in the case of undesirable events should be
predetermined

 Tracking, Reporting, and Auditing-

These involve keeping track of the project plans, evaluating tasks, and
scrutinizing the records of the project
 The Second Step

FEASIBILITY ANALYSIS
 Prelude

The most important step in any project

after a project plan should be
determining the viability of the idea
 Importance of Analysis
  An effective feasibility analysis will provide
the client with a solid foundation upon which a
project is built.
 
 A feasibility study provides concept
identification, estimates of supportable market,
design parameters, attendance
estimates, revenue projections, and
net warranted investment.

 It essentially becomes a road map

for your project
 An Overview of the Study
The feasibility study involves 
 Appraisal of existing systems and manual processes.

 Troubleshooting.

 Process re-engineering.

 Risk analysis and assessment.

 Risk management.

 Cost-benefit analysis.

 Impact analysis.

 Integration of existing and new systems.

 Resource requirements Planning and timings.

 Implementation strategy.

 Infrastructure assessment and requirements.

 Dependencies and requirements.

 Support requirements and logistical analysis

 Process of Analysis

Identify Set up Define scope

problem or feasibility and
opportunity study objectives

Carry out
Recommend – Evaluate
different
proceed alternatives –
aspects
/shelve develop/buy
of the study
 THE PROCESS OF
FEASIBILITY ANALYSIS
The basic tests for feasibility are as follows:
A. Technical Feasibility
B. Managerial Feasibility
C. Economic Feasibility
D. Financial Feasibility
E. Cultural Feasibility
F. Social Feasibility
G. Safety Feasibility
H. Political Feasibility
I. Environmental Feasibility
J. Market Feasibility
 THE PROCESS OF
FEASIBILITY ANALYSIS
The basic tests for feasibility are as follows:
A. Technical Feasibility
B. Managerial Feasibility
C. Economic Feasibility
D. Financial Feasibility
E. Cultural Feasibility
F. Social Feasibility
G. Safety Feasibility
H. Political Feasibility
I. Environmental Feasibility
J. Market Feasibility
 THE PROCESS DETAILS started…

A. Technical Feasibility-
The technical capability of the personnel as well as the capability of the
available technology should be considered

B. Managerial Feasibility-
Managerial feasibility involves the capability of the infrastructure of a
process to achieve and sustain process improvement

C. Economic Feasibility-
This involves the feasibility of the proposed project to generate economic
benefits.  A benefit-cost analysis and a breakeven analysis are important
aspects of evaluating the economic feasibility of new industrial projects
 THE PROCESS DETAILS goes on…

D. Financial Feasibility-
Financial feasibility involves the capability of the project organization to
raise the appropriate funds needed to implement the proposed project
(different from economic feasibility)

E. Cultural Feasibility-
Cultural feasibility deals with the compatibility of the proposed project with
cultural setup of the project environment

F. Social Feasibility-
Social feasibility addresses the influences that a proposed project may
have on the social system in the project environment
 THE PROCESS DETAILS on and on…

G. Safety Feasibility-
Safety feasibility is another important aspect that should be considered in project
planning.  
It also refers to an analysis of whether the project is capable of being implemented
and operated safely with minimal adverse effects on the environment

H. Political Feasibility-
A politically feasible project may be referred to as a "politically correct project."
 Political considerations often dictate direction for a proposed project

I. Environmental Feasibility-
Concern must be shown and action must be taken to address any and all
environmental concerns raised or anticipated
 THE PROCESS DETAILS and on…
J. Market Feasibility-
Another concern is market variability and impact on the project.  
This area should not be confused with the Economic Feasibility
The market needs analysis to view the potential impacts of market
demand, competitive activities, etc. and "divertible" market share
available
 THE SCOPE OF
FEASIBILITY ANALYSIS
The elements of feasibility analysis for a project should be
covering the below:

A. Need Analysis
B. Process Work
C. Engineering & Design
D. Cost Estimate
E. Financial Analysis
F. Project Impacts
G. Conclusions and Recommendations
 THE ELEMENTS started…
A. Need Analysis-

This indicates recognition of a need for the project:

-Is the need significant enough to justify the proposed project?

-Will the need still exist by the time the project is completed?
-What are the alternate means of satisfying the need?
-What are the economic, social, environmental, and political impacts of the need?

B. Process Work-

This is the preliminary analysis done to find requirements satisfying the need.
 
-The work may be performed by a consultant who is an expert in the project field.
-The preliminary study often involves system models or prototypes
 THE ELEMENTS goes on…
C. Engineering & Design-

This involves a detailed technical study of the proposed project

 
-Written quotations are obtained from suppliers and subcontractors as needed.
-Technology capabilities are evaluated as needed
-Product design, if needed, should be done at this time

D. Cost Estimate-

This involves estimating project cost to a suitable level of accuracy.

 
-Levels of around -5% to +15% are common at this level of a project plan.
-Estimates of capital investment, recurring and nonrecurring costs must be there
-Sensitivity analysis can be carried out on the estimated cost values to see how
sensitive the project plan is to the estimated cost values
 THE ELEMENTS on and on…
E. Financial Analysis-

This involves an analysis of the cash flow profile of the project

-The analysis should consider rates of return, inflation, sources of capital, payback
periods, breakeven point, residual values, and sensitivity
-This is a critical analysis since it determines whether or not and when funds will be
available to the project

F. Project Impacts-

This portion of the feasibility study provides an assessment of the impact of the proposed
project

-Environmental, social, cultural, political, and economic impacts may be some of the
factors that will determine how a project is perceived by the public
 THE ELEMENTS and on…
G. Conclusions and Recommendations-

The feasibility study should end with the overall outcome of the project

-This may indicate an endorsement or disapproval of the project.  

-Recommendations on what should be done should be included in this section of
the
feasibility report.
 The Analysis of Benefits
The Benefits can be of two types:

1. The Tangible Benefits

casually  A physical matter that can be touched

is tangible

2. The Intangible Benefits

 Tangible Benefits
• Fewer processing errors

• Increased throughput (ratio of output to input)

• Decreased response time

• Elimination of job steps

• Increased sales

• Reduced credit losses

• Reduced expenses
 Intangible Benefits
• Improved customer goodwill

• Improved employee morale

• Better service to community

• Better decision-making
 Potential Barriers
Many reasons can make your project impossible:

‡ Old, poor means of technology

‡ Lacking effective leadership

‡ Lacking communication

‡ Very low on funds

‡ The project is not necessitated in the market

 Summation
Feasibility analysis determines the likelihood of project
success

Clients most commonly employ your consultants during the

feasibility stage of a project

Significant value is in the determination of exactly what is

feasible and what is not, and not just for the moment in hand,
but also for the future as the business grows and technology
advances