Project Feasibility

Project Feasibility

A feasibility study is a test of a system proposal according to its workability. Impact on organization, ability to meet user needs, and effective use of resources. Its focuses on three major questions : 

1. What are the user's demonstrable needs and how does a candidate system meet them?

2. What resources are available for a given candidate system (Information system) ? Is the problem worth solving?   

3. What is the likely impact of the candidate system on the organization? How will does it fit within the organization’s master plan?

Each of these questions must be answered carefully. They revolve around investigation and evaluation of the problem, identification and description of candidate system (Information system), specification or performance and the cost of each system and final selection of the best system. 

The objective of the feasibility study is not to solve the problem but to acquires a sense of its scope. The result of the feasibility study is a formal proposal. The proposal summarizes what is known and what is going to be done. Once the feasibility study has been compiled, it is submitted back to the approval of management along with a revised system request. The management then decides whether to approve the project, decline the project, or table it until additional information is available. 

Types of activities performed during the feasibility study are given below : 

1. Identify what the document is 
2. Description of current situation 
3. Problem description (statement of the problem) 
4. Proposed development 
• Business and financial aspects 
• Technical aspects. 
• Organizational aspects. 

1. Estimated cost 

• Development Cost. 
• Operational Cost 

1. Envisaged benefits. 
2. Recommendation 

Preliminary investigation examine project feasibility the likelihood the system will be useful to the organization. Three tests of feasibility are operational, technical and financial. All are equally important. 

1. Operational Feasibility 

Proposed projects are beneficial only if they can be turned into information system that will meet the organizations operating requirements. Questions raised by analysts during the preliminary investigation that will help test the operational feasibility of project :

1. Is there sufficient support for the project from management and users? If the current system is well liked and used to the extent that persons will not be able to see reasons for a change, these may be resistance. 
2. Are current business methods acceptable to the uses? If they are not, uses may welcome a change that will bring about a more operational and useful system. 
3. Will the proposed system cause harm? Will it produce poorer result in any respect or area? Will accessibility of information be lost? Will individual performance be poorer after implementation than before? Will customers be officiated in the undesirable way? Will the system slow performance in any areas ?  

Issues that appear to be relatively minor in the beginning have ways of growing into major problem after implementation. Therefore, all operational aspects must be considered carefully. 

1. Technical Feasibility 

Questions raised by analyst during the preliminary investigation that will help test the technical feasibility of the project : 

1. Does the necessary technologies exist to do what is suggested (and can it be acquired) ? 
2. Does the proposed equipment have the technical capacity to hold the data required to use the new system ?
3. Will the proposed system provide adequate responses to inquiries,  regardless of the number or location of users ? 
4. Can the system be expanded if developed? 
5. Are these technical guarantees of accuracy, reliability of access, and data security? 

1. Financial and Economic Feasibility 

A system that can be developed technically and that will be used installed must still be a good investment for the organization. Financially benefits must equal or exceed the costs. The financial and economic questions raised by analysts during preliminary investigations are for the purpose of estimating the following : 

(i) The cost of conduct a full system investigation. 

(ii) The cost of hardware and software for the class of application being considered. 

(iii) The cost nothing changes (i.e. the proposed system is not developed). 

The project proposed must be passed all these tests. Otherwise, it is not a feasible project. The purpose for assessing economic feasibility is the identify the financial benefits and costs associated with the development projects, economic feasibility is often referred to as cost-benefit analysis.  

Cost –benefit Analysis 

The most common way of carrying out an economic assessment of a proposed information system or software product, is by comparing the expect costs of development and operation of the system with the benefits of having it in place. 

Assessment focuses on whether the estimated income and other benefit exceed the estimated costs. Additionally, it is usually necessary to ask whether the project under consideration is the best of a number of options. There might be more candidate projects than can be undertaken at any one time and, in any case, project will need to be prioritized so that resources are allocated effectively

The standard way of evaluating the economic benefits of any project is cost-benefit analysis, comprising of two steps :- 

1. Identifying and estimating all of the costs and benefits of carrying out the project and operating the delivered application. These include the development costs, the operating costs and the benefits that are expected to accrue from the new system. Where the proposed system is replacing an existing one, these intimates should reflect the change in costs and benefits that are expected to accrue from the new system. Where the proposed system is replacing an existing one, these estimates should reflect the change in costs and benefits due to the new system. A new sales order processing system, for examples, could not claim to benefit an organization by the total value of sales – only by the increase due to the use of the new system. 
2. Expressing these costs and benefits in common units. We need to evaluate the net benefit, that is the difference between the total benefit and the total cost of creating and operating the system. To do this, we must express each cost and each benefit in some common unit, that is, as money. 

Most direct costs are relatively easy to identify and quantify in approximate momentary terms. It is helpful to categorize costs according to where they originate in the life of the project. 

• Development costs include the salaries and other employment costs of the staff involved in the development project and all associated costs. 
• Setup costs include the costs of putting the system into place. These consist mainly of the costs of any new hardware and ancillary equipment but will also include costs of file conversions recruitment and staff training. 
• Operating costs consist of the costs of operating the system once it has been installed. 

Benefits, on the other hand, are often quite difficult to quantify in monetary terms even once  they have been identified. The different types of benefits can be : 

1. quantified and valued – that is, a direct financial benefit is experienced; 
2. quantified but not valued- for example, a decrease in the number of customer complaints. 
3. Identified but not easily quantified – for example, public approval of the organization in the locality where it is based.