Project management

Unit 3

BHA
Dr Aqueela Syed
• UNIT – 3 - 10 hours
• Feasibility of the project - Technical feasibility,
marketing feasibility, socio economic
feasibility, Managerial feasibility and financial
feasibility.
SLO – Lecture 1
• Understand the meaning of the word Feasible
and feasibility
• What is the need to study feasibility in project
Management
• Different types of Feasibility
Feasibility
• Define feasibility: Feasibility refers to the
evaluation of a project's potential success and
viability before committing resources to it.
• Importance of feasibility: It helps in identifying
potential risks, estimating costs, assessing
benefits, and determining whether a project
aligns with the organization's goals.
Feasible: meaning
• Definition of feasible
• 1: capable of being done or carried out a feasible plan
• 2: capable of being used or dealt with successfully : SUITABLE
• 3: REASONABLE LIKELY gave an explanation that
seemed feasible enough
• Synonyms & Antonyms for feasible
• Synonyms: achievable, attainable, doable, possible,
practicable, realizable, viable, workable
• Antonyms: hopeless, impossible, impracticable, infeasible,
nonviable, unattainable, undoable, unfeasible, unrealizable,
unviable, unworkable
feasibility
• the state or degree of being easily or conveniently done.
• "the feasibility of screening athletes for cardiac disease"
• A feasibility study is an assessment of the practicality of a proposed project or system. A
feasibility study aims to objectively and rationally uncover the strengths and weaknesses
of an existing business or proposed venture, opportunities and threats present in the
natural environment, the resources required to carry through, and ultimately the
prospects for success. In its simplest terms, the two criteria to judge feasibility are cost
required and value to be attained.
• A well-designed feasibility study should provide a historical background of the business or
project, a description of the product or service, accounting statements, details of the
operations and management, marketing research and policies, financial data, legal
requirements and tax obligations. Generally, feasibility studies precede technical
development and project implementation. A feasibility study evaluates the project's
potential for success; therefore, perceived objectivity is an important factor in the
credibility of the study for potential investors and lending institutions. It must therefore be
conducted with an objective, unbiased approach to provide information upon which
decisions can be based.
Types of Feasibility
• Technical feasibility: Evaluates whether the required technology,
infrastructure, and expertise are available to implement the
project successfully.
• Economic feasibility: Assesses the financial viability of a project by
analyzing costs, benefits, and potential return on investment (ROI).
• Operational feasibility: Examines whether the project can be
smoothly integrated into existing operations and processes.
• Schedule feasibility: Determines whether the project can be
completed within the allocated timeframe and meets the desired
deadlines.
• Legal and regulatory feasibility: Assesses the project's compliance
with legal and regulatory requirements.
SLO -2
• Understand the various types of feasibility in
detail with examples for ease of recall
Technical Feasibility
• This assessment focuses on the technical
resources available to the organization. It helps
organizations determine whether the technical
resources meet capacity and whether the
technical team is capable of converting the
ideas into working systems. Technical feasibility
also involves the evaluation of the hardware,
software, and other technical requirements of
the proposed system.
Economic Feasibility
• This assessment typically involves a cost/ benefits
analysis of the project, helping organizations
determine the viability, cost, and benefits
associated with a project before financial
resources are allocated. It also serves as an
independent project assessment and enhances
project credibility—helping decision-makers
determine the positive economic benefits to the
organization that the proposed project will
provide.
Economic Feasibility Study
• Economic feasibility refers to the feasibility of the
considered project to produce economic benefits.
A benefit-cost analysis is needed. Furthermore, the
economic feasibility of a project can also be
evaluated by breakeven analysis. In order to
facilitate the consistent basis for the evaluation,
the tangible and intangible facet of a project must
be translated into the economic terms. Economic
feasibility is critical even when the project is non-
profit in nature.
Financial Feasibility
• Financial feasibility must be differentiated from economic
feasibility. The ability of the project management to raise
sufficient funds required to implement the proposed project is
included in the financial feasibility. Additional investors and other
sources of funds are considered by the project proponents for
their projects in many cases.
• In such situations feasibility, sources, soundness and applications
of these project funds may be a hindrance. Other aspects of
financial feasibility should also be viewed, if appropriate, like
creditworthiness, loan availability, equity, and loan schedule. The
implications of land purchase, leases and other estates inland are
also reviewed in the financial feasibility analysis.
Legal Feasibility
• This assessment investigates whether any aspect of
the proposed project conflicts with legal
requirements like zoning laws, data protection acts
or social media laws. Let’s say an organization
wants to construct a new office building in a
specific location. A feasibility study might reveal
the organization’s ideal location isn’t zoned for that
type of business. That organization has just saved
considerable time and effort by learning that their
project was not feasible right from the beginning.
Operational Feasibility
• This assessment involves undertaking a study
to analyze and determine whether—and how
well—the organization’s needs can be met by
completing the project. Operational feasibility
studies also examine how a project plan
satisfies the requirements identified in the
requirements analysis phase of system
development.
Scheduling Feasibility
• This assessment is the most important for project success;
after all, a project will fail if not completed on time. In
scheduling feasibility, an organization estimates how much
time the project will take to complete.
• When these areas have all been examined, the feasibility
analysis helps identify any constraints the proposed project
may face, including:
– Internal Project Constraints: Technical, Technology, Budget,
Resource, etc.
– Internal Corporate Constraints: Financial, Marketing, Export, etc.
– External Constraints: Logistics, Environment, Laws, and
Regulations, etc.
Managerial Feasibility Study
• Managerial feasibility is ascertained by certain
key elements like employee involvement,
demonstrated management availability &
capability and commitment. The managerial
and organizational structure of the project is
addressed by this feasibility which ensures
that the proponent’s structure mentioned in
the submittal is feasible to the kind of
operation undertaken.
Cultural and Social Feasibility
• Cultural Feasibility Study
– The compatibility of the proposed project with the cultural environment of
the project is included in the cultural feasibility. Planned operations should
be integrated with the local cultural beliefs and practices in labor-intensive
projects. For example, what a person is willing to perform or not perform is
influenced by his religious beliefs.
• Social Feasibility Study
– The effect that a proposed project may have on the social system in the
project environment is addressed in the social feasibility. It may happen
that a particular category of employees may be short or not available as a
result of ambient social structure.
– The influence on the social status of the participants by the project should
be evaluated in order to guarantee compatibility. It must be identified that
employees in particular industries may have specific status symbols within
the society.
Political Feasibility Study
• The directions for the proposed project are mostly dictated
by political considerations. This is certainly correct for large
projects with potential visibility that may have important
political implications and government inputs. For example,
regardless of the merit of the project, the political
necessity may be a source of assistance for a project.
• On the other hand, because of political factors, value able
projects may face uncontrollable opposition. An evaluation
of the objectives of the project with the current objectives
of the political system is required in the political feasibility
analysis.
Environment and Safety Feasibility
• Safety Feasibility Study
– Another important aspect that must be considered in project planning is
safety feasibility. Safety feasibility involves the analysis of the project in
order to ascertain its capacity to implement & operate safely with the
least unfavorable effects on the environment. Mostly in complex
projects, environmental impact assessment is not properly addressed.
• Environmental Feasibility Study
– The environmental aspect is very crucial in making any potential project
successful or failed. In the very early stages of the project, this aspect
should be considered. All the environmental concerns raised or
forecasted should be addressed in environmental feasibility so that
proper actions can be taken to cover relevant issues of the environment.
– The ability of the project to timely acquire the required permits, licenses
and approvals at a reasonable cost should also be included in this area.
Market Feasibility Study
• Market feasibility must not be mixed up with
economic feasibility. The potential influence of
market demand, competitive activities and
available market share should be considered in the
market feasibility analysis. During the start-up,
ramp-up and commercial start-up phases of the
project, possible competitive activities (local,
regional, national and international) should be
analyzed for early contingency funding and impacts
on the operating costs.
Feasibility Study Process
• Project identification: Identify the need for the project
and define its objectives.
• Preliminary analysis: Conduct a high-level evaluation
of the project's feasibility based on initial information.
• Feasibility study: Perform a detailed analysis of
technical, economic, operational, schedule, and legal
feasibility.
• Feasibility report: Document the findings of the
feasibility study, including risks, recommendations,
and potential mitigation strategies.
Key Considerations in Feasibility study
• Market analysis: Evaluate the demand, competition, and
potential market for the project's outcome.
• Cost estimation: Assess the project's financial requirements,
including investment, operational, and maintenance costs.
• Risk assessment: Identify potential risks, such as technical
challenges, resource constraints, market fluctuations, and
regulatory issues.
• Benefits analysis: Analyze the anticipated benefits of the
project, such as increased revenue, cost savings, improved
efficiency, or competitive advantage.
• Stakeholder analysis: Identify and engage key stakeholders to
understand their requirements, concerns, and support.