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Project Feasibility Assessment

An organization often undertakes an initial study to determine if a new project can support the organization’s goals and mission. You will create a research-backed feasibility study in support of the viability of your project.
The project is “Reward Program” for businesses/company.

Project Assessment

The Assessment will be comprised of four sections. Specific research requirements are delineated for each component.

Project Description (1/2 page)

Explain the project in simple terms. The description should include its proposed purpose and information about the organization where the project will be supported (location, industry, size). The organization does not have to be real. It may be fictional, but all research support in future sections must assume it is “real.”

Market and Competition (1 page)

Identify your end users inside and outside of the organization. What group(s) will the completed project serve? Research is required to back-up your selection and to provide statistics to show that it is a viable market.

Analyze the competition, especially the largest players. Consider the size of the market and how many competitors control the majority of the market.

Research in this section MUST include some content listed under Module 1 Assignment Resources.

Technical and Resource Requirements (1/2 page)

For this section, include information on what categories of expenditures are required such as labor, training, technology, capital expenses, or supplies. Explain the rationale for the costs, do basic research, and provide cost estimates.

Internet research is acceptable.

Recommendations (1/2 page)

Based on what you presented in the first three sections, explain how this project is deemed to be viable.

Be sure to support your analysis with research.

Effective academic and research writing requires a 3rd person voice. This assignment must be written in 3rd person. 

Module 1 References:



M1 Chapter 3 Project Phases and Organization

 -22 pages

Project101x: Project initiation in review (2:23)


https://www.youtube.com/watch?v=gqfxaZct5ZI

Project Management in Under 5: What is Project Scope? (3:29)


https://www.youtube.com/watch?v=NXw0bvvYWYo

Project Management in Under 5: What is a Project Goal? (2:25)


https://www.youtube.com/watch?v=yVuJ5LrypZA

SMART Objectives:

Writing SMART Objectives (5 pages with links)


https://www.cdc.gov/healthyyouth/evaluation/pdf/brief3b.pdf

 

Writing S.M.A.R.T. Goals (3 pages)


https://www.mindtools.com/pages/article/smart-goals.htm

How to Write Effective Project Objectives Every Time – Project Management Training (3:23)


https://www.youtube.com/watch?v=hsSnumXk9lM

References:



M1 Chapter 7 Starting a Project

-31 pages

The Whys and Wherefores of a Project Feasibility Study– 1 page


https://www.brighthubpm.com/project-planning/5589-project-feasibility-study/

The Project Management Life Cycle – Successfully Guide Your Projects to Completion- 1 page


https://www.brighthubpm.com/monitoring-projects/1907-successfully-guide-your-projects-to-completion-with-the-pm-life-cycle/

Reviewing the 4 Steps of a Feasibility Study Method – 1 page


https://www.brighthubpm.com/project-planning/5598-feasibility-study-method/

Six Feasibility Study Steps – 1 page


https://www.brighthubpm.com/project-planning/5599-six-feasibility-study-steps/

How to Write Effective Project Objectives Every Time – Project Management Training (3:23)


https://www.youtube.com/watch?v=hsSnumXk9lM

The 5 Phases of A Project Life Cycle

2008-06-23

Monitoring and Controlling the Project

PAGE CONTENT

·
Phases of a Project Life Cycle

·
References

Phases of a Project Life Cycle

No matter what project it is that you’re preparing for, the 5 phases of a project life cycle can assist you and your team in narrowing the project’s focus, keeping it’s objectives in order and finishing the project on time, on budget and with a minimum of headaches.  Project Management Life Cycle Every project management life cycle contains five steps: Initiation, Planning, Execution, Monitoring/Control and Closure. No one step is more important than the other and each step plays a crucial role in getting your project off the ground, through the race, down the stretch and across the finish line. 1) 
Initiation
 In this first step you provide an overview of the project in addition to the strategy you plan on using in order to achieve the desired results. During the Initiation phase you’ll appoint a project manager who in turn – based on his or her experience and skills – will select the required team members. And lest you think you need to be a Bill Gates or Donald Trump in order to see your project take on a life of it’s own, fear not: there are some great technological tools available to get you through the Initiation phase of the project management life cycle. 2) 
Planning
 The all-important second step of any successful project management life cycle is planning and should include a detailed breakdown and assignment of each task of your project from beginning to end. The Planning Phase will also include a risk assessment in addition to defining the criteria needed for the successful completion of each task. In short, the working processes defined, stake holders are identified and reporting frequency and channels explained. 3 & 4) 
Execution
 and 
Control
 Steps Three and Four take you into deeper water. When it comes to the 5 phases of a project life cycle, execution and control just may be the most important of the five steps in that it ensures project activities are properly executed and controlled. During the Execution and Control phases, the planned solution is implemented to solve the problem specified in the project’s requirements. In product and system development, a design resulting in a specific set of product requirements is created. This convergence is measured by prototypes, testing, and reviews. As the Execution and Control phases progress, groups across the organization become more deeply involved in planning for the final testing, production, and support. 5) 
Closure
 By the time you reach Step Five – Closure – the project manager should be tweaking the little things to ensure that the project is brought to its proper conclusion. The Closure phase is typically highlighted by a written formal project review report which contains the following elements: a formal acceptance of the final product (by the client), Weighted Critical Measurements (a match between the initial requirements laid out by the client against the final delivered product), lessons learned, project resources, and a formal project closure notification to higher management. The Project Management Cycle saves time and keeps everyone on the team focused. Fortunately, modern technology provides a variety of templates that will take you from start-to-finish, which makes the Project Management Cycle user friendly no matter what your level of management experience may be!

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Chapter 7
Starting a Project

This chapter provides an overview of the selection and initiation of a project. Prior to the

initiation of a project, the chartering organization—the organization that determines the

need for the project—develops a justification for the project. Often, several initiatives

compete for the resources of the organization, and potential projects are evaluated to see

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which ones are best aligned with the mission and goals of the organization. This evaluation

process can be very simple where the benefits to the organization are obvious and the

economics of the project are very favorable. On larger, more complex initiatives, the

process of gathering and evaluating the data to justify the project can take a year or more.

The information gathered during this evaluation process provides the basis for the project

charter, the initial scope of work, and other information required to initiate the project.

7.1 Project Selection
L E A R N I N G O B J E C T I V E S

1. Describe the difference between an organization’s mission, goals, and objectives.

2. Describe how the missions are different depending on the type of organization.

3. Define economic terms used for choosing projects.

4. Define a project champion and his or her role.

5. Describe the influences of funding, timing, and unofficial considerations on project

selection.

Projects are chosen for a variety of reasons and not all of them are apparent. The project

manager must understand why a project was selected over other choices so that he or she

can align the team toward justifying the choice that has been made by senior management.

Mission of the Organization

The mission of an organization is a statement of why it exists. For example, a police

department might have its mission stated on the door of each patrol car—to protect and

serve. A well-written mission statement is short and has the following sections:

Purpose of the organization

Primary stakeholders

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Responsibility of the organization toward the stakeholders

Products or services offered

Police Department Mission Statement
The mission of the Philadelphia Police Department is to fight crime and the fear of crime,

including terrorism, by working with our partners to enforce the laws, apprehend

offenders, prevent crime from occurring, and improve the quality of life for all

Philadelphians. [1]

The missions of organizations can be categorized as profit, not for profit, and government.

A business that is created to make a profit for its owners and stock holders must consider

the cost of each project and how much profit it is likely to generate. The mission statement

of a not-for-profit organization like a charity would emphasize the service it provides. A

not-for-profit organization must control its costs so that it does not exceed its funding, and

it is always seeking funding and is in competition with other not-for-profit organizations

for funding from the same sources. A government agency, like a police department, is

similar to a not-for-profit organization, but its sources of funding are usually taxes and fees.

Its mission would include its responsibilities to the citizens it represents. Government

organizations compete for funding from higher levels of government. Projects are more

likely to be funded if the proposal for the project is closely aligned with the mission of the

organization. The project manager must be aware of that mission while building a team and

aligning it behind the purpose of the project.

Goals and Objectives

Senior administrators of the organization decide on how to achieve the mission of the

organization by choosing goals. For example, the director of a not-for-profit preschool that

provides low-cost education for children of poor, single parents might set a goal of

improving its reputation for quality. A goal is an end toward which effort is directed. The

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director meets with her staff and they consider several ways of achieving that goal. They

decide to seek certification by a nationally known group that evaluates the quality of

preschool programs. Obtaining this certification is anobjective.

Figure 7.1 Relationships between Mission, Goals, and Objectives

In this text, we distinguish between the terms goals and objectives. An objective must have

a measurable outcome. In this example, it is easy to measure whether or not the

organization receives the certification, which is the distinguishing characteristic of an

objective. The use of these terms is not standardized across the industry or in business, but

we will be consistent within this text. To determine whether a statement is a goal or an

objective, simply ask if there is a measurable outcome. Seeking the certification is an

objective that can be met by treating it as a project that has a measurable outcome and a

limited time frame.

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Economic Selection Criteria

If an organization’s mission is to make money, it will try to maximize the profits of the

company by increasing the money coming in or decreasing the money going out. The flow

of money is called cash flow. Money coming in is positive cash flow, and money going out is

negative. The company can maximize profits by improving its operational efficiency or by

executing projects. The company must raise money to fund projects. Companies can raise

money in three ways:

1. Borrow it (government organizations, such as cities and schools, can sell bonds, which is a

form of borrowing).

2. Fund the project from existing earnings.

3. Sell additional stock or ownership shares in the company.

If a company borrows money, it must pay back a portion of the amount it borrowed plus

additional interest. The interest is a percentage of the amount of the loan that has not been

repaid. The repayment of the loan and interest is usually paid quarterly or annually. To

qualify for selection, a project that is intended to make or save money must be able to do

the following:

Repay loans if money must be borrowed to fund the project

Increase future earnings for shareholders

Make the company stock more valuable

When senior managers at a for-profit company decide which projects to fund, they must

consider these economic issues.

Simple Payback

To help managers choose between projects, they can use an unsophisticated measurement

calledsimple payback. If the purpose of the project is to improve cash flow—make it more

positive or less negative—the improved positive cash flow each year is applied to the

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original cost (negative cash flow) of the project to determine how many years it would take

to pay back the original cost. It is assumed that after that date, the improved cash flow

could be used for other purposes or paid out to owners. For example, if the company

borrows $100,000 to fund the project and the project increases cash flow by $20,000 a

year, the simple payback would be five years, as shown in Figure 7.3 “Simple Payback”.

Figure 7.3 Simple Payback

The cash flow from each year is summed up in the cumulative cash flow row. When the

cumulative cash flow becomes zero or positive, it means that the original cost has been paid

back by the increased income or savings created by the investment.

Companies can use simple payback to establish a cutoff for project consideration. For

example, management could declare that no projects will be considered that have a

payback of more than three years. For projects that meet this criterion, projects with

shorter simple payback periods would have an advantage in the selection process. Not-for-

profit or government organizations are likely to approve projects with longer simple

payback periods because they are not compared to other not-for-profit or government

agencies based on their profitability.

Internal Rate of Return

Companies whose mission is to make a profit are usually trying to make more profit than

their competitors. Simply paying back the loan is not sufficient. If the project involves

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buying and installing equipment to make a profit, executives can use another method

calledinternal rate of return (IRR). The IRR is like an internal interest rate that can be used

to compare the profitability of competing projects. To calculate an IRR, the company

considers the cash flow each year for the expected life of the product of the project. It

assumes that some of the annual cash flows will be negative and that they can vary from

year to year due to other factors, such as lost production during changeover, periodic

maintenance, and sale of used equipment. For example, a company decides to upgrade a

manufacturing line with new equipment based on new technology. They know that the

initial cash flow—shown in year zero—will be negative due to the expense of the

conversion. They know that the new equipment has an expected life of six years before

newer technologies make it out of date, at which time they can sell it for a certain salvage

value. The inputs to the IRR calculation are the net cash flow for each year where at least

one of them is negative and at least one of them is positive. The result is a percentage that

indicates how well this project performs as an investment. Refer to Figure 7.5.

Figure 7.5

The internal rate of return measures the profitability of an investment.

The life of the equipment is part of the IRR calculation. If a project manager knows that

senior management intends to sell the equipment in six years, team members can be made

aware of that decision if it affects their choices.

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Other Selection Criteria

Besides making money, there are many other reasons for a project to be selected, including

the following:

Keeping up with competitors

Meeting legal requirements, such as safety or environmental protection

Improving the organization’s public image

The timing of the project can be very important. A project might be selected at a particular

time of year for some of the following reasons:

Accumulating a year-end budget surplus

Increasing executive bonus for the year or quarter

Funding or certification review deadline

If the project manager must make changes to the schedule at some point in the project that

could affect its completion date, it is valuable to know if the project was selected because of

timing.

Project Champions and Opponents

In addition to knowing why a project was selected, it is valuable to know which senior

executives supported or opposed the selection of the project and if the project manager’s

supervisor was in favor of it or not. Because most project teams consist of people who do

not report to the project manager but who report to other unit managers, they might not be

available when you need them if their boss thinks other projects are more important. If a

particular executive proposed the project and actively advocated for its approval, that

person could be a source of support if the project runs into trouble and needs additional

resources. A project champion, sometimes called an executive sponsor, is an influential

person who is willing to use his or her influence to help the project succeed.

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To identify the advocates and opponents of the project, begin by reading public documents

(if available), such as the minutes of the meeting at which the project was approved. Next,

the project manager can use his or her unofficial network of trusted colleagues to get their

opinions. Those discussions should be informal and off the record. Those opinions might be

inaccurate, but it is valuable to know what misunderstandings exist about a project. If

executives in an organization are assigned as project sponsors, the project champion might

be a different person.

Project Champions Support an Aircraft Project
When Vought Aircraft won a contract with Boeing to build a significant portion of the

fuselage for the new 787 Dreamliner in Charleston, South Carolina, there was no existing

workforce with aircraft experience. To give Vought Aircraft an incentive to locate the plant

in South Carolina, Governor Mark Sanford, with the support of the legislature, committed to

the recruitment and training of the workforce needed for the plant to be successful. The

legislature provided several million dollars and assigned the role of developing a trained

workforce to the South Carolina Technical College System and Trident Technical College,

the local community college in Charleston, South Carolina.

Dr. Jim Hudgins, president of South Carolina’s Technical College System, assigned the most

experienced project manager to the project and personally accepted the role of project

sponsor.

Dr. Hudgins and Dr. Thornley, president of Trident Technical College, met with the project

leadership at least monthly to review project plans and progress. Each month both Dr.

Hudgins and Dr. Thornley assigned resources and removed barriers to project success. Dr.

Thornley assigned procurement personnel to the project to assure materials were

purchased and delivered in time to support the project schedule. She reallocated space to

provide training laboratories for the project and assigned a college leader to the project

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full-time to coordinate actions with the college. Dr. Hudgins coordinated with the

Governor’s office to assure the project received the appropriate level of support.

Both Dr. Hudgins and Dr. Thornley had the political power and the resources to assure the

project had the autonomy and the resources to succeed. The project met every milestone,

exceeded every measurable goal, and received high praise from Vought Management as the

plant began operations on schedule.

K E Y T A K E A W A Y S
A mission statement declares the purpose of the organization and identifies the

primary stakeholders, the products or services offered, and the responsibility toward

the stakeholders. Goals are statements of direction for the organization, and

objectives are activities that achieve those goals with measurable outcomes.

Profit-making organizations exist to make profits for their owners while in competition

with other companies. The goals of those companies are directed at making as much

or more money than the competition. Not-for-profit organizations are directed at

providing a service to a particular group. They must control costs to perform their

tasks with the funds they have, and they compete with other not-for-profit

organizations for donations and funding. A government agency is similar to a not-for-

profit organization, but its sources of funding are usually taxes, fees, and funding from

a higher level of government, and it has a responsibility to the citizens it represents.

Government organizations must justify their expenditure of tax money to elected or

appointed officials.

Two economic tools for evaluating and comparing projects are simple payback and

internal rate of return. Simple payback is a calculation of the year when the

cumulative income or savings due to spending money on a project will meet or exceed

the original cost of the project. Internal rate of return is a calculation of the average

percentage of increased cash flow over the life of the project’s product.

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A project champion is an influential person who is willing to use his or her influence to

help the project succeed. It is useful to know why the project champion wants the

project to succeed and to be sure to accomplish that goal even if it is not stated.

Project selection depends on the availability of funds, which depends on the way each

type of organization receives money for projects. Funds might be available at certain

times and projects are selected that can take advantage of that opportunity. Projects

might be initiated for reasons that are not stated, and investigating the source of

funding and likely motivation of project champions can provide better understanding

of the project’s chances for success.

5. If a company had to choose between installing two different pieces of expensive

equipment that had different expected lifetimes, different salvage values, and

different production capabilities, it would compare the _______ _____ __ ________

(four words) for each option

6. On Google’s Web pages, it says that they want to “organize the world’s information

and make it universally accessible and useful.” This is an example of a _______

statement.

7. An influential person who is in favor of a project is one of the project ________.

8. If upgrading the windows in a building costs $100,000 and it reduces heating and

cooling costs by $5,000 a year, the investment in the window upgrade has a _____

______ (two words) of twenty years.

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The scope document defines what tasks the project team is expected to accomplish and,

just as importantly, what is not part of the project. Depending on the complexity level of the

project, the scope document can be as short as one page or as long as several hundred

pages. On more technical projects, such as a project to design an offshore wind-turbine

farm, the scope would include a significant amount of technical specifications, with a focus

on the electrical output from the wind turbines. The size and character of the project scope

document is related to the project complexity. Higher scores on the Darnall-Preston

Complexity Index indicate the need for more detailed scope documents.

Uses of a Scope Document

A well-developed project scope statement provides the project team with information the

team needs to design and implement the project execution plan. The well-developed

project scope also provides the team with an understanding of the purpose of the project

and the basis for defining project success.

Scope Document for Training Auto Workers
An automotive company is building a new plant to produce electric passenger cars in the

southeast United States. As the plant nears completion, the plant’s manager issues a

contract to train the new plant workers. The training of workers who will be maintaining

the production equipment will be done by the equipment suppliers and will not be in the

scope of the training contract.

The scope of work for the training project will include the identification of the knowledge,

skills, and abilities needed by each classification of worker and the development of the

delivery methodology that will effectively and efficiently develop the identified knowledge,

skills, and abilities (online, classroom, hands-on). The scope will also include delivery of the

training, evaluation of the workers after training, and the development of training records.

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Items not included in the project scope are items that will be the responsibility of the

automotive company, such as the selection and hiring of the workers and the provision of

the automotive tools and equipment needed for training. These exclusions are specifically

stated in the scope document.

During the design of the plant, the Human Resources Division of the company explored

different workforce models. The plant will be a typical assembly operation working three

shifts. Experience in other plants indicated that a team-based approach combined with a

lean manufacturing philosophy produced the highest productivity. This information was

included in the documents provided to the team developing the training project’s scope.

The plant manager, the human resources manager, and the plant engineer reviewed and

occasionally made changes to the draft training scope.

The scope of work for the training project was developed from a combination of

information from experts with previous experience, documents that reflected the plant

operation philosophy, and selected managers from operations and human resources. All

the knowledge needed to develop the scope was within the automotive project team.

Sometimes outside consultants are needed to develop a complete project scope. For

example, if the team in our automotive training example did not have experience in the

start-up of another automotive plant, then the hiring of a consultant with that experience

might have been required to understand the entire scope of activities needed for training

the automotive workforce.

The automotive project described above is a typical example of the types of information

and the people involved in developing a project scope. From the information in the project

description, the project team could develop a project scope document.

Development of a Scope Document

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The project manager will often develop the first draft of the project scope and then

solicit feedback and suggestions from the project team, client, and sometimes key

vendors. The project manager will attempt to develop consensus around the project

scope, but the final approval belongs to the project client or sponsor. Depending on the

complexity profile of the project, the development of the project scope document can be

a short discussion between the project manager and the client, or on a large, complex

project, the process can take weeks.

Managing Changes to the Scope Document

The project scope is not a stagnant document, and changes are to be expected. Changes to

the project scope are necessary to reflect new information. Changes to the project scope

also create the opportunity for new purposes to emerge that will change the end results of

the project. In some cases, these new results represent a positive outcome for the

chartering organization.

Deviation versus Change

If a minor change is made to the schedule that does not affect the completion date of the

project, it is a deviation from the schedule. As long as the end date of the project or

major objectives are not delayed, a formal change request to the client is not needed.

Recording and communicating these schedule deviations is still important for

coordinating resources and maintaining the client’s awareness of the project’s progress.

Deviation of Labor Cost
The labor cost was estimated at fifteen dollars per hour for cleaning the project office once

per week. The winning bid for the contract was at sixteen dollars per hour. The cost

deviated from the estimate and a change was made to the budget. This was a cost deviation,

not a change in scope. The additional cost for the contract was covered from the project

contingency reserves, and the budget was revised to reflect the changes.

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Truck Crash Causes a Deviation to the Schedule
Installation of a fence around the project site was delayed when the truck delivering the

fence was wrecked on the way to the job site. The fence project was delayed by one week

and the delay did not affect any other activity on the project. This deviation from the

original schedule did not cause a delay in the project, and the schedule was adjusted as a

deviation to the schedule—not a change request.

Documenting Changes

It is important to have a written record of changes to the scope of a project. On the least

complex projects, an e-mail message can be sufficient, but on larger projects a standard

form is normally used. The following steps are paraphrased by Tom Mochal, [1] and they

have the necessary components of a change documentation process:

Inform project stakeholders of the change request process.

Require that the change request is made in writing, including the business value of the

change to the project.

Enter the request in the scope change log.

Estimate the time needed to evaluate the change. If the evaluation process is time

consuming and would affect activity completion dates by diverting management resources,

get approval from the project sponsor to evaluate the change request. If the evaluation is

not approved, record the decision in the scope change log.

Evaluate the change and its impact on the schedule and budget if the evaluation is

approved.

Present the change request to the project sponsor for approval. Record the decision in the

scope change log with the recommended course of action.

Distribute the scope change log periodically to team members so they know what changes

are being considered and what happened to those that were not approved or evaluated.

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If the change is approved, update the project charter or other initiation documents.

Update the work plan.

Distribute the revised work plan to stakeholders and team members.

K E Y T A K E A W A Y S
Scope is a description of the major tasks that are included in the project and some of

the tasks that are specifically not included. More complex projects require more

detailed and specific scope documents.

A scope document is used to provide the project team with the information it needs to

design and implement the project plan. It provides understanding of the purpose of

the project and what project success would be.

The scope document begins as a draft that is circulated for comments by the team,

client, and in some cases, key vendors. The final draft is approved by the client or

sponsor. Changes to the scope are documented carefully using standard forms and

processes and approved by the project sponsor or client.

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7.3 Project Start-Up

L E A R N I N G O B J E C T I V E S
1. Identify the major activities included in project start-up.

2. Explain how the project start-up activities may differ on a highly complex project.

The parent organization’s decision-making process influences when start-up activities of

the project will take place. The transition from planning to project initiation is typically

marked by the decision to fund the project and selection of the project manager. However,

selection of the project manager is not always the defining event. Some organizations will

have the project manager involved in project evaluation activities, and some select the

project manager after the decision to fund the project has been made. Including the project

manager in the evaluation process enables the project manager to have an understanding

of the selection criteria that he or she can use when making decisions about the project

during later phases. Selecting the project manager prior to a complete evaluation also

includes some risks. The evaluation of the project may indicate a need for project manager

skills and experiences that are different from the project manager who is involved in the

evaluation.

Selecting the best project manager depends on how that person’s abilities match those

needed on the project. Those skills can be determined using the Darnall-Preston

Complexity Index (DPCI). If the project profile indicates a high complexity for external

factors and a medium complexity for the project’s technology, the profile would indicate

the preference for a project manager with good negotiation skills and an understanding of

external factors that affect the project. Because of the technological rating, the project

manager should also be comfortable in working with the technical people assigned to the

project. The project manager involved in the project selection process may not be the best

match for the project execution.

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During the start-up of a project, the project manager focuses on developing the project

infrastructure needed to execute the project and developing clarity around the project

charter and scope. Developing the project infrastructure can be a simple task on a project

with a low complexity level. For example, the project manager of a worker training project

in South Carolina who works for a training college has existing accounting, procurement,

and information technology (IT) systems in the college that he or she can use. On large

complex projects, a dedicated project office, IT system, and support staff might be needed

that would be more challenging to set up. For example, on a large construction project in

South America, the design and operations offices were set up in Canada, Chile, and

Argentina. Developing compatible IT, accounting, and procurements systems involved a

high degree of coordination. Acquiring office space, hiring administrative support, and even

acquiring telephone service for the offices in Argentina required project management

attention in the early phases of the project.

The project manager will conduct one or more kickoff meetings to develop plans for the

following activities:

Establish the project …

What Is the Purpose of a Project Feasibility Study?

2008-08-25

Project Planning for PMs

PAGE CONTENT

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This post is part of the series: Feasibility Studies

Plenty of successful entrepreneurs have built businesses on the 
back of a napkin
. Or, at least, that’s how they tell the story. In reality, every good idea in a business must first survive a rigorous project feasibility study. For many project managers, a feasibility study represents the first four phases of the project cycle.

People love ideas. They come to us in the blink of an eye, or even in our dreams. Although it can be tempting to tackle a compelling new idea head on, project management veterans understand the importance of reviewing the opportunities and the challenges posed by a project. Because project management professionals tend to focus on getting things done, it can sometimes be hard to look at the overall viability of a new idea.

According to some business experts, only about one idea out of fifty has any real chance of long-term success. Making sure your idea falls within that two percent success rate can prevent time and resources from being devoted to a project that will probably fail, regardless of the execution. A well-orchestrated 
project feasibility study
 provides the kind of impartial analysis that can separate profitable ideas from unproductive brainstorms.

Facing the Challenges of a Project Feasibility Study

Often, the biggest source of criticism for a 
project feasibility study
 will come from the person or the team that championed the idea in the first place. Strong leaders can develop the ability to conduct a project feasibility study on their own ideas, since they have learned how to make peace with the fact that not every idea deserves to be fully explored.

First time entrepreneurs or project managers may prefer to conduct a such a study study with help from another professional or an outside consultant. External perspective can 
make or break a project idea
: if it makes sense to an impartial third party, it will probably make sense to pursue as a project.

Six Elements Every Feasibility Study Needs

2008-08-25

Project Planning for PMs

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Six Essential Feasibility Study Steps

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This post is part of the series: Feasibility Studies

Six Essential Feasibility Study Steps

By following the accepted 
feasibility study method
, project managers and their teams can reach the point of delivering their findings to stakeholders. The written report generated at the conclusion of the feasibility study can help move a team into the 
presentation phase of the project cycle
. Moving readers through the following feasibility study steps can clarify questions about the study’s recommendations.

Executive Summary

The most important page of the report is often the only page that many stakeholders actually take the time to read. Although it should always be presented on the first page of a report, the executive summary is a digest of the following five feasibility study steps.

Clear Project Description

A recap of the project as it is defined for the study can help stakeholders understand the questions asked and the results generated. 
Stating the project description
 in very basic terms removes uncertainty about a project for stakeholders who might otherwise be unfamiliar with the ideas the project represents.

Competitive Landscape

Reviewing the strengths, weaknesses, opportunities, and threats faced by a project helps decision makers focus on the big picture. In some organizations, leaders may not want to approach a new market unless they know they can dominate it. Other companies prefer to focus on profits gained instead of market share. Either way, the challenges faced should be clearly defined, along with the consequences of failure.

Operating Requirements

When following this set of 
feasibility study steps
, authors can use this point in the report to stay clear, focused, and unbiased about a project’s real needs. Project managers that understate the physical and fiscal resources required for a new product or service often end up with failed projects or unfulfilled promises.

Financial Projections

More than ever, Investors and CFOs pore over the financials in a feasibility study to make sure that projects can generate the kind of scalable profits that warrant their approval. Expert project managers emphasize the break-even analysis, a timeline view of the moment a project can pay for itself.

Recommendations & Findings

Summarizing all of the previous feasibility study steps, the recommendations and findings can shape the outcome of a project proposal. Instead of simply stating a “yes” or “no” answer to the question of project approval, this section offers an opportunity to enhance a project by pointing out areas of opportunity.

This post is part of the series: Feasibility Studies

Project managers can cover the first four phases of the project cycle by conducting a comprehensive feasibility study.

1.
The Whys and Wherefores of a Project Feasibility Study

2.
The Importance of a Feasibility Study

3.
Advantages of a Feasibility Study

4.
Reviewing the 4 Steps of a Feasibility Study Method

5.
Six Feasibility Study Steps

The Four-Step Method For Project Feasibility Studies

2008-08-25

Project Planning for PMs

PAGE CONTENT

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Four-Step Feasibility Study Method

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This post is part of the series: Feasibility Studies

Four-Step Feasibility Study Method

Feasibility studies can take on different forms, depending on their contexts. In large enterprises, schools, and government agencies, a feasibility study could take months or even years of work in conjunction with outside consultants. On the other hand, a small business with the right connections and resources can perform an ad hoc feasibility study over the course of a few days. Regardless of the timeframe involved, the project manager in charge of the feasibility study must remain impartial as he or she handles four critical tasks:

Examine the Market

The first step to an effective 
feasibility study method
 involves a critical analysis of the competitive landscape for a product or service. Many first-time entrepreneurs make the mistake of assuming that their product has no competition. In reality, any other way in which a customer allocates money, time, or attention can be viewed as competition. The feasibility study should paint a realistic picture of the likelihood that enough customers will be satisfied to result in a sustainable offering.

Review Technical Requirements

Understanding the needs of the marketplace does not always guarantee the ability to meet customers’ expectations. Including this analysis in the 
feasibility study method
 puts the overall requirements for a successful project into the proper context. In many cases, a study can help determine whether the project sponsor will require more resources internally or whether an outside vendor or partnership can handle the tasks more effectively.

Explore the Business Model

Having assessed the current market need and a team’s ability to execute, a feasibility study can look at the long-term viability of the overall business model. This 
feasibility study method
 relies heavily on tools like scenario planning to ensure long-term success. Project managers can discover whether the business model actually offers enough profit potential to make the initiative worthwhile. Likewise, study administrators can examine whether the new product or service under consideration requires such a significant change as to make it untenable within a business.

Look for an Escape Route

“Forever” is a dirty word among many venture capital firms. Investors like to know that they’ll make a profit, and they want to have a strong idea about when they can cash the check. Common 
feasibility study methods
 include an analysis of potential exit strategies, especially for investors and other stakeholders that may want to move on. Study leaders can investigate how a project will evolve over multiple iterations, and whether it relies too heavily on key personnel.

This post is part of the series: Feasibility Studies

Project managers can cover the first four phases of the project cycle by conducting a comprehensive feasibility study.

1.
The Whys and Wherefores of a Project Feasibility Study

2.
The Importance of a Feasibility Study

3.
Advantages of a Feasibility Study

4.
Reviewing the 4 Steps of a Feasibility Study Method

5.
Six Feasibility Study Steps

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