PROJECT

FEASIBILITY STUDY

DEFINITION, NATURE AND PURPOSE

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A feasibility study is an analysis of the viability of an idea through a disciplined and documented process of thinking through the idea from its logical beginning to its logical end.

It is also define as an analysis and evaluation of a proposed project to determine if it (a) is technically feasibile), (2) is feasibile within the estimated cost, and (3) will be profitable. Feasibility study are almost always conducted where large sums are at stake. It is also known as feasibility analysis.

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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 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.

The nature and components of feasibility studies depend primarily on the areas in which analyzed projects are implemented.

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The purpose is to identify any “make or Break” issues that would prevent your business from being successful in the marketplace.

The feasibility study is conducted to assist the decision-makers in making the decision to the best interest of the organization. The extensive research, conducted in a non-biased manner, will provide data upon which to base a decision.

CHARACTERISTICS OF A GOOD FEASIBIITY STUDY

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BENEFITS THAT MAY BE DERIVED FROM

THE PREPARATION OF A PROJECT STUDY

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General requirements and potential benefits of conducting feasibility study include:

1) Developing any new business venture is difficult.

2) Taking project from initiation of idea to operational stage is complex and time consuming effort.

3) Projects involve business operations that differ from individual business.

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4) It minimizes project failure- Most ideas, whether from cooperative or investor-owned businesses, do not develop into business operations. If these ideas make it to the operational stage, majority of the fail within first six months.

5) Feasibility study allows groups developing a business idea to preview potential project outcomes and decide if they want to continue developing the project

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6)Though the cost conducting a study can seem high, almost always, these costs are relatively minor when compared to the total project cost.

7)Small initial expenditure on a feasibility study by a group can help to protect large capital investments later.

8)Feasibility study is a useful tool and is valid for many kinds of projects.

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9) An effective feasibility analysis will provide the client with a solid foundation upon which a project is built.

10)A feasibility study provides concept identification, estimates of supportable market, design parameters, attendance estimates, revenue projections, and net warranted investment.

11)It is essentially becomes a road map for your project.

KINDS OF PROJECTS AND PARTIES INTERESTED

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STEPS IN THE PREPARATION OF A

PROJECT STUDY

STEP1 Evaluation of a project according to selected criteria

There are usually five major criteria. One possibility of carrying out a quick and easy evaluation id to use tabular statement.

Evaluation of technical and system

capabilities/requirements

Evaluation of legal

capabilities/requirements

Evaluation of

operational capabilities/requirement

s

Evaluation of

economic capabilities/requireme

nts

Evaluation of

capabilities/requirementsRelated to the

scheduleThe type

of data/methods/soft

ware necessary

in the project

The name of

the source

of data/methods/software

The quality of the source

of data/methods/software

The rules of

publishing and using

owner

Know-ledge and skills

participation

cost time

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Evaluation of technological and system requirements

The evaluation of technical and system requirements refers basically to issues related to the type, availability and quality of the following, used in the project:• Data sources• Methods of data processing,

analyzing and visualizing• software

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Evaluation of legal requirements

The evaluation of legal requirements concern basically the rules of publishing and using data, software and methods. A part of the rules concerning publishing spatial data (mostly future ) can be found in the directives and in copyright laws. Most data and software include information on the form of publishing in metadata or websites where such data is published.

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Evaluation of operational requirements

Allowing for the level of knowledge and skills necessary for data acquisition, and later to process, analyze and visualize them, as well as to implement the results, is of paramount importance in the evaluation of operational requirements. Since the projects involved concern sustainable development and spatial planning, it is also important to allow for public participation (e.g. practitioners or representatives of local community.

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Evaluation of economic requirements

Two components are important in the evaluation of economic requirements:• The cost of data or software

procurement,• The cost of employing

workforce for specific tasks,• The cost of possible

improvement of qualifications of the workforce employed.

STEP

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Evaluation of requirements related to

the schedule

The evaluation of requirements related to the schedule concerns the estimation of time necessary to complete respective parts of project, e.g. data procurement and processing.

Step 2: Summary of evaluation results

A summary of project evaluation results, by presenting the strengths and weaknesses of suggestsed solutions, is another step of feasibility analysis. This part of analysis can be carried out usigng the components of SWOT analysis.Step 2 and 3 of feasibility studies (summary and recommendations) carried out using SWOT analysis

positive negative Stages of completing feasibility analysis

Internal features of the surrounding

Strengths of project

Weaknesses of the project

summary

External features of the surrounding

Opportunities –new solutions that can additionally emerge in the project

Threats concerning the additional solutions suggested in the project

recommendation

Step 2: Recommendations

Recommendationns are the last element of feasibility analysis. They contain directions of actions in the project which allow its better implementation.

Evaluation of legal

capabilities

Evaluation of

operational

capabilities

Evaluation of system

and technologi

cal capabilities

Evaluation of

capabilities related to

the schedule

Evaluation of

economic capabilitie

s

Recommen-dations

Summary of

evaluation results

STEP 1 STEP 2 STEP 3

Project evaluation

using selected

capabilities of feasibility

analysis Workflow in feasibility analysis