A project feasibility study examines all of a project's pertinent aspects, including economic, technical, legal, and scheduling issues to determine the possibility of the project's successful completion. Prior to commencing the project and investing funds, time, and efforts into it, managers conduct a feasibility study of the project.
Key elements of a good project feasibility study
In project management, a project feasibility study evaluates the following areas:
Technical Capability: Is the organization equipped with the necessary technical resources to complete the project
Budget: Does the organization have the financial resources to carry out the project, and does the cost-benefit analysis justify moving forward?
Legality: What is the project's legal requirements, and can the company meet them?
Risk: What are the risks involved in completing this project? Is the risk worth the company's money and time based on the expected benefits?
Operational feasibility: Does the project, in its intended scope, address the organization's needs through fixing problems and/or seizing opportunities?
Time: How much time would it take for completion?
Top 5 Different Types of Project Feasibility Studies
Since a feasibility analysis assesses a project's chances of success, perceived neutrality is a critical aspect of the study's credibility with possible investors and lenders. There are five different types of project feasibility studies, each of which examines a different topic, as stated below.
The technological resources that are used by the company should undergo an examination. It assists businesses in determining whether technical resources are sufficient for the job and whether the technical team is capable of executing planned concepts. To assess the technical viability factors like the system's hardware, software, and other possible technical needs are taken into account.
A cost-benefit analysis of the project is frequently included in this review, which helps firms determine the project's viability, cost, and benefits before investing financial resources. It also serves as an unbiased project evaluation, enhancing project credibility by supporting decision-makers in identifying the proposed project's favorable economic benefits to the company.
This assessment looks into if any component of the proposed project violates any regulations, such as zoning laws, data protection legislation, or social media laws. Let us take an example that a company that desires to build a new office building at a particular location. A feasibility study may discover that the desired location for the company is not designated for that sort of business.
4. Operational Feasibility
This assessment entails researching to evaluate whether — and to what extent — the project can meet the organization's needs. Operational feasibility studies also look at how a project plan meets the requirements specified during the requirement analysis phase.
5. Scheduling Feasibility
Scheduling feasibility evaluation is crucial for project success; after all, the project will fail if it is not completed on time. A company forecasts the amount of time it will take for project execution when scheduling feasibility.
After all of these factors have been considered, the feasibility study can help identify any potential project constraints, such as:
Internal project constraints include technological, financial, and resource constraints.
Export, financial, marketing, and other internal corporate constraints.
Logistics, the environment, laws and regulations, and so on are all external constraints.
Importance of Project Feasibility Study
The value of a feasibility study stems from the desire of an organization to “get it right” before investing resources, time, or money. A feasibility study may discover fresh ideas that alter the scope of a project. It's preferable to make these decisions ahead of time rather than rushing into a project only to discover that it won't work. A feasibility study is usually advantageous to a project since it provides you and other stakeholders with a clear picture of what is being planned.
Following are the major benefits that project feasibility study offers:
Improves the attention of project teams
Discovers fresh possibilities
Provides relevant information that helps in making the judgment regarding whether to proceed or not.
Reduces the number of business options
Identifies a compelling reason for pursuing the project.
By examining several parameters, it improves the success rate.
Assists in project decision-making
Determines why it's not a good idea to go ahead.
Conducting a Project Feasibility Study
Various companies that conduct a project feasibility study in Gurgaon and Mumbai follow the following steps:
Preliminary Analysis: Many organizations may do a preliminary analysis, which is similar to a pre-screening of the project, before moving forward with the time-consuming process of a feasibility study. The purpose of the preliminary analysis is to identify insurmountable barriers that would render a feasibility study ineffective. If no major impediments are discovered during this pre-screening, a more thorough feasibility study will be conducted.
Define the scope: It's critical to define the project's scope so that the feasibility study's scope may be determined. The scope of the project will also take into consideration its impact on internal stakeholders as well as external clients or consumers. It is important to consider the project's potential impact on various sections of the company.
Market research: There is no such thing as a project that is performed in a vacuum. Those performing the feasibility assessment will look at the current competitive landscape to see if the project has a place in it.
Financial analysis: The project’s feasibility study will look at the project's economic costs, such as equipment or other resources, man-hours, the project's expected benefits, the break-even date, financial risks, and, most crucially, the financial impact of the project's failure.
Roadblocks and alternative solutions: If any potential obstacles arise during the study, it will investigate options to ensure the project's success.
Results re-evaluation: It's critical to take a fresh look at the feasibility study, especially if a large amount of time has passed after it was completed.
The last decision: Whether the project should proceed or not—is the final part of a feasibility study.
Preliminary Analysis: Many organizations may do a preliminary analysis, which is similar to a pre-screening of the project, before moving forward with the time-consuming process of a feasibility study. The purpose of the preliminary analysis is to identify insurmountable barriers that would render a feasibility study ineffective. If no major impediments are discovered during this pre-screening, a more thorough feasibility study will be conducted.
Define the scope: It's critical to define the project's scope so that the feasibility study's scope may be determined. The scope of the project will also take into consideration its impact on internal stakeholders as well as external clients or consumers. It is important to consider the project's potential impact on various sections of the company.
Market research: There is no such thing as a project that is performed in a vacuum. Those performing the feasibility assessment will look at the current competitive landscape to see if the project has a place in it.
Financial analysis: The project’s feasibility study will look at the project's economic costs, such as equipment or other resources, man-hours, the project's expected benefits, the break-even date, financial risks, and, most crucially, the financial impact of the project's failure.
Roadblocks and alternative solutions: If any potential obstacles arise during the study, it will investigate options to ensure the project's success.
Results re-evaluation: It's critical to take a fresh look at the feasibility study, especially if a large amount of time has passed after it was completed.
The last decision: Whether the project should proceed or not—is the final part of a feasibility study.
Suggested Best Practices to Conduct Project Feasibility study
Feasibility studies are unique because they reflect the aims and demands of each project. However, the following pointers can be used in any feasibility study. For instance, you might wish to try the following:
Obtain feedback from the right stakeholders on the new concept.
Analyze and challenge your data to ensure that it is reliable.
To assist in data collection, conduct a market survey or market research.
Make business, organizational, or operational plans.
Make forecasted income statement.
Prepare forecast of balance sheet.
Make a preliminary decision whether to proceed or not regarding carrying out the strategy.
When we talk about leading firms that conduct project feasibility in Gurgaon, Resurgent India is a leading financial advisory firm offering these services. We have a trained team of professionals that conduct thorough research for our customers and provide the best possible solutions.
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