Feasibility Analysis

Feasibility analysis helps an organization decide whether to proceed with a project by answering critical questions:

• Is this project feasible?
• What are the risks?
  • Identify risks that need to be addressed if the project is approved
• Can these risks be overcome?

Major Components:

• Technical feasibility: Can we build it?
• Economic feasibility: Should we build it?
• Organizational feasibility: Will they use it?

Technical Feasibility

Key factors affecting technical feasibility:

• Familiarity with technology: Less familiarity introduces more risk.
• Project size: Larger projects carry more risk.
• Compatibility: Difficult integration increases risk.

Key question: Can we build it?

Economic Feasibility

To determine economic feasibility, it is essential to:

• Identify the costs and benefits:
  • Development costs
  • Annual operating costs
  • Annual benefits (cost savings, revenues)
  • Intangible costs and benefits
• Determine the cash flow
• Assess value using methods like:
  • Net present value (NPV)
  • Return on investment (ROI)
  • Break-even point

Break Event Point

Cost-benefit analysis is used to weigh the overall financial impact. Key question: Should we build it?

Organizational Feasibility

Organizational feasibility examines:

• Conducting a stakeholder analysis to identify:
  • Project champion(s)
  • Senior management
  • Users
  • Other stakeholders
• Whether the project is strategically aligned with the business.
• User acceptance: Will the users adopt the system?

Key question: If we build it, will they use it?