Introduction: A feasibility study is an evaluation and analysis of the potential of the proposed project which is based on extensive investigation and research to give full comfort to the decisions makers. A feasibility study is essentially a process for determining the viability of a proposed initiative or service and providing a framework and direction for its development and delivery. It is a process for making sound decisions and setting direction. It is also a process which: * is driven by research and analysis * usually involves some form of consultation with stakeholders, community, users, etc. focuses on analyzing, clarifying and resolving key issues and areas of concern or uncertainty * very often involves basic modeling and testing of alternative concepts and approaches There is no universal format for a feasibility study. Feasibility studies can be adapted and shaped to meet the specific needs of any given situation. Definition: By Lahle Wolfe: “A feasibility study looks at the viability of an idea with an emphasis on identifying potential problems and attempts to answer one main question: Will the idea work and should you proceed with it? “Feasibility Study is basically a study that is done to judge the viability of a new business venture. It is actually a preliminary analysis of a project that lets the people know that whether to proceed with a project or not. ” Who undertakes such studies? * Project Manager: The Project Manager will take the lead in conducting the Feasibility Study, organizing the site visit and completing the Feasibility Study Report. * Feasibility Study Team: The Project Manager will form a Feasibility Study team to: * provide the required skills and knowledge (i. e. nowledge of the technical details of the project, familiarity with the local environment, an understanding of the local community and culture) and, * take part in the site visit. * Stakeholders: Stakeholder consultation will continue to play a major part of the project, particularly during the site visit. Engage closely with the local communities as they will be an invaluable source of information for the Feasibility Study. * Independent Technical Advisor: An independent technical advisor will be used to provide technical advice and to review the Feasibility Study Report.
Features of feasibility study: * Very articulate * High Systematic * Focused * Strategic in nature * Cost effective * Value Adding * Organized * Flexible Objective of feasibility study: * To know the viability of the Project. * To evaluate the profitability of a new business. * To evaluate the benefits to be gained in the expansion of a business. * To evaluate the financial impact for changes in business location. * To evaluate the benefit from new methods of production, technology or machinery. * To evaluate changes in an organization To evaluate benefits from business merger or business acquisition * To know the market trends. * To reduce the cost of project. * To test the profitability of the project. * To identify the likelihood of one or more solutions meeting the stated business requirements. * To find the outcome of the feasibility study is a confirmed solution for implementation. When is Feasibility Study needed? The following are more specific circumstances that may prompt the need for a feasibility study: * Significant capital investment is required Significant City funding or public fund raising is required * Significant commitment or exclusivity of City land or building floor space and time is required. * There is no clear champion * Financial viability is in question (costs compared with anticipated revenues) * Community needs require further analysis and validation * There is potential to reach a large market segment or affect a large number of people * Accessibility to the service is an issue (pricing barriers, physical barriers, discriminative social barriers, proximity, geographic equity, etc. * There is a perception of competition with existing service providers (commercial or community based) and the city’s mandate or role may be questioned * There is no clear indication of the preferred method or source of delivery. * Public safety is concerned * There are significant legislative requirements (health, safety, liability, certification requirements) related to the initiative which concern, impact and relate to the city * There is significant risk inherent in the service initiative (financial, political, public liability, social, etc) * The initiative entails significant operating requirements (ie.
Financial, administrative, staffing, materials and supplies, skill development, customer service, training/development, etc. ) Contents of a Feasibility Study: The following summarizes typical contents of a feasibility study. The level of detail, analysis and involvement may vary depending on the nature and scale of the proposed initiative. 1. Service Concept: * Description * Origin * Conformance with City policies, goals and directions. 2. Community Benefits/ Outcomes Assessment: * Personal Health - physical development, skills development, mental health reduces the risk of heart disease, stroke, combats osteoporosis, etc. Build strong families and healthy communities - ethnic and cultural harmony, community pride and identity, community participation, community heritage. * Ecological Survival - environmental health, protect public open spaces, natural features, ecological functions, wildlife habitat, awareness and respect of environment. * Economic Generator - business development, productive workforce, reduce taxes, tourism. * Human Development - development of children & youth’s full potential, lifelong learning. * Quality of Life - build self-esteem and positive self image, enhance life satisfaction, etc. Reduces self-destructive and anti-social behavior - crime, racism, isolation, alienation, etc. * Reduces health care, social services and police/justice costs - foster care, incarceration costs, etc. 3. Community Needs Assessment and Market Analysis: * Target markets/profiles (geographic/ demographic) * Needs assessment (i. e. product or type of service) * Market supply and competition * Market share goals (production or service volume goals) * Trends analysis- socio-economic, demographic, environmental, recreational, etc. Short term fad or long term need? Market growth potential * Impacts to current markets. 4. Service Concept Development: * Content * Format * Provision Levels * Criteria/Standards (i. e. quality, accessibility, safety, customer service) 5. Resource Requirements: * Capital- land, structure, space, furnishings, fixtures, equipment, computers, technological systems * Facility provision options (rental/lease, renovations, re-using/re-adapting existing facilities, joint venture, new development) * Operating- staff (administrative, instructional, supervisory/management), utilities, materials, supplies, etc. . Service Delivery/ Management Options Review service delivery options in light of the following criteria: * Cost efficiencies * Accessibility * Affordability * Leadership capacity and commitment * Public interest * Liability-regulatory considerations * Service quality and customer responsiveness * Resource/financing capacity * Service integration and continuity * City role, financial impacts, impacts to other programs, services, facilities. 7. Financial Assessment of Preferred Options * Capital expenditure projections Operating cost projections * Capital and operating financing strategies pricing, subsidy, grants, sponsorships, fund raising, etc. 8. Recommendations * Preferred service delivery approach * City role and impacts (i. e. financial, resources) * Implementation strategy Briefing of Feasibility Study Content: A feasibility study will: * Verify community needs for a proposed leisure service * Assess the benefits and overall value of a proposed service to the community * Assess market conditions and trends * Articulate a service concept (i. e.
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Format, content, theme, objectives/outcomes) * Determine required resources (capital and operating) * Determine costs and financing strategies (i. e. Financial analysis) * Review service delivery options and recommend the most effective delivery strategy. * Determine the city’s role and impacts (financial, resources) in the delivery of the service * Produce an implementation strategy for the development and delivery of the new service Feasibility Study Process: The following summarizes a typical feasibility study process for a community leisure service:
Phase 1 Project Development: Identify stakeholders, develop a steering committee, produce a terms of reference, call RFP and retain consultant if necessary, consulting services agreement, refine process timelines and milestones, develop task teams, clarify roles and responsibilities, communications plan, etc. Phase 2 Background Research: Collect data, trends analysis, market analysis, community demographics profile, identify issues and opportunities related to contemplated service. Phase 3 Community Consultation: Community needs assessment through focus groups, forums, surveys.
Phase 4 Service Concept Development: Develop service concept and format, resource requirements, capital requirements, service delivery alternatives, financial strategies, etc. Phase 5 Community Consultation and Market Testing: Obtain input on service concept and format, delivery alternatives, costing and pricing strategies. Focus groups, surveys, forums, etc. Phase 6 Final Recommendations: Develop final recommendations on the service format, preferred delivery approach, City role and involvement and implementation strategy. Types of Feasibility Study:
There are many different types of feasibility studies; here is a list of some of the most common: * Technical Feasibility - does the company have the technological resources to undertake the project? Are the processes and procedures conducive to project success? * Managerial Feasibility- Businesses which are complex requires significant experience on part of top management to run it. Management expertise is not only in technical know-how but also in understanding market dynamics. * Schedule Feasibility - does the company currently have the time esources to undertake the project? Is the project compatible in the available time? * Economic Feasibility - given the financial resources of the company, is the project something that can be completed? The economic feasibility study is more commonly called the cost/benefit analysis. * Cultural Feasibility - what will the impact on both local and general cultures be? What sort of environmental implications does the feasibility study have? * Legal/Ethical Feasibility - what are the legal implications of the project? What sort of ethical considerations are there?
You need to make sure that any project undertaken will meet all legal and ethical requirements before the project is on the table. * Resource Feasibility - do you have enough resources, what resources will be required, what facilities will be required for the project, etc. * Operational Feasibility - this measures how well your company will be able to solve problems and take advantage of opportunities that are presented during the course of the project * Marketing Feasibility - will anyone want the product once its done? What is the target demographic? Should there be a test run?
Is there enough buzz that can be created for the product? * Real Estate Feasibility - what kind of land or property will be required to undertake the project? What is the market like? What are the zoning laws? How will the business impact the area? * Comprehensive Feasibility - this takes a look at the various aspects involved in the project - marketing, real estate, cultural, economic, etc. When undertaking a new business venture, this is the most common type of feasibility study performed. Process to prepare a feasibility study report: Feasibility Study Report 1. Identify Stakeholders
Purpose| To identify who to consult to complete the Feasibility Study Stage. | Timing Note| While you will decide the plan for stakeholder consultation during this step, consultation with the stakeholders will continue throughout the Feasibility Study Stage. | Useful Tools| * Guidelines on Stakeholder Engagement * Guidelines on Feasibility Study * Feasibility Study Report TEMPLATE| Actions Action| Description| 1| Review the project stakeholders to be consulted during the Feasibility Study Stage. | 2| Identify when stakeholders should be consulted in this Stage. 3| Consult with the stakeholders as identified throughout the Feasibility Study Stage. | At the end of this step: The stakeholder consultation conducted in the Feasibility Study Stage is recorded in the Socially Acceptable section of the Feasibility Study Report. | 2. Describe the Site Purpose| To develop a complete description of the eradication site. | Timing Note| You will learn more about the site on each visit so the description of the site can be expanded as and when necessary. | Useful Tools| * Feasibility Study Report TEMPLATE * Feasibility Study Report WORKED EXAMPLE| Actions
Action| Description| 1| Get to know the site. Note: Refer to the notes in The Site section of the Feasibility Study Report TEMPLATE, for the type of information needed. | 2| Record the information in The Site section of the Feasibility Study Report. | At the end of this step: The Site section of the Feasibility Study Report is complete. | 3. Describe the Target Species Purpose| To describe the species to be eradicated and explain why. | Timing Note| You will learn more about the target species and impacts during the site visit – expand this section as you learn more about the target species. Useful Tools| * Feasibility Study Report TEMPLATE * Feasibility Study Report WORKED EXAMPLE| Actions Action| Description| 1| Gather all the information you have on the target species; the impact at the eradication site and the benefits of eradication. | 2| Record the information in The Target Species, Impacts and Benefits of Removal section of the Feasibility Study Report . | At the end of this step: The Target Species, Impacts and Benefits of Removal section of the Feasibility Study Report is complete. | 4. Define the Goal, Objectives and Outcomes
Purpose| To develop a clear understanding of what the eradication project will achieve. | Timing Note| The Goal, Objectives and Outcomes may change as a result of the findings of the Feasibility Study. Review this step as you are writing the Can it be Done? Section and the Conclusion Section. | Useful Tools| * Guidelines for Project Managers * Feasibility Study Report TEMPLATE * Feasibility Study Report WORKED EXAMPLE| Actions Action| Description| 1| Record the goal of the project in the Goal, Objectives and Outcomes section of the Feasibility Study Report. 2| Record the objectives of the project in the Goal, Objectives and Outcomes section of the Feasibility Study Report. | 3| Record the outcomes of the project in the Goal, Objectives and Outcomes section of the Feasibility Study Report. | At the end of this step: The Goal, Objectives and Outcomes section of the Feasibility Study Report is complete. | 5. Start the Can It Be Done? Section Purpose| To identify what further information is required to assess the feasibility of the project. | Timing Note| This section of the Feasibility Study Report is generally completed via known information; desktop research and a site visit (see Step 2. Visit the Site and Update the Can It Be Done? section). | Useful Tools| * Guidelines on the Feasibility Study * Feasibility Study Report TEMPLATE * Feasibility Study Report WORKED EXAMPLE * Guidelines on Choosing the Correct Eradication Technique * Guidelines on Cat Eradication and Monitoring Techniques * Guidelines on Bio-security * Guidelines on Rodent Bait and Baiting * Guidelines on Non-Target Species * Guidelines on Managing Environmental Effects * Guidelines on Stakeholder Engagement * Guidelines on Consents and Permits| Actions
Action| Description| 1| Review each of the seven criteria in the Guidelines on Feasibility Study and the template notes in the Can it Be Done? Section of the Feasibility Study Report. | 2| Complete research using relevant sources of information. | 3| Record the relevant information in the Can it Be Done? Section. | 4| Make a list of what further information is required to complete this section. | At the end of this step: * What you do know about the feasibility of the project is recorded in the Can it be done? Section of the Feasibility Study Report. You have a list of what further information is required to be obtained during the upcoming site visit. | 6. Complete the Site Visit Bio-security Assessment Purpose| To ensure the project team do not transport any invasive species to and from the island during the site visit. | Timing Note| This, and all subsequent trips, to all islands must apply bio-security prevention measures. Your prevention measures may need to be reassessed as you learn more about possible invasive species threats. A comprehensive Bio-security Plan is completed in the Operational Planning Stage. Useful Tools| * Guidelines on Bio-security * Feasibility Study Report TEMPLATE * Feasibility Study Report WORKED EXAMPLE * Bio-security prevention trip checklist TEMPLATE| Actions Action| Description| 1| Identify the invasive species that could be a threat to the island. | 2| Identify the invasive species that are currently on the island. | 3| Record the known threats in the Sustainable section of the Feasibility Study Report. | 4| Plan the prevention measures the project team will apply when visiting the island. | 5| Write a pre-departure checklist to ensure prevention measures are applied.
See the Bio-security Prevention Trip Checklist TEMPLATE for a suggested format. | 6| Record the measures in the Prevention Strategy column of the Invasive Species Table in the Sustainable section of the Feasibility Study Report. | At the end of this step: * The Sustainable section of the Feasibility Study Report contains details of the: * identified invasive species, any other possible threat, and the * bio-security prevention measures to be used by the project team * A project-specific pre-departure checklist based on the Bio-security prevention trip checklist TEMPLATE is complete. 7. Visit the Site and Update the Can It Be Done Section Purpose| To gather the information identified in Step 2. 5 - Start the Can It Be Done? section. | Useful Tools| * Guidelines on Stakeholder Engagement * Guidelines on Feasibility Study * Feasibility Study Report TEMPLATE * Feasibility Study Report WORKED EXAMPLE. * Guidelines for Project Managers. * Guidelines on Choosing the Correct Eradication Technique * Guidelines on Cat Eradication and Monitoring Techniques * Guidelines on Managing Environmental Effects * Guidelines on Consents and Permits| Actions
Action| Description| 1| Review Step 1 Consult Stakeholders to determine how you will consult with relevant stakeholders, e. g. community, landowners, government departments, before and during the site visit. | 2| Review the list of further information required (from Step 2. 5 - Start the Can It Be Done? section) and plan how you will use the site visit to gather the information. | 3| Identify the people who will form the feasibility study team to visit the island. | 4| Organize the site visit. Note: Includes consulting with the stakeholders identified in Action 1 above.
For further information see Guidelines on Feasibility Study. | 5| Visit the site. | 6| Record details of the site visit in the Appendix of the Feasibility Study Report. | 7| Record the information you gather on the seven feasibility criteria, in the Can it Be Done? section of the Feasibility Study Report. | 8| a) Consider each criteria in the Can it Be Done? section and decide whether the project can meet these. b) Record the decision and explanation in each criteria section of the document. | 9| a) For each criteria, identify any issues that will need resolving to make the project a success. ) Record all identified issues in each criteria section of the document. Note: Solutions to issues are not required at this stage; these will be detailed in the Operational Planning stage. | At the end of this step: * The Can it Be Done? section of the Feasibility Study Report is complete and contains: * whether each criteria can be met, and * any issues that need resolving. * The Appendix of the Feasibility Study Report contains a report on each site visit. | 8. Assess the Feasibility of the Project Purpose| To use all the information recorded in the Can It Be Done? ection and decide whether the project is feasible. | Timing Note| As the feasibility of the project is assessed, the Goal, Objectives and Outcomes may need to change. Return to Step 2. 4 and check whether you need to update them as a result of the findings of the Feasibility Study. | Useful Tools| * Guidelines on Feasibility Study * Feasibility Study Report TEMPLATE * Feasibility Study Report WORKED EXAMPLE| Actions Action| Description| 1| Review all the information, decisions and issues in the Can it Be Done? section and decide whether, all things considered, the project is feasible. 2| Record your decision (and the reasons for your decision) in the Conclusion section of the Feasibility Study Report. | At the end of this step: The Conclusion section of the Feasibility Study Report is complete and contains the overall decision and explanation of whether the project is feasible. | 9. Complete the Feasibility Study Report Purpose| To complete the Feasibility Study Report. | Timing Note| Depending on the reviewer’s comments you may need to have the Feasibility Study Report reviewed more than once before it is complete. Useful Tools| * Guidelines on the Feasibility Study * Guidelines for Project Managers * Feasibility Study Report TEMPLATE * Feasibility Study Report WORKED EXAMPLE| Actions Action| Description| 1| Complete the Executive Summary and Introduction of the Feasibility Study Report. | 2| Record all documents used and referred to while preparing the Feasibility Study Report, in the References section. | 3| Record any other useful information in the Appendix of the Feasibility Study Report. | 4| Review all sections of the Feasibility Study Report to ensure it is complete. 5| Have the Feasibility Study Report reviewed by independent technical advisors. For more information, refer to the Guidelines for Project Managers. | 6| Update the Feasibility Study Report to reflect reviewer’s feedback. | At the end of this step: The independently-reviewed Feasibility Study Report is complete. | 10. Inform the Stakeholders Purpose| To communicate the outcome of the Feasibility Study. | Useful Tools| Guidelines on Stakeholder Engagement. | Actions Action| Description| 1| Review the Socially Acceptable section in the Feasibility Study Report to confirm how you plan to communicate with each group of stakeholders. 2| Communicate as planned, providing copies of the Feasibility Study Report (as required). | At the end of this step: Stakeholders have been informed of the outcome of the Feasibility Study Stage. | Importance of feasibility study 1. Launching a New Business Many entrepreneurs look at the launch of a new business as a short-term project that can get them to a sustainable profit level. Business veterans often review two feasibility studies: * To determine the long term viability of the business, and * To understand the resources necessary for a successful launch. 2.
Creating a New Product or Service: Building a routine process for feasibility studies within an organization helps develop a culture of experimentation without putting the entire company at risk. 3. Changing an Existing Internal Process: Many project managers face the challenges of implementing new internal systems, like customer relationship management software or communications tools. Subjecting new ideas to a feasibility study before contracts are signed can keep a company from investing too heavily in systems or processes that will fail to gain traction or meet customer needs. 4.
Deciding on a Partnership or Vendor: Shareholders and employees require assurance that a merger that looks good on paper will actually fly in the real world. Likewise, white papers and glowing customer testimonials from a prospective vendor won’t matter if their product or service doesn’t address critical issues. Feasibility studies become important tools to separate the reality of a deal from the short term gains enjoyed by participants. 5. Understanding Demand: Feasibility studies always analyze whether a real demand exists for a product or a service. This holds true for internal projects as well as for potential consumer offerings. . Assessing Resources: The opportunity to catalog the current resources available for a project and to estimate the need for additional resources. This kind of result gives a project manager the opportunity to reset expectations based on real budgets and headcount. 7. Marketing Feasibility: Even for products and services with measurable demand, companies must examine their ability to spread the word about a new offering. Company leaders can also discover any potential legal roadblocks involving trademarks, patents, or other intellectual property rights. 8.
Marking a Timeline: A feasibility study is the validation of a prospective timeline. A quality feasibility study examines the timetable suggested by project sponsors for potential delays or breakdowns. When project managers use a study as the basis for making timeline decisions, they run the least risk of being overruled by anxious stakeholders. Benefits of Feasibility Study: The benefits of completing a Feasibility Study: * Increases chances of the project being a success: The Feasibility Study will identify the hard parts of the project. It will help identify dependencies in the planning i. e. Trials that need to be done/questions that need to be answered before key decisions on eradication design can be made. * This will allow time for you to address all of the issues before the operation starts. This will reduce project risk and the likelihood of surprises later in the project. * Issues can be planned for and dealt with. * The Feasibility Study Stage tells you what you need to prepare and plan in the Operational Planning Stage so that you can be well prepared. * Informed decision making: * To manage stakeholder expectations about how much the project will cost and how long it will take. Ensures the decision and commitment of time and money to the project is based on accurate information. * To enable adequate resources and timeframes to solve issues * Reduces wasting money: Projects that are too difficult will be stopped early, rather than later when more money has been spent or before expectations are raised too far. Concluding that a project is not feasible is not a bad outcome, as it: * Avoids wasting time and money on a project that would later fail. * Enables you to identify what extra work needs to be undertaken to make it feasible. * Records what you know about the project:
During the Feasibility Study Report you will have gathered significant amounts of valuable information on the project – * The objectives, * The site, * The impacts and * What you plan to do. All this information will be used again in the upcoming Stages. All is not lost if a project is not feasible at this point in time, it may become feasible in the future as new techniques are developed or technology becomes available. The work completed in the Feasibility Study can then be used. * The Feasibility Study Report can be used to support your funding application:
Many funding organizations will fund the Feasibility Study and maybe the Project Design stage separately from the Operational Planning and Implementation Stages. While many funders will require you to complete their own funding application document, your Feasibility Study Report can be used as part of the application. Limitation of feasibility study: * It requires technical knowledge: Feasibility study is a technical paper, not just any person can make it. It requires information and skill that generally not one single individual. * It requires initial expenses: It requires a certain initial amount in its preparation.
The amount spent is necessary in order to ensure that the information found in the feasibility study is reliable and accurate. * It requires time and effort: The information found in a feasibility study, if they are to be accurate and reliable, requires on the part of the proponent time and effort in its acquisition. Bibliography * http://www. brighthubpm. com/project-planning * http://www. pacificinvasivesinitiative. org/rk/project/2_Feasibilty_Study. html * http://womeninbusiness. about. com/od/businessplans/a/feasibilitystud. htm
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