A feasibility study can help to identify if a given project should be undertaken by delineating costs and risks associated with various areas of the project’s development.
Designing a good feasibility study requires that key areas be identified and thoroughly examined:
One of the first things to examine should be the technical limitations of the project and to analyse if the project is technically possible or not. If it is, risks associated with the project technicalities should also be compiled.
After gaining a sense of the technical feasibility of a project, the costs associated with it should be examined. The study should carefully address the question of whether the company has adequate funds to go ahead with the project without affecting other projects and company sectors. Not only should the financial analysis include current budgeting, but it should also consider all possibilities of overruns.
Next, it is important to table the resources available at the company’s disposal and see if they are appropriate and sufficient to sustain the project till completion. 'Resources' is a broad term that encompasses all areas from personnel in charge of the project and its actual work to the supplies required and necessary equipment and all of these areas should be stringently analysed.
After forming an opinion on resource availability, it is then important to look at the time required for the project and if the company is able to undertake it for the duration, mainly looking at the availability of the required project team and their other commitments. This can often be a stumbling block on larger projects where different expertise may be required.
Having gone through the feasibility of the company performing the project, external considerations should be taken into account. Factors to consider include the geographic location of the project and if it is a hindrance. Examining if any legal or political issues may exist is also key.
By systematically going through various aspects of the project a detailed understanding can be established of its feasibility and a conclusion reached on whether it should be developed.
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