Why Write a Feasibility Study?
As you saw in the last chapter, a business case is a document that should answer the question, "Is this project justified and worth doing?"
If the answer is yes, and the business case is approved, the next question is, “Can we do this?” A feasibility study answers this question—so let’s see how to write one.
A feasibility study identifies capabilities for implementing the solutions proposed in a business case. Be sure to mention any inherent risks or threats to the project's success.
In addition, the feasibility study should depict whether the desired outcomes are achievable and if the project should proceed to the next stage.
Begin With a SWOT Analysis Matrix
The SWOT analysis is a tool that helps understand and organize the reasoning behind a feasibility study.
Albert S. Humphrey invented the SWOT analysis in the 1960s. One of the strengths of this four-quadrant diagram is that it is easy to understand (quadrants are strengths, weaknesses, opportunities, and threats).
A SWOT analysis is an ideal addition to a feasibility study as it examines both internal weaknesses and external threats that may jeopardize project success.
In the video at the beginning of the chapter, we used the example of a beverage company launching a new drink brand and building a new website for it. Below is how we could capture strengths, weaknesses, opportunities, and threats in a SWOT analysis.
Launched new beverage brands before; we know the activities to complete and the people to talk to.
We have limited knowledge of the new brand.
Connect the new cocktail possibilities with the food channel partnership.
Our competitor may launch their brand first, meaning we won’t be able to capture the full market share.
Strengths and weaknesses are typically well known by people inside the company, and are referred to as "internal" factors. Conversely, opportunities and threats usually come from the outside (aka “external” factors).
When doing a SWOT analysis, begin with strengths and weaknesses. Some strengths could lead to opportunities, and some weaknesses could lead to threats (although opportunities and threats may be due to other external factors).
Follow the Standardized TELOS Model
Use the TELOS model to follow a more comprehensive and standardized framework for creating a feasibility study.
The TELOS model considers five dimensions of feasibility for writing this document:
Let's examine each of the five areas of feasibility in the TELOS model:
Even if you have a great idea for a highly-profitable product, you have to ask yourself, “Can we build it?”
Imagine that your business case recommended accepting digital currencies like Bitcoin for online product payments. You would have to ask the following questions:
Do we have Bitcoin knowledge in-house?
If we do not have these skills, can we find a software agency for this work?
What is the likely cost of hiring them?
How would we choose the best agency?
Could work begin right away? Or would we have to wait?
Would we have to invest in teaching new skills to current employees to maintain these systems?
There are two main questions to answer in this section:
Can we afford to execute this project?
Will it be profitable?
Use this section to detail financial projections for future revenue streams resulting from the project deliverables. Put simply, how much money do you estimate your product/service will generate?
Investigating legal feasibility means ensuring you are not committing blatant criminal activity while also taking future law changes into account! There are also other aspects do consider— don't forget to check, for instance, if there are conflicts among existing contracts. Also, make sure you do not infringe on any patent or trademark laws.
This section will determine how well the proposed deliverables solve the problems and address the market opportunity defined in the business case.
Organizational feasibility also examines how current employees will be affected if you go ahead with the project.
You would typically ask:
How well does the proposed solution tackle the market opportunity?
Are any new company procedures required?
How are existing departments affected?
Do we have the required skills?
Will training be required?
Are there ongoing costs for maintenance or support?
A project’s success often depends on how quickly a product can be brought to market. A very desirable project may not be pursued if the necessary delivery time is too long. Part of the feasibility study may look at how the project's schedule fits into an available time horizon. However, the project may not be achievable if the scheduling takes up too much of the company's resources or cannot be done within an acceptable time frame.
The feasibility study follows an approved business case (with a suggested solution). Then, if the feasibility study recommends a project proceeds, the decision-makers must approve it.
After that, a project charter is created to detail the project’s objectives and the roles and responsibilities of key project members.
Once your business case is approved, you’ll need to conduct a feasibility study.
A feasibility study is a document that should answer, “Would we be able to do this?”
You can start your feasibility study with a SWOT analysis matrix to understand and organize the reasoning behind this document.
A SWOT analysis matrix helps identify and assess a project’s strengths, weaknesses, opportunities, and threats.
The TELOS model is a framework that explains the five dimensions of feasibility:
Assuming the project is approved and feasible, it’s time to formally authorize it with the project charter. Let’s find out more about it in the next chapter.