Why is the feasibility study carried out? The technology company is one of the most prosperous companies in the world in the world, and it is always famous for business, and the feasibility study of a project is an inherent element in all of them and it does not matter if it is a software initiative, an educational project, or a construction project. The feasibility of the project is more important than planning and in order to be able to complete it, a full investigation is necessary, which leads to knowing whether the project will actually deliver the expected benefits from it as it is not a simple bureaucratic formality, but a necessary tool for strategic decision-making so we will talk in This article is about why a feasibility study is being carried out
Why is the feasibility study being carried out?
To conduct a feasibility study for a project, it is necessary to gather sufficient information to:
Define limitations, limitations, and assumptions.
Analyzing the current state of the organization’s work.
Determine the requirements that make up the project.
Evaluating different alternatives.
Reach an agreement on a course of action.
The structure of the project feasibility study
For a project’s feasibility study to be effective, it must contain, at least, the following six parts:
1. Scope of the project:
Help define boundaries and avoid deviations that are far from expected results.
It indicates the purpose and is used to define a company problem that needs to be solved or a business opportunity that you want to take advantage of.
The scope of application should be defined in a clear, concise, and accurate manner, to avoid confusing project participants.
It should inform about the structure and parts of the company, including the designation of project participants, identifying the promoter and the areas of end-users affected by it.
2. Situation analysis:
It works to identify the strengths and weaknesses of the current approach.
It helps to better understand the system and understand the mechanisms for developing each product.
Facilitates introducing changes in areas where it is required.
It allows defining guidelines that can be applied to future projects, assuming significant savings in time and money. It should be used as a road map and not as a call to action, so its conclusions should be framed in the planning and not considered priorities to be resolved immediately.
3. Define requirements:
This stage depends on the subject of interest of the project and is fed by the joint participation of the project members at different levels.
4. Determine the approach:
It represents the recommended solution or optimum course of action that will end up meeting the needs.
It is necessary to evaluate different solution alternatives for each problem.
Consider the suitability of using existing structures and alternatives.
Priorities are set on the basis of pragmatism and viability.
5. Project feasibility assessment:
It examines the profitability of the chosen approach.
Start with an analysis of the total estimated cost of the project.
The cost of other alternatives is also calculated, apart from the recommended solution, in order to provide an economic comparison.
It must be completed with a project program indicating the project path and the start and end dates of activities as a whole.
It ends with calculating the total cost, which is an essential aspect of being able to determine the feasibility of the project.
To this calculation, we must add a summary of costs and valuation based on cost-benefit analysis and investment profitability.
6. Review the feasibility study of the project:
All the elements mentioned above are assembled in a feasibility study that must be subject to a formal review in which all involved parties participate.
This test has two purposes:
Justify the rigor and rigor of the feasibility study.
Decide on projects, approve or reject them, request reconsideration, or any of their aspects.
It must be remembered that the feasibility study of a project is more of a way of thinking than a bureaucratic process.
To increase its usability it is important that it has enough detail to allow the continuation of the next successive stage in the project
This facilitates the application of comparative analysis in preparing the final project audit that assesses what is delivered, compared to what has been delivered.
Proposed in the feasibility study.
Reasons for conducting a feasibility study of the project
In addition to the common-sense approach that a feasibility study for a project contributes to its planning, there are many other reasons that encourage companies to commit to developing it.
Carrying out a study of this type is a good business practice and its application can be seen in all successful businesses.
Organizations with lower levels of project failure share the time and resources to thoroughly screen all issues and assess their likelihood of success before starting the next project.
In addition to reducing risks, a feasibility study helps them:
Focus on the project itself and get a more complete perspective on the different alternatives.
Discover new job alternatives or ways to improve results.
Identify opportunities for innovation through the research process.
Expose the signs that warn that it is better not to continue and the reasons justifying this caution.
Increased likelihood of success when the various factors that may, from the outset, influence a project and harm its outcome are explored.
Obtaining good information to implement a decision-making process based on objective and reliable data.
Access to complete documentation, as a result of a comprehensive search conducted by the company in various fields.
Ensure financing of credit institutions and other monetary sources.
It also helps attract capital investment, which is one of the most praised benefits of a project.