A feasibility study is an assessment of the practicality of a proposed project or system. A feasibility study aims to objectively and rationally uncover the strengths and weaknesses of an existing business or proposed venture, opportunities and threats present in the natural environment, the resources required to carry through, and ultimately the prospects for success. In its simplest terms, the two criteria to judge feasibility are cost required and value to be attained.
A well-designed feasibility study should provide a historical background of the business or project, a description of the product or service, accounting statements, details of the operations and management, marketing research and policies, financial data, legal requirements and tax obligations. Generally, feasibility studies precede technical development and project implementation. A feasibility study evaluates the project’s potential for success; therefore, perceived objectivity is an important factor in the credibility of the study for potential investors and lending institutions. It must therefore be conducted with an objective, unbiased approach to provide information upon which decisions can be based.
A project feasibility study is a comprehensive report that examines in detail the five frames of analysis of a given project. It also takes into consideration its four Ps, its risks and POVs, and its constraints (calendar, costs, and norms of quality). The goal is to determine whether the project should go ahead, be redesigned, or else abandoned altogether. The five frames of analysis are: The frame of definition; the frame of contextual risks; the frame of potentiality; the parametric frame; the frame of dominant and contingency strategies.
The four Ps are traditionally defined as Plan, Processes, People, and Power. The risks are considered to be external to the project (e.g., weather conditions) and are divided in eight categories: (Plan) financial and organizational (e.g., government structure for a private project); (Processes) environmental and technological; (People) marketing and sociocultural; and (Power) legal and political. POVs are Points of Vulnerability: they differ from risks in the sense that they are internal to the project and can be controlled or else eliminated.
The constraints are the standard constraints of calendar, costs and norms of quality that can each be objectively determined and measured along the entire project lifecycle. Depending on projects, portions of the study may suffice to produce a feasibility study; smaller projects, for example, may not require an exhaustive environmental assessment.