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Comprehensive Feasibility Study and Decision Making Guide

Assess the viability of project proposals, evaluate constraints, and select optimal solutions. Explore operational, technical, economic, and schedule considerations before deciding to proceed. Use PIECES framework for analysis.

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Comprehensive Feasibility Study and Decision Making Guide

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  1. why address feasibility? • to answer the questions . . . • can the project be done (can constraints be overcome)? • should the project be done (is it justified)? • have we looked at all the options? which one is best? feasibility study results • “go” or “no go” decision for the project • the best option has been selected • project plan includes tasks addressing feasibility issues • considerations . . . • operational • technical • schedule • economic constraints opportunities risks

  2. inputs to feasibility study • present system, users, policies • mission and long-range plans • basic understanding of the requirements • threats, opportunities, strengths, weaknesses • alternative delivery of final product: • full or partial automation • etc. • alternative project methodologies • build vs buy • spiral VS waterfall VS other • draft project plans for estimating costs • risk analysis • input from: • management • users • IT personnel • etc.

  3. PIECES frameworkto identify the problems and their urgencyby analyzing the current system Performance adequate throughput and response time? Information do end users and management have information that is: timely, pertinent, accurate, well presented? Economy can costs be reduced? can benefits be increased? Control are security and auditability effective? Efficiency are resources (people, time...) efficiently used? Services are current services flexible, reliable, expandable?

  4. operational feasibility • urgency of the problem • internal acceptability of the solution(s) • manpower availability and sophistication • labour objections • management or end-user resistance • organizational conflicts and policies • external acceptability of the solutions(s) • social acceptance • laws and regulations

  5. technical feasibility • is the project within the limits of current technology? • is the necessary technology available? • is the technology mature and easily applied? • are personnel well trained and experienced? • is there good help support? • will the new technology disrupt other systems? schedule feasibility • given schedule constraints, can the project be done on time? • do management and users have the time to participate effectively? • do IT staff have time to learn new technology needed? • are there external time pressures?

  6. economic feasibility Is the project possible within the time & budget constraints? Are the predicted benefits worth the cost? topics: cost analysis benefit analysis payback analysis return on investment

  7. cost analysis one-time costs = system development/purchase and installation ongoing costs = system maintenance labour (internal, contract, consulting . . .) material purchases (hardware, operating systems, developer tools . . .) licenses (applications, developer tools . . .) leases, rentals, contracts (e.g. maintenance) facilities and furnishings disruption of services during the project etc.

  8. benefit analysis • reduce cost by . . . • reducing errors • increasing throughput • etc. • increase revenue by. . . • offering more to customers • expanding operations • etc. benefits may be tangible or intangible

  9. breakeven point gain time payback analysis how long will it take to pay back the project expenses and start reaping the benefits?

  10. return on investment (ROI) if you were to invest $1 today at interest rate i, it would be worth $1 * (1+i)5in 5 years to get $1 in 5 years today you would need to invest $1/(1+i)5 for interest rate 6%, an investment of $100 today will give you $100 * (1 + 0.06)5 = $133.82 in 5 years to get $100 in 5 years at 6% earnings today you would need to invest $100/(1+0.06)5 = $74.73 ... so the present value (PV) of $100 in 5 years is $74.73 why do we care? we need to measure the opportunity of investing money in this project and to compare this project against other projects we might do instead ROI = (Net Present Value) / (PV of all costs) = ((PV of all benefits) - ( PV of all costs)) / (PV of all costs)

  11. return on investment example this example is available as an Excel file

  12. feasibility analysis matrix describe each candidate solution discuss the issues and give a ranking for each feasibility the final ranking is the total of the individual feasibility rankings

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